China's e-cigarette industry cuts 10% of staff, slows production as regulation tightens

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Factories in Shenzhen, where approximately 90% of the world's e-cigarettes are made, have slowed production and cut staff.

SHANGHAI - China's e-cigarette industry has laid off around 50,000 people since October, roughly 10% of its workforce, trade association estimates showed, as tightened regulation in the United States and China smother the once-booming sector.

Factories in the southern Chinese city of Shenzhen, where approximately 90% of the world's e-cigarettes are made by a 500,000-strong workforce, have consequently slowed production and cut staff. Association Chair Ou Junbiao, founder of e-cigarette maker Sigilei, earlier this month told media outlet China Venture that his company has cut headcount by about half from around 1,000.

Another person at a factory of 300 workers said orders have fallen 30% since their peak, and that management will consider layoffs if the regulatory environment does not improve next year.Leo Chan, an investor at venture capital firm Autobot who researches China's e-cigarette industry, said some makers tried to shift excess inventory by opening offline stores, but the increased competition angered original offline franchise partners.

 

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