SHANGHAI: China's electronic cigarette industry has laid off around 50,000 people since October, roughly 10 per cent of its workforce, trade association estimates showed, asAo Weinuo, secretary of the Electronic Cigarette Industry Committee, late on Thursday said media scrutiny of vaping in the United States, the largest e-cigarette market, has also caused demand to wane just as China banned online e-cigarette sales.
One Shenzhen worker told Reuters that employer Teslacigs suspended hiring just as it moved into a facility intended for double its 400-strong headcount. Another person at a factory of 300 workers said orders have fallen 30 per cent 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.
Smaller brands with less investor backing have fewer options. One manager at a brand that launched this year said sales dropped 60 per cent after online sales were banned in November. "We invested a lot of capital into online sales as the core of our launch strategy," said the manager, who declined to be identified due to the sensitivity of the matter."The new rules immediately messed up our path."