New and innovative tobacco products are rapidly emerging. They have three main features including no burning process, with low or even no tar, yet provide nicotine. They appeared in the market and are growing in popularity due to its feature of reducing the risk of getting tobacco related diseases compared to traditional tobacco products. Among these RRP (Reduced-Risk Products) , the two mainstream products are e-vapor products and heated tobacco products which are experiencing the fastest development.
China is the world's largest e-cigarette manufacturing base. Shenzhen alone accounts for around 90% of the world's e-cigarette production capacity. However, China is not a main country for e-cigarette consumption. Domestic manufacturers produce e-cigarettes by OEM / ODM and sell most of their products to other countries, of which the United States is the largest export market.
In the context of rapid growth of new tobacco products globally, China's new tobacco products are also booming. Up till now, electronic cigarettes that vaporize e-liquid in the cartridge still account for the main part of China's market of new tobacco products. Heat-not-burn tobacco products are still banned in China. The market is not yet open, meaning exports only. According to statistics, the market size of China's e-cigarettes in 2018 reached 5,152 billion CNY, representing a year-on-year increase of 28.5%.
Since 2017, China Tobacco and Chinese e-cigarette companies have set foot in the industry of new tobacco products, and applied for a number of technology patents.
In the field of heat-not-burn e-cigarettes, the China Tobacco companies have made technological innovations and introduced various heating methods such as chemical heating, infrared heating, or other heating methods to bypass IQOS’s heating method (heating blade), in order to reduce the possibility of intellectual property disputes with IQOS.
In the field of e-vapor products, various e-cig companies cooperated with China Tobacco to improve the performance of e-cigarette devices and the purity and taste of e-liquid, as well as to establish their own brands.
On April 30, 2019, the FDA cleared Philip Morris International to sell its heated tobacco product iQOS in the United States. PMI is now authorized to sell the iQOS device, Marlboro Heatsticks, Marlboro Smooth Menthol Heatsticks and Marlboro Fresh Menthol Heatsticks. The tobacco giant, Virginia-based Altria will sell the products in the U.S. The FDA release of IQOS into the US market is expected to positively influence the research and development of heated tobacco products in China, as well as to stimulate its making of related policies and regulations.