The Current Situation of Disposable Vape Manufacturing Industry

The Shenzhen disposable vape factories are currently facing dual pressures of declining exports and internal adjustments

1. In the past, dozens of flights loaded with disposable vapes flew to Los Angeles every week, but now the routes are deserted, and even the airport ground can feel the chill.
You should know that Bao’an District monopolizes the global vape supply chain with a production capacity ratio of “70% in China and 95% in Shenzhen”. In 2022, the added value of its vape industry will account for 5.1% of the region’s GDP, with the goal of impacting the trillion dollar cluster by 2025.
2. In 2024, the total export value of vapes in China was 10.96 billion US dollars, of which mostly are disposable vapes. For 3.7 billion went to the United States, accounting for over one-third. The latest tariff rate in the United States has soared to 150% (in addition to the original rate), directly cutting off the lifeline of cash flow.

3. According to reports, the order volume of eight factories of accessory supplier He Chun has been halved, and “customers cannot ship, so we have to stop production”. Top contract manufacturing companies such as Simor are facing billions of orders evaporating due to the nearly 40% share of their US business.
4. Some small and medium-sized enterprises survive by “dismantling parts for export” and “grey customs tax avoidance”, but the cost of compliant enterprises has skyrocketed, and the industry is accelerating polarization.
5. In 2025, there will be a significant decline in the export of vapes. Its upstream and downstream industry chain involves companies providing various raw materials and logistics services. May lead to some factories facing the risk of bankruptcy after the New Year. ‌
6. At the same time, the domestic vape market continues to shrink under strict regulation, for example, the domestic sales amount will significantly decrease to about 4.2 billion yuan in 2023, and the industry reshuffle will accelerate. ‌

7. From a long-term trend perspective, the Chinese vape industry is undergoing structural changes. In terms of exports, the export value in 2023 is 79.2 billion yuan. Although it has declined from the peak in 2021, China still accounts for more than 75% of the global trade volume, mainly exporting to mature markets such as Europe and America. ‌
8. However, the growth rate in the European and American markets has slowed down and regulations have become stricter (such as the EU restricting nicotine content and the US requiring PM2.5 filtration certification), while emerging markets (such as Southeast Asia and Africa) have higher growth rates but increasingly fierce competition. ‌
9. The current situation of domestic factories is significantly affected by policies. Since the implementation of the Mandatory National Standard for Electronic Cigarettes in 2022, flavored disposable vapes such as fruit flavored ones have been banned from sale, and non national standard products still have a trend of spreading. However, the increase in compliance costs has led to the clearance of small and medium-sized manufacturers. ‌

10. Top companies such as Relx and Smoore International maintain their competitiveness through technological upgrades (such as ceramic atomization cores and low-temperature heating technology) and global layouts (such as building factories overseas and acquiring local brands), while second tier companies focus on breaking through in segmented fields. ‌
11. Overall, the concentration of the industry has increased, and compliance and technological innovation have become the key to survival. Factories need to address policy differentiation, health controversies, and environmental requirements, such as reducing carbon emissions through ESG practices to comply with EU recycling standards. ‌
12. In the future, companies with advantages in harm reduction technology and global compliance capabilities are more likely to dominate the market, while small and medium-sized factories may shift to specific niche markets or face elimination.