Chinese e-cig maker launches product in PH amid bid to raise taxes

A Chinese e-cigarette maker launched one of its brands in the Philippines on Friday, Sept. 20, hoping to draw in at least 1.5 million users in five years.

This came as the Duterte administration moved to further tax e-cigarettes alongside other so-called “sin products” in its second tax reform package.

RELXTech, a Chinese firm, aimed to convince smokers to shift to the safer alternative. The company claimed to be the top e-cigarette maker in Asia.

Amid company plans to build a factory outside China, the Philippines is being mentioned as a site.

Di Yang, RELX director for Southeast Asia, told reporters on the sideline of the launch that the Beijing-based company wants to eventually attract 10 to 20 percent of the 15 million tobacco users in the Philippines.

This is under the assumption that the number of tobacco users remains at 15 million in the next few years.

The company has so far enjoyed enormous success since being founded in January last year. In just less than two years, Yang said the company, which has presence in over 50 countries, already has 8 million users worldwide.

It also partnered with a business process outsourcing company in the Philippines, which will provide customer support for its English-speaking market. The BPO firm was not named.

But in the Philippoines, RELX had already partnered with retailers Lighters Galore and Fuma, which have a combined 100 outlets. It is also negotiating to sell its products in 7-Eleven stores and Family Mart which could increase its outlets to more than 2,000.

RLEX’s standard e-cigarette sells for P1,599 in the Philippines. More variants are waiting for market response.

The Chinese brand is entering the Philippine market at a time when the government is poised to regulate the e-cigarette industry, from slapping taxes to banning different flavors.

RELXTech will still have to figure out how to grow its sales, with the scheduled implementation next month of a Department of Health Administrative Order that will, among other provisions, impose a “comprehensive ban on any form of advertising” of tobacco products.

“An advertising ban restricts our capability to communicate to adult smokers about our product. If we can’t communicate what the product is like, and what is the benefit of switching to an e-cigarette, then the sales would be different,” said Yang.

On top of wanting to have diverse flavors for e-cigarettes, Yang said he believed regulations on e-cigarettes should be laxer than those for traditional cigarettes “because it doesn’t generate second hand smoke.”

But other than dealing with government regulations, the company would also have to deal with how the public sees e-cigarette smoking.

So far, the conversation over the health claims of e-cigarettes is divided.

Companies like RELXTech claim e-cigarettes are safer but institutions, like the World Health Organization, said there was no study to back it up.

E-cigs also have the potential of turning on new smokers, instead of reducing their numbers.

The company, however, said it has ways to prevent non smokers from getting turned on to their products, like cutting ties with outlets that sell to minors or non smokers. It was not clear, though, how the company would enforce it.

The company also planned to tap technology to limit its market to only adult smokers, like age-verifying vendo machines which it had already co-developed in China.

But Yang said he believed e-cigs from the company wold be “intelligent enough” to identify whether a user is adult or not, saying technology to do that is in the works./TSB