The Trend of Low-Priced Electronic Cigarettes: Is It Good or Bad?

In recent years, electronic cigarettes have become increasingly popular in the domestic market, attracting many traditional cigarette consumers to shift their attention and try out e-cigarettes. Currently, the e-cigarette products available on the market mainly consist of disposable devices and pod system devices. The prices of pod system devices used to range from 99 yuan to 299 yuan in the past two years, while disposable devices are relatively cheaper, priced between 29 yuan and 49 yuan. However, starting from 2020, due to changes in the market environment, many e-cigarette brands began introducing ultra-low-priced pod system products. Among them, the YOOZ Mini, a pod system device with a price of 9.9 yuan, launched by YOOZ in April, garnered the most attention.

So, is the trend of low-priced electronic cigarettes good or bad? Can the low-price strategy for e-cigarettes be successful? Overall, proponents of the "vapor trend" are not supporters of the "low-priced e-cigarette strategy" and do not believe that the shift towards lower prices is beneficial for companies or the industry as a whole.

Firstly, there is a simple yet direct rule in marketing: "Higher price at launch, initially difficult but easier later; lower price at launch, initially easier but more difficult later." The best example of this rule currently is Xiaomi smartphones, a brand that entered the market at low prices, subsequently lowering the overall industry prices. In recent years, Xiaomi has been attempting to challenge the high-end market, but the results have not been entirely satisfactory. The reason is simple: when consumers focus on your brand primarily because of its price, they are price-sensitive consumers. Their strong association with your brand lies in the price, and if other brands offer greater price advantages, they are easily swayed away, resulting in low brand loyalty. In such a scenario, if you want to accumulate a stable and valuable consumer base, you will be stuck in the low-price segment, which is detrimental to the brand's long-term development. The same principle applies to the e-cigarette industry. If you can introduce a 9.9 yuan device to attract users, other brands can offer even lower-priced or even free pod system products. In such competition, the so-called low price becomes meaningless.

Secondly, the current so-called low price in the e-cigarette industry only refers to the low price of the device itself, while the prices of the pods have not substantially decreased. In terms of long-term usage costs, the actual cost for users has not been significantly reduced. Although the pricing of pod system products in previous years may have been in the hundreds of yuan, when combined with specific marketing activities, the discounted prices were equivalent to the device being given away for free. In other words, the current so-called low prices are simply another marketing tactic following the discounted bundle offers from before and have not truly impacted the industry.

Thirdly, under the influence of the low-price strategy, the design of the device is inevitably driven into a realm of low design costs, low R&D costs, and low material costs. This will undoubtedly affect the user experience of the device and ultimately the overall experience of using e-cigarettes. When using traditional cigarettes, if you run out of a lighter, you can use matches or borrow fire from others to light your cigarette, which does not hinder your usage needs. However, with e-cigarettes, the device and the pod are a matched pair, and you practically cannot use a specific pod without the corresponding device. The device is an indispensable component in the entire process of using e-cigarettes, and a poor user experience in this aspect will ultimately affect the overall brand perception.

Therefore, the low-price device strategy can be successful as a marketing campaign, but when it comes to the level of corporate strategy, there are many other factors that need to be considered. From the intense competition in 2019 to the industry's downturn in 2020, the e-cigarette industry has undergone significant changes within a year. In such a context, it is commendable that various companies are attempting different marketing approaches. However, whether the "low-price trend" of e-cigarettes can ultimately be embraced by the market can only be judged by time.