E-cigarettes have experienced explosive growth in recent years and are no longer unfamiliar to many, but their history may not be fully understood. If you're interested in understanding the history of e-cigarettes, this article will suffice.

As a popular new tobacco product, the e-cigarette industry continues to grow and innovate, driven by demand from overseas consumer markets. For those who have come to understand the e-cigarette industry from a different perspective and wish to gain a deeper understanding, this article will provide a historical overview of its development and hopefully offer insights into its future.

I. Before 2003: Early Concepts of E-Cigarettes

In 1927, American Joseph Robinson patented the first electric vaporizer, claiming it could be used to atomize medications, allowing people to more easily inhale the vapor without the risk of burns. However, Robinson never brought his patent to market.

Although Robinson's electric vaporizer wasn't designed to atomize tobacco, it may have provided inspiration for Herbert Gilbert's later design of smokeless cigarettes. In 1963, American worker Herbert A. Gilbert applied for a patent for an electronic smoking device. His smokeless cigarette design claimed to "replace paper and burning tobacco with heated, humidified, and flavored air."

Unfortunately, this invention was too advanced. Although companies were willing to invest in it, the market demand was lacking at the time, and it ultimately failed to achieve commercialization.

2. 2003-2009: The First Commercialized E-Cigarette

It wasn't until 2001 that Chinese pharmacist Hon Lik invented the first nicotine-based e-cigarette product, which used ultrasonic technology to atomize a solution containing propylene glycol, nicotine, and other ingredients.

In 2003, Hon Lik applied for and received a patent for "A Non-Combustible Electronic Atomizing Cigarette." He subsequently founded a company to commercialize it under the brand name "Ruyan." Hon Lik is widely regarded as the inventor of the e-cigarette.

In December 2006, Jinlong Group acquired the e-cigarette business from one of its shareholders, Han Li. In November 2007, Jinlong Group announced a name change to Ruyan Group, with its market capitalization reaching nearly HK$120 billion. In 2008, Ruyan's sales reached 1 billion RMB, with global sales exceeding 300,000 cigarettes.

But Ruyan's success was short-lived. Starting in 2008, Ruyan faced public pressure in China due to publicity issues, and its overseas development suffered setbacks. Just one year later, in 2009, Ruyan suffered a full-year loss of 444 million RMB.

In 2013, after four consecutive years of losses, Imperial Tobacco acquired Ruyan for US$75 million, including its e-cigarette patents. Han Li also served as a research and development consultant for Fontem Ventures, an e-cigarette company under Imperial Tobacco.

III. 2003-2018: The Rapid Expansion of the E-cigarette Industry

As the saying goes, when a whale falls, all things come to life. While Ruyan Technology's e-cigarettes were short-lived, the e-cigarettes it commercialized have spawned a remarkably resilient industry.

1. The Explosion of the Overseas E-cigarette Consumer Market

In 2005, Ruyan Technology began exporting its e-cigarette products overseas; in 2006, e-cigarettes began to be sold and used in Europe; and in 2007, after becoming popular in the European market, they quickly entered the US market.

In September 2008, the WHO announced that it no longer considered e-cigarettes an effective smoking cessation aid. US e-cigarette regulations subsequently tightened. In March 2009, the FDA regulated e-cigarettes as medical devices, prohibiting their import. This hindered the industry's development and slowed market growth.

In April 2009, Smoking Everywhere filed a lawsuit in federal court, arguing that e-cigarettes were tobacco and therefore lacked FDA jurisdiction. At the end of 2010, a federal district court and the Washington Court of Appeals ruled against the FDA, declaring it could only regulate e-cigarettes as tobacco products. The following year, the FDA announced it would regulate e-cigarettes under the Food, Drug, and Cosmetic Act.

After the FDA lost the case in 2010, the US e-cigarette market was opened up. Shenzhen, leveraging its advantages in the electronics and foreign trade industry chains, quickly saw the emergence of a number of e-cigarette contract manufacturers, which took on a large number of orders from overseas, particularly from the US. As a result, an e-cigarette industry cluster gradually formed in the Songgang and Shajing areas of Bao'an District, Shenzhen.

Many established e-cigarette companies were established between 2009 and 2013, including McWel, First-Purpose, Aolineng, Yijiate, Green Yunda, Xinyikang, Kanger, Zhuoeryue, Kimree, Klaipeng, Wulun Technology, and Jieshibo.

By 2014, China had over 2,000 e-cigarette factories, producing 90% of the world's e-cigarettes, a level that has remained stable since then. Roughly half of the products are sold to the US, and one-third to Europe.

American e-cigarette company Juul Labs plans to allocate $2 billion in special dividends to all 1,500 employees as year-end bonuses, averaging $1.3 million per employee.

Juul first appeared on the US market in 2015, but by 2016, its sales had soared 700%. By September 2018, Juul had captured 72% of the US e-cigarette market, with sales reaching $2 billion that year.

At the time, Juul's valuation was $38 billion, surpassing SpaceX. At the end of 2018, US tobacco giant Altria acquired a 35% stake in JUUL for $12.8 billion. Having secured the capital, Juul generously offered employees a wave of benefits, leading to the million-dollar year-end bonus.

Unlike the European and American markets, e-cigarettes have been largely absent from the Chinese market since 2008, following Ruyan's decline. By 2018, many people considered e-cigarettes to be imported goods.

IV. 2019 to Present: The Beginning and Strengthening of the Regulatory Era

The rapid growth of e-cigarettes has attracted the attention of relevant organizations in various countries and regions around the world, sparking considerable controversy. The most significant controversy is the product's allure to youth. A prime example is JUUL, which has been embroiled in a public outcry over its youth appeal and has seen its valuation plummet.

Based on youth protection, countries around the world have implemented e-cigarette regulations.

Regulatory Policies in Major Consumer Markets

In August 2016, the US FDA enacted the Tobacco Products Control Act, which came into effect on August 8, 2016. This act requires new tobacco products to pass PMTA before they can be legally marketed and strengthens regulations to prevent youth e-cigarette use. Tightened regulations in February 2020 significantly increased compliance costs for the industry.

In the EU, e-cigarettes are regulated and managed as recreational consumer products. Starting in 2016, e-cigarettes and related products will be subject to Article 20 of the TPD.

V. Conclusion

In conclusion, for e-cigarettes, the era of strict regulation does not mean the end of the industry; rather, it marks the beginning of a longer-term future, and the market continues to grow.

Unlike the previous period of ruthless expansion, the e-cigarette industry in this era of strict regulation requires greater technological innovation to develop products that meet regulatory policies and market demands. Again, for the e-cigarette industry, change is the only constant, presenting challenges but also opportunities.