China Bans Online Sales of E-Cigarettes

(Bloomberg) -- China has banned online sales of e-cigarettes in the latest blow for the nascent vaping industry, which has come under intensifying scrutiny around the globe.

All websites and apps selling e-cigarettes should be shut down and all online marketing campaigns halted, according to a statement by the State Tobacco Monopoly Administration and State Administration for Market Regulation on Friday. The measures are aimed at protecting adolescents from vaping, it said.

The directive also ordered online shopping platforms to remove e-cigarette products from their sites. China’s e-cigarette market size rose from $451 million in 2016 to $718 million in 2018, according to estimates from L.E.K. Consulting, as lack of specific regulations on e-cigarettes allowed for their proliferation.

China’s ban is the latest restriction on an industry whose fortunes have soured rapidly in the past few months as a mysterious lung disease linked to vaping has hurt 1,888 people and killed 37. Once seen as providing a useful tool to help smokers quit cigarettes, e-cigarettes are now banned by 27 countries including Australia and Brazil, while Juul Labs Inc., the largest U.S. e-cigarette company, has been probed for marketing to teenagers.

Products from Juul Labs were pulled off Chinese e-commerce sites Tmall and JD.com in September without an explanation, days after debuting in the world’s largest tobacco market prompting speculation that official action may be on the way.

RELX Technology, a Beijing-based start-up which claims to have 60% e-cigarette market share in China, said in a statement that it “resolutely supports the ban” on online sales and doesn’t serve minors. It will terminate all sales and ads online, the company said.

Global Curbs

U.S. President Donald Trump has vowed to “do something very, very strong” about vaping, which has come under criticism for widespread use among teenagers, most of whom had not smoked before. India banned sale and production of all e-cigarettes in September.

The global curbs on vaping and e-cigarettes also means rising risks for cigarette companies getting into the electronic nicotine-delivery business -- including most notably a nearly $13 billion investment in Juul by Altria Group Inc. The Marlboro maker reported a $4.5 billion charge related to its investment in Juul this week as the vaping market faces a reckoning.

Despite increasing global curbs on vaping, some nations view e-cigarettes as viable alternatives to smoking, a leading cause of preventable death. Some public health officials also caution that the vaping health scare could benefit cigarette sales.

Michael R. Bloomberg, the founder and majority owner of Bloomberg News parent Bloomberg LP, has campaigned and given money in support of a ban on flavored e-cigarettes and tobacco.

--With assistance from Dong Lyu.

To contact the reporters on this story: Rachel Chang in Shanghai at wchang98@bloomberg.net;Lisa Du in Tokyo at ldu31@bloomberg.net

To contact the editors responsible for this story: Emma O'Brien at eobrien6@bloomberg.net, Bhuma Shrivastava, Thomas Mulier

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