The US e-cigarette market is undergoing a deep reshuffle caused by FDA regulation. In 2025, the FDA will further strengthen its supervision of new tobacco products (NGPs), requiring all e-cigarette products exported to the United States to pass PMTA (Tobacco Product Market Access Application) approval, focusing on cracking down on illegal flavored disposable e-cigarettes. Regulators identify high-risk brands through the National Youth Tobacco Survey (NYTS) data and require companies to provide scientific evidence in PMTA applications to prove that the products will not induce youth use. This policy has led to accelerated market integration: only a few compliant products that have passed PMTA (such as menthol-flavored e-cigarettes) have obtained legal sales qualifications, while a large number of unapproved products have been forced to withdraw from the market.
At the same time, the US Customs and Enforcement Department seized millions of dollars worth of illegal e-cigarette products, highlighting the continued rise in compliance thresholds. Against this background, China’s e-cigarette supply chain faces challenges such as falling export prices and shrinking profit margins. The average export price to the United States in the first half of 2023 fell by more than 27% year-on-year, and market competition has further intensified.
As the global e-cigarette manufacturing center, China’s supply chain has exposed three major shortcomings under the pressure of FDA supervision: Insufficient compliance capabilities: Most small and medium-sized enterprises lack the scientific research and data support capabilities required for PMTA applications, and it is difficult to cope with the FDA’s strict review of dimensions such as appeal to teenagers and long-term health effects. Localization layout lags behind: The US market requires localized production and supply chain response, but some Chinese manufacturers still rely on centralized production models and face tariff, logistics and policy fluctuations. Lack of brand premium: Low-price competition has caused Chinese e-cigarette products to fall into the “OEM trap”, and most of the profits are seized by overseas distributors, lacking the market voice of independent brands.
In order to cope with regulatory challenges, China’s supply chain needs to shift from “passive OEM” to “active co-construction”, and build a multi-dimensional breakthrough strategy with VEEHOO (Global Compliance Collaborative Network) as a paradigm:
Joint scientific research: Cooperate with FDA certification agencies (such as CSUR) to introduce behavioral science analysis to optimize PMTA applications and focus on design solutions that reduce the tendency of adolescent use. Supply chain compliance empowerment: Through professional service providers such as Huahan Logistics, we can open up the “compliance channel” to ensure that the entire process from production to customs clearance complies with FDA standards and avoid the risk of illegal products.
Transnational production network: Learn from the McWel model and set up production bases in the United States, Southeast Asia and other places to disperse policy risks and get close to the terminal market. Regional co-construction ecology: Form a “R&D-production-sales” alliance with local channel dealers and brands. For example, RELX International occupies 40% of the market share in Southeast Asia through localized operations.
Differentiated product strategy: Develop innovative products that meet FDA compliance requirements (such as low nicotine atomization technology) and break through the regulatory bottleneck of flavor restrictions. Clustered overseas expansion: Promote supply chain companies to build brands with overseas channel dealers, such as ELF BAR to achieve brand premium through a global distribution network.
Although short-term pain is inevitable, FDA supervision will force the industry to develop with high quality. By 2030, the size of the new tobacco market in the United States is expected to exceed US$28.8 billion, and compliant and technological products will become mainstream. China’s supply chain needs to use VEEHOO as a hub to accelerate the integration of global resources:
Invest in compliance infrastructure: Establish a PMTA special fund to support small and medium-sized enterprises to complete certification;
Build a data platform: Use consumer behavior data to optimize product design and improve market response speed; Strengthen ESG governance: Shape the image of a sustainable supply chain through environmentally friendly materials and social responsibility projects, and win the trust of international regulators.
FDA regulation reshapes not only the market structure, but also the competitive logic of the global e-cigarette industry. Only by surviving in compliance, taking root in localization, and breaking through branding can the Chinese supply chain seize the high ground of the value chain in the “post-regulatory era”. The collaborative innovation network represented by the VEEHOO model may become the key engine for breaking through.
Tags: Youth tobacco survey, flavored e-cigarettes, PMTA’s compliant e-cigarettes, veehoo vape
