👆 Most Of The World's Cigarettes Are Sold In Asia|The Next Battleground For Vaping

- [Hannah] The e-cigarette
industry is becoming
a tricky puzzle to solve.
American regulators are
threatening to crack down
as teenage vaping is on the rise.
- We want to get to the bottom
of a very unusual situation.
- [Hannah] The Trump
administration is considering
a ban on fruity flavors
popular with younger people
and Congress approved
raising the minimum age
to purchase tobacco products
including e-cigarettes
from 18 to 21.
All these factors have now made the U.S.
a lot more complicated market
for e-cigarette companies
like Juul Labs to figure out.
And this crackdown is starting
to have a ripple effect
around the world.
While companies scramble to
adjust to possible tighter
regulations in the U.S.,
they're also facing backlash
from what could be their
next biggest market.
- Asia Pacific is the
biggest smoking region
in the world by far and
therefore has the biggest
potential in terms of
consumer base for American
and international e-cigarette companies.
- [Hannah] Juul's regional
head of sales said the company
viewed Asia has a high priority region.
It's home to more than half
the world's cigarette sales.
But Asia itself is already
complicated because
of different regulatory
regimes, smoking cultures
and socioeconomic levels.
- The already complex puzzle
is becoming even more challenging.
So what exactly are vaping
companies up against?
Vaping is a nascent industry in India
and offers companies a huge opportunity.
The country comes in
second with the most number
of tobacco users in the world
But vaping related deaths
in the U.S. has spooked
Indian regulators.
The deaths appear to be
linked to vaping products
containing THC, the psychoactive
compound in marijuana
rather than traditional
nicotine e-cigarettes.
- The Health Ministry
explicitly referenced
what was happening in the
U.S. in terms of vaping
and vaping deaths and
youth access and so on
as a reason for implementing
this prohibition.
- [Hannah] In September
the Indian government
announced an executive
order banning the sale
and production of nicotine e-cigarettes.
If caught, you could end up in
prison for up to three years.
Experts say India is just
one of many countries
that are starting to point
to growing health concerns
in the U.S. over vaping.
For instance
Rodrigo Duterte, the Philippine president,
who was once a heavy smoker
himself, ordered a sweeping
ban on public vaping.
- I am now ordering the
law enforcement agencies
to arrest anybody found vaping.
- Some countries like
South Korea are more open
to the vaping industry.
It's mostly driven by younger consumers
who are willing to embrace
things that are cutting edge
and techy.
- The younger adult consumers are looking
for more sophisticated, more
advanced, more technologically
interesting ways of consuming nicotine
in the same ways they're
looking for those things
in other aspects of their lives as well.
- But even here there are challenges.
There are two types of high
tech cigarette alternatives,
devices that heat
tobacco and e-cigarettes,
which vaporize nicotine liquid.
But they're regulated differently.
South Korea and Japan are
the world's two top markets
for heated tobacco markets.
In both countries Iqos,
from the tobacco giant, Phillip Morris,
is sold in convenience
stores, supermarkets
and even airports.
But it's a whole different
story for nicotine liquid
that's used in products like Juul.
In Japan nicotine liquid is
considered a medical product
so it's highly regulated.
This has basically cordoned
off Juul from entering
the country.
South Korea has also
advised people to stop using
liquid e-cigarettes and is
looking into investigating
whether to ban sales.
Some countries are
impervious to the crackdown.
Because entering China is going up against
the country's state-owned
company China tobacco.
- Tobacco is economically
very important to China
almost to the point of being
a strategic, a national
strategic asset.
- The domestic industry
generates substantial revenue
for local governments and
ensures tens of millions
of jobs and tobacco farmlands.
International companies
have been trying for years
to sell traditional cigarettes in China
but have had a hard time.
It won't be easy for
e-cigarette makers either,
who are already being urged
by the Chinese government
to stop selling and advertising
e-cigarette products online.
And the biggest challenge in
China might not be the state
but actually Chinese smokers.
There are over 300
million smokers in China
and about 7 million used e-cigarettes.
But that's less than 1% of
China's total population.
For many Chinese smokers
e-cigarettes are just too expensive
compared to traditional cigarettes.
A e-cig and refill pod can cost them $40,
while a pack of cigarettes
on average costs about $1.
Traditional cigarettes are also embedded
in the country's
ingrained smoking culture.
- It's very common to share cigarettes,
to gift cigarette products,
the sort of social sharing
aspect of cigarette consumption
is one that obviously
is very difficult to replicate
using an e-cigarette.
- Smoking culture is strong
across Asia and initiatives
to get people to quit has
not been as successful
as in the U.S.
Some academics say the
tobacco smoking epidemic
has gotten worse in Asia
in the past few decades.
Cracking the vaping market
in Asia won't be about
just adapting to regulations
but first convincing
smokers that they need to
switch to an alternative.
Whoever figures it out can win big
but the puzzle won't be
an easy one to solve.