SHANGHAI - With the opening of its new flagship store in Shanghai, leading e-cigarette manufacturer RELX Technology announced on Saturday its intention to invest RMB 500 million in establishing 10,000 stores globally over the next three years in a big expansion for the Chinese vaping startup.
RELX, founded in January 2018, is Asia's leading e-cigarette company geared towards empowering adult smokers through technology and design, ethically. RELX develops its cutting-edge e-cigarette products at its R&D center in Shenzhen, China.
RELX only ventured into the retail business in January last year and now operates over 1,400 RELX stores across 300 cities in China. The majority of which are located in China and run by third-parties.
As China's biggest e-cigarette brand holding a market share above 60%, the company is poised to strengthen its lead by accelerating its retail business.
At the news conference, Relx co-founder Jiang Long said that in addition to the company's branded retail outlets, it would attempt to get its products on sale in more convenience stores, electronics shops, and corner shops.
Relx's expansion comes as many Chinese e-cigarette brands look to sales from actual stores to drive growth following a move by Chinese regulators last year to call for a ban on online sales and advertising of e-cigarettes.
Regulators overseas are also looking at how to regulate the nascent industry. Earlier this month, the Food and Drug Administration in Washington took steps to curb the sale of flavored e-cigarettes in the United States.
RELX said that 20% of its sales currently come from overseas.
The company's retail outlets, as it expands, will be a combination of company-owned stores such as its first flagship store in China, unveiled at a news conference on Saturday, and franchised locations. The new Shanghai store is a sleek 140-square-meter shop in the Nanjing West Road shopping district.
RELX deploys facial recognition cameras in Shanghai store
RELX opened its first flagship store in China this month equipped with facial recognition cameras that would alert staff when a suspected underaged person enters the store.
The deployment of these cameras is part of the company's Project Sunflower scheme, which prevents underage access and use of e-cigarettes by minors. Under the scheme, customers undergo another layer of automated verification to ensure a match between them and the ID presented when making a purchase.
Project Sunflower is already being implemented nationwide, with RELX aiming to install the system in 100 stores within the next three months and across all RELX stores within seven months. Under an unwavering penalty system, any retailers caught selling products to minors are set to be fined RMB 200,000 for first-strike offenses, with the possibility of total suspension of business in the event of future strikes.
"The flagship store demonstrates Project Sunflower's central role in RELX's retail division."
"As a visionary company, RELX is prepared to shoulder the responsibility of blazing the trail in tech-enabled social responsibility."Jiang Long, co-founder, and head of sales.
The newly opened flagship store occupies 140 sqm space in Shanghai's bustling central business district. It features a brand experience area, a consumer education area, an interactive zone, and device engraving services.
"Consumers nowadays prefer immersive shopping experiences, and we want to make this flagship a place where we can not only better communicate with them about our product and values but also better understand their needs. We're always on the lookout for ways to better serve our consumers."Wang Tao, head of RELX's new retail business. "
Wang Tao added that RELX will launch stores in areas of interest in various cities, such as Beijing's 798 art hub and Shenzhen's Haigangcheng, to provide avant-garde experiences to consumers.
"RELX is investing heavily in breakthrough technologies to enhance franchisees' profit margins and increase consumer loyalty during the course of its brick-and-mortar expansion."
"As always, our focus will remain on preventing minors from using e-cigarette products and leading the path of innovation for the entire industry by developing advanced retail technology.”Jiang Long
Regulatory scrutiny in both the United States and China has placed pressure on China's e-cigarette supply chain in the southern city of Shenzhen, where approximately 90% of the world's e-cigarettes are manufactured.
According to China's top e-cigarette trade association, the labor force across the industry's supply chain in the country shrank approximately 10% last autumn due to regulations dampening demand.