Wicked Wizard E liquid In France, an E cigarette Bubble?
In France, an E cigarette Bubble?
PARIS — What’s life like inside a bubble?
Ask any one of the some 400 entrepreneurs in France who in the last year or so have thrown themselves into the e cigarette business, opening boutiques with names like Smok’It, Ciga’Lib, Ci-Klop and AlterCig.
Like mushrooms after a rain, these little shops keep springing up all over the place, Paris in particular. Just in the last year, six have opened for business in a 500-meter, or 1,600-foot, radius in a neighborhood just north of the Paris Opéra.
For now, the business is a no-brainer, or a “golden chicken,” as Richard Zeitoun, owner of the Ciga’Lib store on the Rue St. Lazare, put it.
A former two-pack-a-day smoker, Mr. Zeitoun, semi-retired at 55, was quick to spot both a business opportunity and a chance to quit. “It’s the cigarette of tomorrow,” he said, fingering his e cigarette as he outlined plans to open a third store in Paris.
The e cigarette, a product made exclusively in China that turns nicotine-infused propylene glycol into an inhalable vapor, is already sweeping the globe, with an estimated $4 billion in sales this year. It may be here to stay, but it’s unlikely that all the eager entrepreneurs who’ve joined the gold rush will survive long enough to enjoy its success.
The e cigarette, a product made exclusively in China that turns nicotine-infused propylene glycol into an inhalable vapor, is already sweeping the globe.
“This bubble will burst,” predicted Emmanuel Clari, co-owner of a seven-month-old upscale Paris boutique with the ironic name of Demain, j’arrete... (Tomorrow, I quit...). “It’s going to be determined by the law of the jungle.”
With some 15 million smokers, France is a promising market. In just a few years, more than one million people have picked up the e cigarette habit, while the number of dealers has increased tenfold. One, Clopinette, already has a chain of 52 stores.
The lure is a business model that Mr. Clari, a 32-year-old business school graduate, describes as “super.”
For one thing, e cigarettes in France are taxed at 19.6 percent, compared with the 81.1 percent levy on regular cigarettes, which, at more than €6, or $8.20, a pack, are now among the most expensive in Europe. While licensed tobacco sellers make 6.7 percent per pack, e cigarette vendors get 50 percent of the revenue on their product.
Plus, e cigarettes, which range in price from €35 to €100, require new batteries and regular nicotine liquid refills, making it a kind of mini-Nespresso machine that brings the customer back again and again. More than 100 exotic flavors — some made in France — offer customers the tingle of novelty.
And with every hike in cigarette taxes, more smokers are looking for ways to stop. Cigarette sales in France, which fell 10 percent in the first three months of this year, declined further after another tax increase in July.
“We can offer a small pleasure that is healthier, cheaper and cleaner, which is what every smoker wants to hear,” said Mr. Clari. “Finally, it is a toy for adults and a boon for nonsmokers.”
Paris has seen other bubbles that eventually burst. In recent years, tanning salons, teeth-whitening clinics, gold shops and mobile phone vendors have come and gone, as their businesses were eroded by health concerns or major shifts in markets.
In many cases, the e cigarette has taken their place, literally: after losing customers to a flood of cheap offers from phone companies, some mobile phone vendors have split their stores in two, with phones on one side, and e cigarettes on the other.
But the e cigarette entrepreneurs sense trouble ahead. The field is already too crowded for a single product that to date is not protected by a patent. They dodged one bullet recently when the European Union rejected a ruling requiring e cigarettes to be sold in pharmacies as medical devices.
There are more threats coming. The French government is hungrily eyeing higher taxes. Other regulations are sure to follow, just as major players — tobacco companies and e-commerce companies — are poised to move in on a lucrative market. “Tabac” stores, desperate to stay in the game, are stocking up on disposable e cigarettes.
As the pressure mounts, Mr. Clari is counting on a play for quality over price, with an emphasis on deluxe products and expert service.
“We’re waiting for the bust,” he said, “and we’re getting ready.”