Is the Vape Business Getting Harder? What Smoore’s Chen Zhiping Learned When Profits Were Cut in Half

The global vaping industry is no longer operating under the same rules that fueled its rapid growth a few years ago. Many companies that once relied on fast-moving disposable products, aggressive flavor launches, and easy market access are now facing a very different reality.

Yet during one of the toughest moments in the industry's history, hover:entity-accent entity-underline inline cursor-pointer align-baseline"whitespace-normal"Chen Zhiping offered a perspective that still resonates with manufacturers, brands, and distributors today.

His message was remarkably simple:

• Believe in the future of atomization technology.
• Keep investing in innovation.
• Think long term.

At a time when many competitors were cutting costs, these principles became the foundation of Smoore's strategy.

August 2022: A Difficult Earnings Report

On August 24, 2022, hover:entity-accent entity-underline inline cursor-pointer align-baseline">whitespace-normal">Smoore International released its interim financial results.

The numbers were disappointing:

• Revenue fell to RMB 5.65 billion, down 18.7% year-over-year.
• Adjusted net profit dropped approximately 51.7% to RMB 1.436 billion.
• Gross margin declined from 54.9% to 47.9%.

Industry sentiment was cautious. Regulatory pressure was increasing across multiple markets, and investors were questioning the future of vaping.

During the following earnings conference, Chen Zhiping did not focus on excuses or short-term explanations. Instead, he emphasized three commitments:

Believe in the long-term future of atomization technology.

Continue inventing and innovating.

Remain committed to long-term thinking.

He also made a statement that seemed counterintuitive at the time:

"We do not focus on the gains and losses of a single battle."

While profits were under pressure, Smoore increased R&D spending by 156%, reaching RMB 604 million. Rather than retreating, the company chose to invest more heavily in future technologies.

The Real Challenge of Global Expansion: The Rules Have Changed

Many vaping businesses blame slowing growth on declining demand. In reality, demand has not disappeared.

The market has changed because regulation has changed.

1. Disposable Vapes Are Being Redefined

Several European countries have tightened restrictions on disposable vaping products:

• Belgium banned disposable vapes from January 1, 2025.
• France implemented its disposable vape ban on February 25, 2025.
• The United Kingdom introduced a nationwide disposable vape ban on June 1, 2025.

For years, many businesses relied on a straightforward model:

Low price + strong flavors + widespread retail distribution

That model is becoming increasingly difficult to sustain.

2. Regulatory Authorization Is Becoming the Ultimate Competitive Advantage

In the United States, success increasingly depends on the FDA's Premarket Tobacco Product Application (PMTA) process.

The question is no longer simply whether consumers want vaping products.

The question is whether a product can legally remain on the market.

Manufacturers that can support brands with regulatory submissions, scientific documentation, quality control data, and product consistency testing hold a significant advantage.

Today, compliance is often a bigger competitive factor than marketing.

3. Demand Is Returning to More Advanced Systems

When disposable products disappear from shelves, consumer demand does not vanish.

Instead, many users migrate toward:

• Pod systems
• Refillable devices
• Advanced closed-system products

These categories require higher engineering standards, including:

• Leak-resistant design
• Consistent power delivery
• Stable flavor performance
• Child-resistant protection systems
• Reliable manufacturing quality

Those challenges cannot be solved with a new exterior design or packaging update. They require genuine technological capability.

Translating Chen Zhiping's Three Principles Into a Global Business Strategy

1. Believing in the Future Means Building a Stronger Narrative

Many companies have historically marketed vaping products as lifestyle accessories or trend-driven consumer goods.

That approach becomes vulnerable when regulations tighten.

A more durable strategy is to position atomization technology within broader, long-term applications:

• Adult smoking alternatives
• Harm-reduction research
• Precision aerosol delivery
• Medical atomization technologies
• Wellness and healthcare applications

Businesses that rely solely on regulatory loopholes often struggle when policy changes.

Businesses built around legitimate technological value tend to adapt more successfully.

2. Innovation Must Create Something Difficult to Replace

One of the most revealing decisions Smoore made during the downturn was increasing R&D investment despite declining profits.

The reasoning was straightforward:

Manufacturing efficiency alone is no longer enough.

Future profitability will increasingly come from:

• Proprietary technology
• Product reliability
• Scientific validation
• Advanced manufacturing capabilities

Examples include:

Technology Platforms

The FEELM ceramic coil platform demonstrates how technology can become a differentiator rather than competing solely on price.

Instead of asking customers to pay for a device, companies can create value that customers are willing to pay for repeatedly.

Patent Development

A strong patent portfolio does more than protect intellectual property.

It can also support regulatory submissions by demonstrating:

• Product consistency
• Technical innovation
• Safety research
• Manufacturing controls

Localized Operations

Successful international expansion increasingly requires:

• Local compliance teams
• Regional warehousing
• Market-specific support
• Digital channel management

Simply shipping products overseas is no longer enough.

3. Long-Term Thinking Treats Compliance as an Investment

Many businesses view compliance as an expense.

The strongest companies increasingly view compliance as a competitive asset.

This includes investments in:

• Product testing
• Registration requirements
• Age-verification systems
• Environmental and recycling programs
• Quality assurance infrastructure

These investments may reduce short-term margins, but they can create barriers that weaker competitors struggle to overcome.

Three Difficult Truths About the Future of Vaping

Europe's Disposable Vape Ban Is Not the End of the Industry

The market is not disappearing.

The competitive landscape is being reorganized.

Success is shifting from low-cost production toward:

• Regulatory readiness
• Product quality
• User experience
• Supply chain reliability

For compliant manufacturers, this transition may create opportunities rather than obstacles.

The U.S. Market Rewards Documentation, Not Promises

Brands and distributors increasingly need partners that can provide:

• Technical documentation
• Product testing reports
• Manufacturing records
• Consistency data

Without those foundations, market access becomes significantly harder.

Atomization Technology Has Value Beyond Traditional Vaping

One of the most important strategic lessons is that atomization expertise should not be limited to a single category.

The same core capabilities can potentially support:

• Heated tobacco products (HNB)
• Medical atomization devices
• Pharmaceutical delivery systems
• Other regulated aerosol technologies

Companies with transferable technology platforms are often better positioned to navigate industry cycles.

Source: Vape Community

Final Thoughts

When a business faces difficult conditions, the first instinct is often to focus on immediate sales, lower prices, or short-term survival.

The stronger question is:

What remains valuable when regulations become stricter?

Review every product in your portfolio and ask:

• Does it compete mainly on flavor and appearance?
• Or does it compete on engineering, materials, safety, and consistency?
• Is growth dependent on regulatory gray areas?
• Or is it supported by compliance assets and long-term capability?

In 2022, Chen Zhiping chose to invest heavily in future technologies during a period of declining profits. That decision reflected a belief that the greatest risk was not temporary financial pressure—it was remaining trapped in an outdated business model.

As global vaping regulations continue to evolve, the companies most likely to succeed will not necessarily be those selling the most products today.

They will be the companies capable of operating successfully under the strictest regulatory environments tomorrow.