KUALA LUMPUR, June 30 ― China-based e-vapour company RLX Technology (RLX) listed on the New York Stock Exchange early this year and its market value today is already US$14.1 billion (RM58.4 billion).
In his analysis of RLX, investment and economic analyst Pankaj Kumar says Malaysia too can be a significant player in the global vape market with the right regulatory framework to draw investors in the industry.
In a press statement, Pankaj explained that the vape sector drew his attention “following a new study conducted by Grand View Research, Inc. that projected the global vape market size to reach US$67.31 billion by 2027.”
“According to the Malaysian Vape Chamber of Commerce, there are more than 330 manufacturers and importers in the country, of which some 28 per cent are already exporting their end products overseas. The vape industry employs more than 3,000 retailers and employs more than 15,000 Malaysians,” he added.
Pankaj said the thriving Malaysian vape industry “can be a significant economic contributor to Malaysia’s growth.”
“In addition, there is growing demand in South-east Asia, as more countries in this region are moving towards regulations such as the Philippines and Indonesia.
“It is foreseeable that more Chinese companies in the vape industry would make the strategic move to expand their manufacturing footprint outside of China to set up regional manufacturing hubs to grow its consumer base in this region,” he added.
In the statement, Pankaj emphasised that Malaysia needs to be prepared for these strategic expansions by Chinese vape companies.
“First, is to take the step to regulate the vape industry. Investors are more ready to invest in a country when the government maps out regulation for the industry as this provides certainty to the industry and to the investors.
“Second, is to make sure that the products that are sold meet safety and quality standards. This would give confidence to consumers that the products are regulated and safe to be used.
“Third, is to provide a level playing field on taxes imposed as presently only liquids for e-cigarette that are zero nicotine-based, attract excise duty of 40 sen/ml while nicotine-based liquids, which is more than 95 per cent of the market, is left untaxed and unregulated.”
Pankaj added that with these regulations in place the government stands to gain significantly in both tax revenues and foreign investments.