By Josh HORWITZ
SHANGHAI (Reuters) – E-cigarette company Relx Technology said on Saturday it will open 10,000 stores globally over the next three years in a big expansion for the Chinese vaping startup.
Relx currently has more than 1,400 stores globally, the majority of which are located in China and run by third-parties.
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.
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.
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.
(Reporting by Josh Horwitz in Shanghai. Editing by Jane Merriman)