Light Wave

World

Chinese firm thumbs nose at FDA rules, sells #1 US teen vape

By Jake Beardslee · December 6, 2023

In brief…

  • Chinese tycoon Zhang Shengwei built disposable vape giant Heaven Gifts, amid ineffective regulation
  • Zhang complied with rules in UK while flooding US market illegally, capitalizing on FDA's poor enforcement
  • China bans domestic flavored vape sales but exports surge, as firms targeting overseas avoid tighter inspection
  • Elf Bar remains #1 US disposable vape despite FDA alerts; Chinese firms flout rules with no consequences
A Chinese vaping tycoon built a global empire through disposable, candy-flavored e-cigarettes, exploiting porous regulation in Western countries while facing a crackdown backed by Beijing’s state tobacco monopoly.  SmileSmith25/Wikimedia

A new wave of cheap, disposable e-cigarettes with flavors like cotton candy and lemonade has hooked teenagers globally, confounding regulators. A tycoon behind this trend is Zhang Shengwei, a 50-year-old veteran of China’s vaping industry. His main company, Heaven Gifts, now competes with giants like Juul and British American Tobacco in the US, UK and Europe.

Zhang has navigated varying regulations on flavored vapes. In the US, Heaven Gifts simply ignored rules on new products and capitalized on poor enforcement to flood the market, according to Reuters. But in the UK, the company complied with nicotine limits and registration rules while building unmatched distribution - driving a surge in youth vaping.

In China, Zhang steered clear of domestic sales, avoiding the temptation of the massive potential market. This proved prescient when Beijing banned all domestic flavored vape sales last year. China cites concerns about youth addiction - though it also operates a lucrative state cigarette monopoly that benefits from vaping regulation.

As China cracks down at home, it helps manufacturers like Heaven Gifts export millions of flavored vapes. Exports boomed after the domestic flavor ban. Companies targeting overseas markets don’t face the new taxes and tighter inspection requirements imposed on China’s domestic industry.

The US FDA has struggled to curb unauthorized flavored imports like Elf Bar despite restrictions since 2020. By ignoring regulations, firms like Heaven Gifts undercut compliant competitors and massively profit while enticing new young users. The FDA claims its alerts likely deter imports, but Elf Bar remains the top US disposable vape brand.