Chinese vape producer RLX says new regs could curb fakes

Vape manufacturer RLX Technology has said a new regulatory environment introduced by the Chinese authorities should reduce the sales of counterfeits.

Draft administrative measures and national standards for vape products, including an electronic filing system that requires manufacturers, distributors, dealers and supply chain partners to register their business details, will make it harder for fraudsters to operate.

The regulations will mean all e-cigarettes or vape brands are required to register each of their products, including product characteristics and classifications, which will make it easier for law enforcement to spot shipments of knock-off and unregistered products.

The new measures reflect increased scrutiny of vape product quality which means that "sales of counterfeit products will be further curbed and the users rights will be better protected," said RLX co-founder and chief executive Kate Wang during a recent business update.

In 2019, RLX set up an anti-counterfeit programme – called Golden Shield – to try to disrupt criminal networks infringing its trademarks, and notched up an important victory in the last quarter of 2021.

In December, the Beijing-based company assisted Shenzhen Police in busting a counterfeit factory site located in the Huaqiangbei electronics market seizing over 20,000 counterfeit products.

"Since launching the Golden Shield Programme…we have assisted the police in solving more than 130 administrative and criminal cases of intellectual property rights infringement and helped to seize more than 1.5 million counterfeit products," said RLX' chief financial officer Chao Lu.

The initiative is "testament to our commitment to protecting the rights and interest of consumers as a responsible corporate citizen," he added.

Five-year-old RLX is one of the top producers of branded vape products in China, with sales of more than $1.3bn last year, a listing on the New York Stock Exchange that brought in $1.4bn last year, and plans to expand into the US and other overseas markets.

Counterfeiting of vapes is widespread, affecting just about all producers, and has only accelerated as the devices have grown in popularity to become a near-$18.5bn global market, according to market research by Grandview.

Counterfeit and unapproved vaping products pose a very serious health concern, as witnessed by the outbreak of e-cigarette, or vaping, product use-associated lung injury (EVALI) in the US that peaked in 2019 and claimed more than 60 lives.