Introduction: A Challenging Year for China’s Vape Industry Leader

The vape, vapor, and e-cigarette industry witnessed significant turbulence in 2024, as evidenced by Boton Group’s latest financial report. As one of China’s leading manufacturers of electronic cigarettes and flavor enhancers, Boton’s performance offers crucial insights into the global vape market’s current challenges and future opportunities.

On March 24, 2025, Boton Group (HKEX: 03318) released its annual financial results for the fiscal year ending December 31, 2024. The report revealed:

• Total Revenue: ¥1.653 billion CNY (~$229 million USD), down 19.9% YoY
• Gross Profit: ¥598 million CNY (~$83 million USD), down 25.1% YoY
• Net Profit: ¥63.3 million CNY (~$8.8 million USD), down 55% YoY

The most concerning figure for vape industry stakeholders was the 29.1% decline in e-cigarette product revenue, which fell to ¥640 million CNY (~$89 million USD). This sharp drop reflects broader challenges facing the global vape market, including regulatory pressures, economic slowdowns, and shifting consumer trends.

In this in-depth analysis, we’ll examine:

• Key factors behind Boton’s financial decline
• Performance breakdown of its e-cigarette & flavor divisions
• How global vape regulations are impacting Chinese manufacturers
• Emerging opportunities in fruit-flavored vapes and nicotine alternatives
• Strategic recommendations for vape sellers in 2025

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Boton Group’s 2024 Financial Performance: Key Takeaways

1. Overall Revenue Decline (-19.9%) – What Went Wrong?

Boton attributed its ¥1.653 billion revenue (down from ¥2.065 billion in 2023) to:

• Global economic slowdown (reduced consumer spending on vaping products)
• Geopolitical tensions (trade restrictions, tariffs)
• ¥67.4 million goodwill impairment loss (from acquisitions)
• Stricter vaping regulations in key markets (EU, US, Southeast Asia)

2. E-Cigarette Division: A 29.1% Drop in Sales

Boton’s electronic cigarette segment generated ¥640 million, down sharply from ¥903 million in 2023. This decline was driven by:

• China’s flavor ban (restricting fruit-flavored vapes)
• US FDA crackdowns on disposable vape imports
• Increased competition from brands like ELF Bar, Lost Mary, and RELX

3. Flavor Enhancer Division Also Struggles (-21.7%)

• Revenue: ¥602 million (down from ¥769 million in 2023)
• Cause: Reduced demand from international vape manufacturers

4. Bright Spots: Food & Daily Fragrances Show Growth

• Food flavorings: ¥190 million (slight increase)
• Daily-use fragrances: ¥170 million (+2.4%)
• Investment properties: ¥51.2 million (+12.1%)

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Why Did Boton’s E-Cigarette Business Decline?

1. China’s Vape Flavor Ban (October 2022)

• Fruit, dessert, and candy-flavored vapes were banned, leaving only tobacco-flavored e-liquids.
• This severely impacted Boton’s B2B vape juice supply chain.

2. US & EU Regulatory Crackdowns

• FDA’s strict PMTA approvals blocked many Chinese vape brands.
• EU’s TPD revisions may soon ban disposable vapes and flavors.

3. Rising Competition from Disposable Vape Brands

• Companies like ELF Bar, Geek Bar, and Lost Mary dominated Western markets.
• Boton’s OEM/ODM model struggled against these direct-to-consumer brands.

4. Global Economic Pressures

• Inflation reduced disposable income for vaping products.
• Vape taxes in the UK, Germany, and Canada hurt sales.

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Future Strategies: Can Boton Recover in 2025?

Despite the downturn, Boton is implementing cost-cutting measures and new automation technologies to improve margins. Key strategies include:

1. Expanding into Non-Nicotine & CBD Vapes

• CBD-infused e-liquids (for markets like the UK & Switzerland)
• Nicotine-free disposables (to bypass regulations)

2. Targeting Emerging Markets

• Middle East (UAE, Saudi Arabia) – fewer flavor restrictions
• Southeast Asia (Malaysia, Philippines) – booming vape culture

3. Investing in Heat-Not-Burn (HNB) Technology

• IQOS-compatible products for markets like Japan & Russia

4. Strengthening B2B Flavor Solutions

• Custom flavor development for international brands

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What Does This Mean for Vape Sellers?

1. Diversify Your Product Mix

• If fruit-flavored vapes face bans, stock:
  • Tobacco/menthol-only devices
  • Nicotine pouches & HNB products

2. Focus on Compliance & Age Verification

• Stricter ID checks to avoid penalties in regulated markets.

3. Explore Alternative Markets

• Latin America (Mexico, Brazil)
• Africa (South Africa, Nigeria)

4. Monitor Regulatory Changes Closely

• EU’s potential flavor ban (expected late 2025)
• US FDA enforcement updates