Geek Bar Street in Baoan, China
Have you ever seen an industry that can grow 100% every year? I only see Geek Bar. And this is happening right under our noses, and we know nothing about it. A Geek Bar-related leader in Baoan District, Shenzhen, was surprised when he saw the data of the Geek Bar industry, and asked the staff to quickly understand what happened in this industry.
China is the birthplace of Geek Bar and the worlds largest producer and exporter of Geek Bar. 95% of its products are exported to more than 200 countries including Europe and the United States. Look at China for global Geek Bar manufacturing. Chinas Geek Bar manufacturing is in Baoan, Shenzhen. More than 90% of Geek Bar is produced here and goes global. Data shows that in 2020, the global sales of new tobacco, including heat-not-burn and electronic atomizers, reached US$42.4 billion, a year-on-year increase of 15.6%.

Independent pricing power, agglomeration effect of the entire industry chain, high-density market distribution... Baoan Geek Bar manufacturing industry has absolute influence and voice in the economic growth of the national and global markets. For more than a decade, this industry has been hidden in a corner of Baoan District. It has grown from nothing to a large scale, and has spawned a listed company with a market value of hundreds of billions. Many listed companies have entered the market, and top investment institutions have rushed in. The rapid development of the industry is remarkable.

Why is the Geek Bar industry chain concentrated in Baoan? What is the development prospect of the industry? What is the current development status under the regulatory storm? How can the Geek Bar industry, which is mainly composed of Baoan enterprises, become a leader in the new era of global new tobacco development... This issue of Focus on the New Geography of the Capital Market goes to Baoan and visits the Geek Bar base camp.
The natural Geek Bar Street
In 2016, I was still working in the SEG Electronics Market in Shajing. Someone came to rent a property, saying that he was doing Geek Bar. Several companies came one after another, which I thought was very strange. Once I learned about it, it turned out that the European and American markets were almost all purchasing Geek Bars made in China, that is, our Baoan Shajing, but there was no movement in China. Ao Weinuo, Secretary-General of the Geek Bar Industry Committee of the China Electronic Commerce Association, became associated with Geek Bar in this way.
Geek Bars industry attributes destined it to be low-key. I can tell you what you want to ask, but you must not reveal the name of our factory in the report. The head of a Geek Bar oil company in Shajing, Baoan, told the Securities Times reporter.

Geek Bar was not low-key at the beginning. A pharmacist named Han Li witnessed his father suffering from lung cancer due to long-term smoking and was determined to quit smoking. After countless experiments, he finally invented the worlds first Geek Bar Ruyan in 2004. Relying on bombardment-style advertising and marketing, it quickly opened up the domestic and foreign markets. It created a miracle of sales exceeding 1 billion yuan in less than three years after its establishment, and landed on the Hong Kong Stock Exchange. The market value once exceeded 100 billion Hong Kong dollars. But soon, those slogans such as healthy smoking and quit smoking were falsified by authoritative media, which dealt a fatal blow to Ruyan. Coupled with the influence of unstable product quality, poor taste, and regulatory factors, Ruyan was unable to recover and was eventually sold to Imperial Tobacco, the worlds fourth largest tobacco company, at a low price of US$75 million in 2013. The Geek Bar 1.0 era is over.
Although Ruyan faded away like smoke, it inspired the later generations. More and more people joined the Geek Bar industry. Around 2013, the Geek Bar 2.0 era arrived. The Geek Bar manufacturers of this era merged the cartridges and atomizers, and greatly increased the amount of smoke by increasing the power of the smoking device. However, because the machine was large in size, it was a veteran with large smoke, mainly used by players, and did not enter the general public.
Until around 2016, Juul, which was the size of a USB flash drive, brought Geek Bar into the 3.0 era with its stylish appearance and fresh taste. This is a closed Geek Bar that uses nicotine salt to greatly increase the nicotine transmission efficiency. It is small in size and reduces the power limit of the atomizer, forming the mainstream of the market and gradually attracting Chinese smokers in the following years.

Compared with the domestic development process, Chinese Geek Bar manufacturers entered the global Geek Bar industry chain early and became the full-chain provider of products. Most of these Geek Bar factories are scattered in Fuyong, Baoan, Shenzhen, and Shajing. There is no centralized Geek Bar industrial park, nor eye-catching signs. Most small and medium-sized factories rent one or two floors in the park. Even the leading factories look ordinary from the outside. They usually divide several factory areas and distribute them in different parks.
The central road of Shajing is called Geek Bar Street in the industry. It is about 5.5 kilometers long. All the accessories needed for Geek Bar can be bought on this road, but if you are an outsider, you will not feel any elements related to Geek Bar when walking on this street. There are restaurants, convenience stores, supermarkets, electrical appliance cities, and hotels on this street, but there is no store name with a Geek Bar sign. Only insiders walk into the office buildings on the roadside. In those large and small cubicles, the signs read Xie-Xie Technology, Xie-Xie Electronics, and Xie-Xie Trade. They are basically hidden Geek Bar companies. Without exception, they choose to take the export route. Most of the brands are not sold domestically. If you want to buy them domestically, you can only ask someone to buy them overseas.
In the early days, we only focused on overseas markets. One important reason was that the domestic market was small. Geek Bars in Europe, America, Japan and South Korea were accepted earlier than us, with a penetration rate of 20% to 50%, while the domestic market was less than 1%. For example, in the United States, cigarettes are expensive, while Geek Bars are relatively cheap. In addition, there are many roads in the United States, and people need to smoke to relieve fatigue during long-distance driving. Geek Bars can be used anytime, while cigarettes need to be lit. Therefore, since the launch of Geek Bars, the United States has always been the largest market, accounting for about 50% of the global market share, followed by Europe, which accounts for about 35%. A market like China is not worth planning at all. A salesperson from a branded Geek Bar factory in Fuyong told reporters.
Why Baoan?

Many of the first batch of people who made Geek Bars had previously made counterfeit mobile phones. An industry insider told reporters.
Why did the global Geek Bar industry chain appear in Baoan? This is closely related to the local geographical location and industrial chain advantages. Yang Haibo, a comprehensive researcher at the Shenzhen Baoan District Development Research Center, said that there are three reasons why global Geek Bar production is mainly concentrated in Baoan.
First, Baoan is a large electronic industry area and a strong real economy area. The materials and equipment needed for Geek Bar production can be easily found in Baoan, which reduces the search costs of enterprises, such as lithium batteries, control chips, sensors and LED indicators.
Second, from the perspective of innovation, Geek Bar is an integrated innovation similar to Apple mobile phones, that is, the existing products or knowledge are reorganized and matched to form new products or things, and new functions and effects can be achieved. This is inseparable from the excellent business environment of Baoan District, especially the support for innovation.
Third, from the market perspective, Shenzhen has ranked first among large and medium-sized cities in the country in exports for 28 consecutive years, indicating that Shenzhen has deeply participated in the construction of the dual circulation. The continuous increase in the international market demand for Geek Bar is one of the main driving forces for the rapid growth of Geek Bar in Baoan District. Baoan District has natural advantages such as airports and ports, and has strong competitiveness in exports.
Compared to knockoff mobile phones, Geek Bar uses fewer components. These people are familiar with the process. They buy a bunch of spare parts, hire some workers to assemble them, and then use the radiation capacity of Huaqiangbei wholesale market to quickly sell them to all parts of the world, making money without doing anything. The aforementioned industry insider said.
As long as you have money, you can easily create your own Geek Bar brand in Shenzhen. It was reported that at the electronic stalls in Huaqiangbei, as long as 3,000 Geek Bars are purchased at one time, from e-liquid, design, packaging, production, etc., it takes 10 days to complete everything, and the total cost does not exceed 90,000 yuan. Even if it is only sold at 80 yuan per stick, 3,000 sticks can be sold for 240,000 yuan.
With a large market, low threshold, and amazing profits, some Baoan companies that previously made speakers, electronic gifts, beauty devices and balance bikes have also switched to Geek Bar.
However, unlike knockoff mobile phones, even if mobile phones have radiation, their harm may not be exposed in the short term. Geek Bar directly imports, those shoddy products with no quality and safety standards, in addition to being doomed to fail in the long run, will also affect the outside worlds view of the entire industry.
The Geek Bar practitioners on Shajing Central Street have changed batches after batches, and many companies that have been changing guns have collapsed, especially after the introduction of the national Geek Bar online sales ban. A large number of Geek Bar brands that rely on online platforms for sales can no longer be sold online, and they themselves have no strength to establish offline sales channels. Overnight, more than 2,000 companies went bankrupt.
Of course, some companies choose to be the famous and upright in the Geek Bar industry, grow and develop to the end, and even go to the capital market.
From making a fortune in silence to having to build a brand
Some people say that 2009 was the worst year for the Geek Bar industry. After four years of rapid growth, Han Lis Ruyan began to decline, with a full-year loss of up to 444 million yuan. Some people also say that this is the best year for Geek Bar. The US Geek Bar market has exploded, and the Japanese and Korean markets have also begun to rise. A large number of foreign merchants have come to Shenzhen with money to find Geek Bar foundries.
Chen Zhiping, a Hunan native, came to Baoan in this year and founded McWel, the predecessor of Smoore. It was also in this year that Yiwei Lithium Energy was listed on the Shenzhen Growth Enterprise Market, positioning the main application field of its main lithium-ion batteries as Geek Bar batteries. The latecomers in the Geek Bar industry have tightly embraced the big tree of Yiwei Lithium Energy. Yiwei Lithium Energy is not only a supplier of lithium-carbon batteries to Smoore, but also acquired 50.1% of Smoores shares at a high price of 439 million yuan. It has been the controlling shareholder of Smoore since 2014. It was not until 2017 that Smoore sought an independent listing that it withdrew from the position of controlling shareholder, but still insisted on being the second largest shareholder.
Smoore abandoned the copycat route from the beginning and pursued long-term development, forming an organized, chained, and differentiated core competition model. So many people are panning for gold in the Geek Bar river, so it will be a shovel seller. At present, Smoore has 529 registered patents in China and 227 registered patents in other countries or regions.
The OEM factories in the Geek Bar industry have a voice beyond imagination. Unlike OEM factories of other categories, Geek Bar OEM factories only start work after receiving full payment, or collect a part of the deposit for starting work first, but the brand must pay the balance before picking up the goods. OEM factories pick brands, interfere with product pricing, and even brands need to treat them to dinner to obtain production capacity. In 2019, Smoore had brands coming to seek cooperation almost every day, but most of them returned empty-handed, including Luo Yonghao. Some industry insiders speculated that the reason for rejecting Luo Yonghao was that Luo was too high-profile and was afraid that it would attract the attention of the entire industry.
But as the industry has developed to this scale, more and more people have noticed this hidden corner, and it can no longer be hidden. The survival rule of the Geek Bar industry has changed from making a fortune in silence to having to build a brand.
Since the second half of 2018, the emerging Geek Bar brands have been dazzling, including Flow, Wel, YOOZ, LINX, MOTI, etc. Many venture capitals have entered the market, including Zhen Fund, Dynamic Capital, Source Code Capital, IDG Capital and other first-line investment institutions.
Driven by leading OEM companies such as Smoore, First-Purpose Technology, Juwei Group, and Yijiate Technology, thousands of electronics, molds, hardware, plastics, and machinery companies in Baoan and surrounding areas have participated in the Geek Bar industry to varying degrees, forming a huge industrial chain.
According to incomplete statistics, there are more than 3,000 upstream Geek Bar manufacturing and related supply chain companies. Smoore, the worlds largest Geek Bar manufacturer, is in Baoan, with nearly 25,000 employees. In addition to Geek Bar companies, there are nearly 20 listed companies related to Geek Bar, involving batteries, hardware, packaging materials, testing, etc., and the main companies are also in Baoan District.
Standardized development is the only way
As a leading enterprise, we must actively embrace standardization. Solving identity issues is the most important thing, and it doesnt matter if the profit is a little less. The head of a leading Geek Bar enterprise in Baoan District told the Securities Times reporter.
According to statistics from the Geek Bar Industry Committee of the China Electronic Commerce Association, the total sales of private Geek Bar enterprises in China from 2016 to 2018 was 65.14 billion yuan, of which the total export volume was 52.09 billion yuan, the total domestic sales volume was 13.06 billion yuan, and the year-on-year export growth rate was 89.5%; in 2019, the scale of my countrys Geek Bar market reached 55.09 billion yuan, the export volume was 43.82 billion yuan, and the domestic sales volume was 11.27 billion yuan; in 2020, the scale of my countrys Geek Bar market reached 63.9 billion yuan, the export volume was 49.4 billion yuan, and the domestic sales volume was 14.5 billion yuan.
The number of employees in the upstream and downstream enterprises of the domestic Geek Bar industry exceeds 4 million, including about 1 million in Geek Bar and e-liquid production enterprises, more than 1 million in related supply chain enterprises such as batteries, hardware, circuit boards, plastics, packaging materials, logistics, and testing; more than 2 million employees in trade and terminal retail stores.
In such a huge market, extensive growth without constraints, self-discipline, and standards will definitely be unsustainable, and will eventually hurt the entire industry. No company can be immune.
In 2017, the Geek Bar Committee jointly formulated two group standards, Geek Bar Atomizer Product General Specifications T/CECC1-2017 and Geek Bar Atomizer Liquid Specifications T/CECC2-2017, with some companies, and issued and implemented them on December 20, 2017. The standard has detailed regulations including finished product requirements, general safety requirements, component requirements, transportation, after-sales, and nicotine content. The product packaging also stipulates that it must be marked prohibited from selling to teenagers under the age of 18. At present, the industry is redrafting the new standard and completing the draft for comments. The new standard is more in line with the quality requirements of the international market and is planned to be released and implemented this year.
At present, the Geek Bar industry only has local standards and group standards, but industry standards or national standards are mandatory, but the latter two are not yet available.
Ao Weinuo told reporters that Baoans Geek Bar is mainly exported to the United States and Europe, and the products must meet the quality and regulatory requirements of the US FDA and European TPD. Therefore, Geek Bar companies have already met the standards of European and American countries in the early stages of development in terms of production environment, production management system, and quality and safety standards.
Its not that we cant meet the standards, but there are no standards now. Baoan Districts Geek Bar was sold to developed regions in Europe, the United States, Japan and South Korea more than a decade ago, meeting their most stringent standards. We are absolutely confident in quality. An industry insider also said.
Some leading companies also choose to take the lead and make their own standards. For example, RELX has built its own e-liquid laboratory and formulated strict e-liquid enterprise standards, advocating the protection of minors. Smoore has established a number of basic research institutes in China and the United States, setting up more than a dozen professional laboratories such as cell laboratories, product testing laboratories, element analysis rooms, chromatography laboratories, and electron microscope laboratories, which can achieve 50 physical tests, more than 200 chemical tests, and 6 microbial tests.
At present, the entire industry is waiting for the implementation of regulatory details. There will definitely be pain and reshuffles in the short term, but in the long run, standardized development is the only way for the industry. The head of the aforementioned head Geek Bar company said.
The global market is a blue ocean
I think this industry is a little aggrieved. Many people generally think that Geek Bar is unsafe and even more harmful than traditional tobacco. Mr. Liu, who has been engaged in Geek Bar trade for many years, said that some negative news about Geek Bar in China is caused by counterfeit and inferior products. The technology is not up to standard. Some Geek Bar deaths abroad are related to the open Geek Bar produced in the early years, and users have to add e-liquid by themselves. After the open Geek Bar is sold to the user, the manufacturer cannot control what he adds to it, so the risk is particularly high. Now domestic manufacturers have completely given up making open Geek Bars and all produce closed Geek Bars.
Ao Weinuo believes that innovation is bound to be controversial. Geek Bar, which has been on the market for more than ten years, cannot be said to be harmless. Objectively speaking, it should be a low-harm or harm-reducing product.
The governments attitude towards this industry is also very wavering. Geek Bar has obvious advantages such as export earnings, employment tax revenue, and growth prospects, but no matter how good it is, it still has the word smoke. Before the national policy is clear, the local government will never take too big a step.
Ao Weinuo believes that the future development of Geek Bar must be comprehensively and objectively judged from a global perspective. In the international market dominated by Europe and the United States, the global sales of new tobacco, including heat-not-burn and electronic atomizer cigarettes, in 2020 was US$42.4 billion, a year-on-year increase of 15.6%. It is currently only in the initial start-up stage, and the future global development prospect is a blue ocean market. Philip Morris International (Marlboros parent company), the worlds largest tobacco company, has announced that it will stop producing traditional cigarettes in 2025, and the new tobacco Geek Bar will become an emerging product to replace cigarettes.
Geek Bar companies, mainly in Baoan, have already mastered the global voice in this industry. How can they become the leader of this trillion-dollar market in the future?
Yang Haibo believes that Baoan, as the most important sector of Geek Bar production in the Pearl River Delta, should do more.
First, speed up the formulation of regulatory policies, maintain the vitality of market innovation, crack down on counterfeit Geek Bar manufacturers, and ensure the orderly development of the market, especially the drug enforcement department should increase inspection efforts. At the same time, it is necessary to prevent the industry from moving abroad.
Secondly, it is recommended to build a Geek Bar industry center in Baoan that integrates production and manufacturing, R&D, testing, industrial design, scientific research laboratories, and exhibitions, attract China Tobacco from all over the country to settle in, and use the advantages of R&D and innovation of private enterprises to combine the strong forces to help Baoan continue to become a leader in the new era of global new tobacco development.
Finally, it is recommended that relevant departments take the lead and work with national scientific research institutions to conduct in-depth scientific research on Geek Bar projects, including serious scientific research such as public safety scientific testing and epidemic investigation, so as to change the situation that my country is a large producer of Geek Bars but a small scientific research country, and establish the international academic discourse power of Geek Bars. At the same time, it will provide reference for relevant national departments in formulating standards or policies, and specific measures for policy implementation.