n a period of 55 hours starting on the morning of March 22, shares in Chinese vaping company RLX Technology54%, slashing more than $16 billion from the startup’s market cap. The slump continued through the week as investors sold on the news of a potential industry crackdown by China’s tobacco regulator and the Securities and Exchange Commission’s announcement that it would start enforcing a law to require Chinese listed companies to provide audits or risk being delisted.
Wang has had her hands full guiding RLX from an idea in 2017 to a behemoth that has grabbed more than 60% of China’s burgeoning e-cigarette market, according to Shanghai-based China Insights Consultancy. Yet serious threats lie ahead: In late March, Chinese regulators published draft rules that would classify e-cigarettes as tobacco products and potentially bring them under the control of the state monopoly, China Tobacco. That could cause RLX’s hard-fought market share to evaporate if authorities choose to regulate vapes in the same way as cigarettes, rather than as ill-defined tech devices.
"In the traditional tobacco industry, cigarette sales volume and prices are all set by China Tobacco," says Charlie Chen, head of consumer research at Beijing investment firm China Renaissance."If this is applied to e-cigarettes, then that will remove all the value of the e-cigarette companies, but that is a very unlikely scenario."
"I was overwhelmed by the opportunities," she recalls."It was so different from Xi'an, which was very slow paced. In New York, it’s very hard to slow down. It gave me a very different mindset.” “Uber was there but people didn't know. Drivers weren't interested in becoming our partners, so every day I was figuring out how to communicate with them,” she says. “It required me to work as an entrepreneur and overcome challenges that employees normally don't need to.”
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