Study On Foreign Market Entry Modes Of Chinese E-cigarette Enterprises Based On Cluster Analysis

As the biggest producer of Vape,China’s complete industry chain system provides excellent environment for the development of Electronic-Nicotine Delivery systems(ENDs),creating a set of design,technology,research and development,production of cutting-edge supply advantages.At the same time,in the context of the global outbreak of the COVID-19 epidemic,international trade has shrunk significantly,and the global penetration rate of atomized e-cigarettes is only 2.5%,the global market size of ENDs has grown against this trend in recent years,highlighting the huge development potential,and providing feasibility analysis for Chinese ENDs enterprises to enter the market has become a topic close to reality.Combining domestic and foreign scholars’ research on overseas market entry modes,this paper sorts out six market entry modes for Chinese ENDs enterprises,which are retailing by foreign trade companies(including cross-border e-commerce);alliance marketing;overseas self-built teams;OEM/ODM;joint ventures;and mergers and acquisitions.In addition,this paper analyzes the factors influencing the option of overseas entry modes of Chinese ENDs enterprises from two levels: host country environment and internal enterprise,and then quantifies six indicators based on the political system,economic level,market potential,retail environment,degree of intellectual property protection,and cultural factors of the target market,and uses cluster analysis to classify the 26 Chinese ENDs enterprises involved in.The results show that for countries such as the United States,United Kingdom,Netherlands,Ireland,New Zealand,Denmark,Canada,where ENDs are already protected by legislation and taxation,with high market demand and consumer spending,the entry mode of self-built teams,mergers and acquisitions,and joint ventures is suitable,in order to overcome trade barriers and capture this high-quality market;for developed European countries such as the France,Germany,Portugal,Spain,Italy,Poland,Slovenia,Czech Republic,Belgium,due to the sparse population and cultural differences,it is difficult for e-cigarette enterprises to achieve economies of scale,so it is not advisable to use the entry mode of excessive resource commitment,and it is recommended to enter by establishing joint ventures or self-built teams.For markets such as Israel,Costa Rica,Korea,Malaysia,which have average level of political regulations and medium to high level of economy,but there are barriers to retail,it is appropriate to choose the market entry mode of self-built team overseas or affiliate marketing.For markets such as Russia and Ukraine,where the legal environment and economic development are poor,it is inappropriate to enter with high resource commitment or high control market entry modes,but with certain geopolitical advantages,overseas self-built teams,alliance marketing or OEM/ODM can be used to enter the market;The Philippines,South Africa,Indonesia,and Pakistan,with their backward political and economic environments and poor retail environment,do not have the policy guarantee for ENDs business operations,Chinese ENDs enterprises should not adopt the joint venture approach that is prone to intellectual property expansion,and suggest a conservative foreign trade approach to enter the market.Finally,combined with the results of the cluster analysis,the supporting suggestions for e-cigarette business abroad are proposed:(1)Build high-tech barriers and compete for new positions in technical fields overseas;(2)Customized products according to the target market;(3)Establish the retail direction according to the target market.