Relx, one of China’s leading vape startups, launched two flagship stores in Shanghai and Beijing on Saturday, following a national ban on online sales of e-cigarette products in November.

Why it matters: The e-cig industry is pivoting to offline to maintain sales and ensure compliance in response to strict regulation on online purchases and stringent rules on selling to minors.

Details: The startup will invest RMB 600 million ($85 million) in opening 10,000 stores globally within three years, Relx told TechNode in an emailed statement.

  • The flagship stores are only open to adults over 18 years old. Relx said in a press release that “all visitors are subject to strict age verification processes when entering the store or making a purchase.”
  • The stores feature “a brand experience area, a consumer education area, an interactive zone, and device engraving services,” the press release said.
  • Two robots are also in use at each store for engraving e-cigarettes and customizing e-liquids, a Relx spokesperson told TechNode.
  • The stores also feature facial recognition to make sure that minors are “identified automatically and denied service,” the press release said. The project, code-named “Project Sunflower” is in “full effect” at the flagship stores. Retailers face fines of up to RMB 20,000 ($2,891) for first-time offenses and face closure for persistent violations.
  • The company will roll out Project Sunflower at 100 stores across China within three months.
  • Relx said it has opened 1,400 RELX stores across 300 cities in China since its first store in January 2019.

Context: Founded in January 2018, Relx claims to hold over 60% of the market in China. Investors include renowned tech VCs such as Sequoia Capital China, Source Code Capital, and IDG Capital.

  • Back in December, Relx launched a facial detection project to stop minors from entering stores and buying e-cig products. In a press release at the time, the startup said in-store cameras will match customers with ID data to determine their age.
  • Customers must also show ID when purchasing with facial recognition again used to match up with ID databases, Relx said.
  • The Chinese government has enforced stricter regulations in the booming vaping industry, particularly concerning sales to minors.

Eliza Gkritsi

Eliza is TechNode's community listening reporter at the Shanghai office. She acts as a link between the editorial team and TechNode Squared members. She previously worked as a reporter for WikiTribune...

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