Juul plans India e-cigarette entry with new hires, subsidiary

Godfrey Phillips India

30/01/2019 14:00

(Repeats with no changes to text)
    * E-cigarette giant Juul hopes to enter India this
year-source
    * U.S.-based Juul would face regulatory challenges in India
    * India plan part of wider Juul push into Asia 
    * Juul hiring new staff, planning India subsidiary

    By Aditya Kalra and Chris Kirkham
    NEW DELHI/LOS ANGELES, Jan 30 (Reuters) - U.S.-based
electronic cigarette company Juul Labs Inc is hoping to launch
its products in India by late 2019, a person familiar with the
strategy told Reuters, marking one of its boldest bets to expand
away from its home turf.
    After recruiting Uber India executive Rachit Ranjan as a
senior public policy strategist, Juul this month hired
India-based Mastercard executive Rohan Mishra as head of
government relations.
    It plans to hire at least three more executives, including
an India general manager, LinkedIn job postings showed. It also
plans "a new India subsidiary", according to one posting.
    "It (the plan) is currently at an exploratory stage, but the
company needs people on the ground in India," the source said.
    Juul's sleek vaping devices, which resemble a USB flash
drive and offer flavours such as mango and creme, are a
sensation in the United States but have drawn tighter regulatory
scrutiny due to surging use among teenagers.  urn:newsml:reuters.com:*:nL2N1XK05W
    Juul devices, like most electronic cigarettes, vaporize a
liquid containing nicotine, the addictive stimulant that gives
smokers a rush. 
    Advocates for the devices say that they are far less of a
health threat because users don't inhale the dangerous matter
taken into the lungs through cigarette smoking.
    Opponents argue the devices still involve addictive
chemicals and can be a gateway to cigarette smoking, especially
for the young.
    The push to launch in India is part of the company's broader
Asia strategy. India has 106 million adult smokers, second only
to China in the world, making it a lucrative market for firms
such as Juul and Philip Morris International Inc  PM.N .
    However, India's regulatory environment for tobacco and
electronic cigarettes is highly restrictive. The health ministry
last year advised states to stop the sale or import of
e-cigarettes, saying they pose a "great health risk". Eight of
India's 29 states currently ban e-cigarettes.  urn:newsml:reuters.com:*:nL3N1VK28S
    Juul is studying federal and state regulations that could
block its plans, the source said, adding that it would engage
with the medical community to build acceptance for the devices.
    Juul said in a statement India was among the Asian markets
under evaluation, but there were no "definitive plans".
    "As we explore potential markets, we are engaging with
health regulators, policymakers and other key stakeholders," the
company said. 
    
    MEDICAL JOURNAL
    As part of its evaluation, Juul said it would consult with
the Indian Journal of Clinical Practice (IJCP), a healthcare
communications company. 
    One of the journal's editors is a former president of the
Indian Medical Association, K.K. Aggarwal, who has publicly
voiced his support for e-cigarettes.
    The IJCP will advise Juul on the regulatory landscape and
offer advice on how it should approach the market, a second
person familiar with the plans said.
    Juul would face competition from leading players in India's
$10 billion cigarette market - ITC  ITC.NS  and Godfrey Phillips
 GDFR.NS  - which sell such electronic devices as well.
    India's vapour-products market was valued at only $15.6
million in 2017, according to Euromonitor International, but it
is expected to grow by nearly 60 percent a year up to 2022.
    Juul could be "potentially very attractive" to the growing
number of young and wealthy smokers in India, said Shane
MacGuill, Head of Tobacco Research at Euromonitor International.
    Altria Group Inc last month paid $12.8 billion to take a 35
percent stake in Juul, a move expected to boost the company's
international growth prospects.  urn:newsml:reuters.com:*:nL3N1YP380
    Philip Morris is also considering a launch of its
heat-not-burn tobacco device iQOS in India, which it says is
less harmful than conventional cigarettes, Reuters reported last
year.   urn:newsml:reuters.com:*:nL3N1TA2DN
    Many tobacco-control activists are opposed to e-cigarettes,
saying they could lead to nicotine addiction and push people to
consume tobacco. More than 900,000 people die each year in India
due to tobacco-related illnesses.
    "If they (Juul) try to launch in India, they need to be
nipped in the bud before they become a major health hazard,"
said Sanjay Seth, head of tobacco-control at Indian non-profit
Sambandh Health Foundation.

 (Reporting by Aditya Kalra
Editing by Martin Howell and Darren Schuettler)
 ((aditya.kalra@thomsonreuters.com; +91-011-49548021; Reuters
Messaging: aditya.kalra.thomsonreuters.com@reuters.net (Twitter:
@adityakalra))