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Song, X.; , .; Zhang, Y. E-Cigarette Industrial Clusters in Shenzhen. Encyclopedia. Available online: https://encyclopedia.pub/entry/23502 (accessed on 07 July 2024).
Song X,  , Zhang Y. E-Cigarette Industrial Clusters in Shenzhen. Encyclopedia. Available at: https://encyclopedia.pub/entry/23502. Accessed July 07, 2024.
Song, Xia, , Yanan Zhang. "E-Cigarette Industrial Clusters in Shenzhen" Encyclopedia, https://encyclopedia.pub/entry/23502 (accessed July 07, 2024).
Song, X., , ., & Zhang, Y. (2022, May 27). E-Cigarette Industrial Clusters in Shenzhen. In Encyclopedia. https://encyclopedia.pub/entry/23502
Song, Xia, et al. "E-Cigarette Industrial Clusters in Shenzhen." Encyclopedia. Web. 27 May, 2022.
E-Cigarette Industrial Clusters in Shenzhen
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This entry is adapted from the peer-reviewed paper 10.3390/su14095606

As an emerging industry, e-cigarettes have been greatly prosperous globally in recent years. In China, Shenzhen is the center of e-cigarette production, and a complete business ecosystem has been built at this point. 

Shenzhen e-cigarette business ecosystem population life history niche technological innovation

1. Introduction

E-cigarettes, a new type of tobacco product, are enjoying great prosperity around the world. In the 1960s, the American engineer Gilbert proposed the idea of e-cigarettes. In 2003, Han Li of China invented the first e-cigarette product and founded the “Ruyan” brand [1]. With the increase in public health awareness and other factors, the traditional tobacco market remains sluggish and sales have decreased in recent years, while the e-cigarette industry is undergoing accelerated development and its market size is expanding constantly. According to data from the Electronic Cigarette Industry Committee of the China Electronics Chamber of Commerce, global sales of e-cigarettes reached USD 33 billion in 2019, a 106.25% increase compared with 2018 and a 14-fold increase compared to 2012. Global e-cigarette retail scale increased from USD 16.1 billion in 2016 to USD 56.9 billion in 2021. China’s e-cigarette market scale is also expanding, reaching CNY 116 billion in 2021, with most products exported overseas.
In the early stage of the e-cigarette industry, Chinese non-tobacco companies first entered the e-cigarette field. In recent years, with the popularity and rapid development of new tobacco products worldwide, traditional tobacco companies such as the Yunnan China Tobacco Group and the Shanghai Tobacco Group have started e-cigarette businesses and launched a series of products [2]. At present, the global e-cigarette industry presents a pattern of the manufacturing center being located in China and the sales center being located in Europe and the United States [3]. China is a major producer of e-cigarettes, with more than 90% of products in the global e-cigarette market being produced by private Chinese enterprises. Despite the continuous growth of e-cigarette production in China, e-cigarette consumption in China is relatively in a downturn. Of the total production, 90% is for export, and there are only a few influential Chinese e-cigarette brands [4].
Shenzhen, the center of Chinese e-cigarette production, has agglomerated thousands of e-cigarette enterprises and has developed a complete business ecosystem consisting of producers, suppliers, sellers, and competitors. E-cigarette manufacturers in adjacent cities are also in rapid development, driven by the prosperity of the Shenzhen e-cigarette industry [3][4].

2. Business Ecosystem Theory and Life History Theory

An industrial-level analysis of the structure and development of the Shenzhen e-cigarette industry is based on business ecosystem theory and life history theory. The concept “business ecosystem” was first proposed by Moore [5]. A business ecosystem refers to a structured community that crosses a variety of industries, in which the business activities of different companies share the same fate and the companies coevolve capabilities around a new innovation [6]. A business ecosystem evolves in four stages: birth, expansion, leadership, and self-renewal; if there is no self-renewal, the ecosystem will head towards death [5]. After decades of development, a complex business ecosystem has been constructed for the Shenzhen e-cigarette industry. The core ecosystem is effectively integrated with surrounding components, including extended ecosystems, symbiotic species, and competitive species, which stabilizes the development of the industry. The complex structure of the business ecosystem has experienced long-term evolution. Therefore, this study illustrates the business ecosystem structure and evolution process of the Shenzhen e-cigarette industry.
“Life history” refers to the entire process experienced by plant populations from seed germination to seed formation, including the life history characteristics of plant populations at various stages of the life cycle and their interactions with other organisms in their habitats [7]. The life history of plant populations includes two aspects:
(1)
The life history strategy, which represents the adaptation patterns of plants in specific habitats. The life history strategies employed by plant populations are the result of plants allocating limited resources to various functions, such as growth, reproduction, and defense [8][9]. Primary research on the life history strategy in ecology was qualitative until MacArthur and Wilson proposed the r–K selection theory [10]. In the r–K selection theory, the life history strategies of organisms are divided into the r strategy, for developing in changing environments, and the K strategy, for keeping stability in stable environments. Grime [11] further classified the life history strategies of plants by their resource and habitat conditions and established the CSR triangle model, where “CSR” represents three basic strategies: C—competitive strategy, S—stress-tolerant strategy, and R—ruderal strategy (Figure 1). According to the CSR triangle model, external factors that limit plant biomass in habitats consist of two types: stress—conditions that restrict production, and disturbance—biological activities and physical phenomena that cause plant biomass destruction. In their adaptation to different forms of stress and disturbance in habitats, the evolution of plant populations is associated with three different strategies: The competitive strategy (C) prevails in productive and relatively undisturbed habitats (low stress with low disturbance), in which plants are characterized by high vegetative growth and competitiveness. The stress-tolerant strategy (S) is associated with continuously unproductive conditions (high stress with low disturbance), in which plants are weak in both growth and reproduction for endurance. The ruderal strategy (R) is characteristic of severely disturbed but potentially productive habitats (low stress with high disturbance), where plants have a short life span and high seed production. The life history strategy has been applied in the strategic choices of organizations in previous studies. Enterprises may differentiate into the r strategy type and the K strategy type during their adaptation to the market environment [12][13]. Compared with the r–K selection theory’s single evaluation criterion of environmental stability, Grime’s CSR theory takes both the resource and environmental conditions into account in life history strategy classification. Hence, the analysis of the development strategies of the Shenzhen e-cigarette industry adopts the CSR triangle model, owing to the technical and environmental complexity of the e-cigarette industry in this study.
Figure 1. Diagram of the CSR triangle model.
(2)
Interspecific relationships, which represent the interactions and coevolutionary behaviors between plants and other organisms in a habitat [8]. Similar relationships exist in enterprise populations, including competition, cooperation, mutualism, parasitism, commensalism, etc. [14]. These relationships have significant impacts on the enterprise populations and the entire business ecosystem. Numerous scholars focus on interspecific relationships between enterprise populations. Mathematical methods such as the logistic model and the Lotka–Volterra model are involved in studies on enterprise interspecific relationships to conduct quantitative research on enterprise populations [15][16][17]. For e-cigarettes, a new industry that lacks data and research, it is necessary to characterize the relationship between the enterprise populations for future works. After years of development, a complete industrial chain, including upstream, midstream, and downstream, has been established in the Shenzhen e-cigarette industry. Relationships between enterprise populations along the industrial chain are complex. Mutualistic symbiosis exists behind their competition behaviors. Coevolution achieved by mutualism is an important relationship between enterprises in the business ecosystem, which is conducive to the stability and development of the whole ecosystem [18]. Hence, this study focuses on interspecific relationships between different e-cigarette enterprise populations, especially their coevolution behavior achieved by mutualism.

3. Niche Theory

A niche, which describes the roles, functions, and impacts of species in the environment, is a fundamental concept in ecological study. In the 1970s, niche theory was introduced in management science, and an “enterprise niche” was proposed by scholars [19]. Quantities of literature explain the concepts of an enterprise niche. From the static level, an enterprise niche represents the space and environment occupied by enterprises [12][20][21]. From the dynamic level, an enterprise niche is the capabilities of enterprises to engage in survival, development, and competition, in which core technological capability and manufacturing capability play vital roles [22]. Recent literature combines both the static and dynamic attributes of enterprise niches. The former are the resources controlled by enterprises. The latter are the impacts enterprises have on the environment and the capabilities of enterprises for competition and development [23].
The niches of organisms are often characterized by the niche breadth and overlap. For the niche breadth, different biological interpretations have been proposed by different ecologists [24][25][26][27][28][29]. The niche breadth of a species can be estimated by measuring the uniformity of the distribution of individuals of that species in the resource matrix [30]. According to this principle, Levins established Levins’ standardized niche breadth index for niche breadth metrics [31]. Levins’ index was developed by other scholars from the perspectives of resource availability and resource matrixes [30][32]. Additionally, varieties of niche measurement approaches were also proposed by follow-up researchers, such as Pielou’s index, Petraitis’ index, and Hurlbert’s index [25][33][34][35][36]. Niche overlap is defined by previous literature from many perspectives, such as resource utilization, interspecific similarities, and interspecific encounter frequency [25][30][37][38]. This study adopts niche overlap as the joint use of resources by two or more species [30]. Approaches of niche overlap measurement include Pianka’s symmetrical niche overlap index, Levins’ asymmetrical niche overlap index, Hurlbert’s encounter-frequency-based niche overlap index, etc. [25][31][39]. In addition to their widespread application in ecology, the niche breadth and overlap are also introduced by scholars in the evaluation of enterprise niches in recent years [40][41][42][43][44][45].
As an emerging industry, the Shenzhen e-cigarette industry is at the peak of product R&D (research and development). Therefore, technological innovation plays a crucial role in enterprises’ development. Simultaneously, there is also a change in the market structure of the industry and competition between the enterprises is becoming increasingly fierce. With the intensification of competition, the environmental suitability and scalability of e-cigarette enterprises in the business ecosystem are also changing, that is, the enterprise niche is in variation. Technological innovation is important for e-cigarette enterprises to improve product quality, enhance the efficiency of resources’ utilization, and thus occupy favorable niches. For e-cigarette enterprises, the innovation-related niche breadth represents resources that they have occupied in different innovation orientations, and innovation-related niche overlap refers to resources jointly utilized by two enterprises.

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