Having survived a global regulatory crackdown on vaping, a rebounding RLX Technology Inc. (RLX.US) is looking to the next big thing in other smokeless products containing nicotine, the main ingredient that smokers crave from tobacco. Meantime, the former Chinese vaping king continues to expand its footprint in other countries, as its home China market struggles to stamp out illegal products that now account for up to 90% of vaping sales.
Global expansion was the big driver for RLX in the second quarter, as it gained access to Europe with a new acquisition that closed in May. That purchase, along with growth in other international markets, helped to lift RLX’s revenue by 40% in the second quarter to 880 million yuan ($123 million) from 627 million yuan a year earlier, according to its latest quarterly results announced last Friday.
The strong growth comes on the back of a similar 45% revenue increase in the first quarter. Continued growth at that rate would lift RLX’s revenue to about 3.36 billion yuan this year. While that figure looks impressive, it’s still less than half of the 8.5 billion yuan the company recorded at its height in 2021, when vaping was all the rage and was largely unregulated in China, the company’s home market that accounted for all of its sales.