The 39-year-old, who has worked for Procter & Gamble and Uber, is under imminent threat from Chinese regulators.
The market capitalization of RLX decreased by $16 billion as a result of a 54 percent decline in share price in late March. The slump continued as investors dumped their shares when the news that a crackdown from China’s tobacco regulators was revealed.
Getty Images/Stephanie Keith
In Xi’an, a city in central China well-known for its terracotta soldiers, Wang was born, raised, and attended college. After earning a degree in finance from Jiatong University in 2005, she accepted a management trainee position at Proctor & Gamble in the Chinese city of Guangzhou. Before relocating to Hong Kong, she worked there for three years as a project manager in the beauty and personal care division. She relocated to New York City in 2011 to attend Columbia for her MBA. She experienced an epiphany through living in a different society across the globe. Xi’an has a relatively languid pace; New York’s quick pace was motivating.
Wang worked in Bain & Company’s Beijing office for a year following graduate school. She later switched to Uber China, then Didi Chuxing, a Chinese ride-sharing company that merged with Uber China in 2016. She was given the responsibility of establishing Uber in Hangzhou, a metropolis of 10 million people that hadn’t previously used ride-sharing services.
Seizing an Opportunity
She resigned from Didi/Uber China and enlisted five of her coworkers to work for her new firm, which she launched in January 2018.
Kate used JD.com’s crowdfunding platform to raise money to launch the business. She raised $6 million in seed capital in June 2018, positioning the company as a tech startup.
Regulators… Mount Up
In October 2019, Chinese regulators started cracking down on e-cigarettes in an attempt to slow underage vaping. That immediately destroyed 20% of RLX’s revenue.
RLX unveiled its Shanghai flagship shop in January 2020. RLX now has more than 5,000 outlets across 250 Chinese cities. The company requires ID and put facial recognition in place to prevent minors from shopping for e-cigarettes in RLX stores. In China’s expanding e-cigarette sector, RLX still controls more than 60% of the market.
Wang now has to persuade her investors that the Chinese government won’t seize control of the e-cigarette market on its own. All tobacco products in China are sold through government-owned stores – much like trying to buy alcohol in Utah or Pennsylvania.
Although Wang is accustomed to handling challenging situations, she is unsure about how things would turn out. In the worst-case scenario, Wang would be forced to sell at a price set by China Tobacco (which would likely jeopardize most, if not all, of her profit) and be forced to de-list in the U.S.
However, for the time being, her company is flourishing, and she is raking in cash and expanding RLX while she still has the chance.
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