Chinese "e-cigarette" helps you stub out the habit

Scott Fraser, vice president of SBT (holdings) Co Ltd., demonstrates an 'e-cigarette', which activates light and vapour, in Hong Kong May 9, 2007.

HONG KONG (Reuters Life!) - It feels like a cigarette, looks like a cigarette but it isn't bad for your health.

A Chinese company marketing the world's first "electronic" cigarette hopes to double sales this year as it expands overseas and as some of China's legions of smokers try to quit.

Golden Dragon Group Ltd's Ruyan cigarettes are battery-powered, cigarette-shaped devices that deliver nicotine to inhalers in a bid to emulate actual smoking.

"The nicotine is delivered to the lungs within 7 to 10 seconds," said Scott Fraser, Vice President of SBT Co. Ltd., the Beijing-based firm that first developed the electronic cigarette technology in 2003 and which is now controlled by Golden Dragon.

"It feels like a cigarette, looks like a cigarette, it even emits vapor. In many ways, it is like an actual smoking experience, and that's what makes us different," he told Reuters.

The cigarettes sell for around 1,600 yuan ($208) apiece and are already available in China, Israel, Turkey, and a number of European countries, but not yet the United States.

Golden Dragon's competitors include global giants Pfizer and Novartis AG, which sell more familiar nicotine replacement products such as chewing gum, patches, and inhalers.

But Golden Dragon's financial results show it might be onto a good thing. Sales more than doubled to HK$286.1 million in 2006, after surging more than ten-fold to HK$135.6 million in 2005, a year after the technology was perfected.

China -- home to 400 million smokers and a roughly $160 billion dollar tobacco industry -- accounts for 65 percent of Ruyan sales. The firm estimates around 10 percent of China's smokers are attempting to quit, and averaging a 2 percent success rate.

($US1=HK$7.8)