Taz, left, and Umer Sheikh
Like many inventions, the Gamucci electronic cigarette was born out of frustration. “The initial idea came about in 2006 when the smoking ban was announced,” recalls Umer Sheikh, who was at the time a heavy smoker.
“It was also around that time when one of the first electronic cigarettes was actually released in China. I came across that product, I tried it and it was a disappointment to say the least. It was a lightbulb moment. I thought ‘we could do better than this’.”
Despite a lack of experience, Umer and brother Taz set about creating Gamucci. Umer found engineers in China to work with on developing the product — eventually filing patents for part of the technology at the heart of the company’s e-cigarettes. If it sounds ambitious, it’s hardly surprising given the brothers’ background. The pair set up an IT consultancy and software development firm, R2 International, in Bangalore in 2005. The business is still running today. “It kind of acted as an incubator while we were in the building and setting-up process,” explains Taz. “It gave us a good platform to launch this business globally from day one.”
Now headquartered near Monument, Gamucci has offices in the US, India and China. The business was bootstrapped by Umer and Taz as they stumped up for initial production in China. The product, a faux cigarette that vaporises nicotine for inhalation, proved popular almost from the start.
“We exhibited at the Spring Fair in 2008 at the Birmingham NEC,” recalls Umer. “We were the talk of the show. After that, we really knew we were on to something.” Taz adds: “When we set up, we were one of only four brands. Between the four of us, we’ve helped spawn an industry.”
A distribution deal in the Middle East and another with casinos group Genting helped drive Gamucci’s early expansion. One of the biggest problems faced was keeping up with demand. “It was a case of really burning the candle at both ends to ensure we had enough stock to fulfil orders,” says Taz. By 2011, the company was able to build its own factory in Shenzhen, China, where it now employs more than 400 people. That’s the short version — in reality, things were more complicated. “This business has its ups and downs,” says Taz. “There’s a constant uncertainty surrounding the whole industry, whether it be regulation or taxes or bad publicity.”
The UK has decided that e-cigarettes will be regulated as medicine from 2016, while the products have recently hit the headlines amid accusations of being marketed to under-18s. Taz says: “We don’t sell or market them to anyone under the age of 18, and our target audience is adult smokers. We’re simply giving them an alternative way of getting their nicotine.”
The pair are in favour of regulation but worry the current framework could be too “heavy-handed”. But they say they are “well-placed” to adapt. Then there is the issue of health. Popular perception may be that e-cigarettes are healthier than regular smoking, and Umer says: “In comparison with tobacco, our products are far safer.” But Taz admits: “Currently there haven’t been any long-term studies done on electronic cigarettes to prove that there are any health risks. But there haven’t been any studies done to prove that there aren’t.”
Despite the uncertainties, the market is thriving, with an estimated 1.6 million e-cigarette users in the UK. Gamucci recently opened the world’s first vaping zone in Heathrow to let travellers puff on their e-cigs there. Gamucci products are sold in 66 countries, and the brand is WH Smith’s preferred e-cigarette. Annual revenues are on track to at least double to £10 million.
The Sheikh brothers are finalising a £20 million funding round, which will go towards promotion and expanding Gamucci’s distribution network. Taz thinks the next 18 months will be crucial for the fledging industry: “It’s going to be a little bit of a land grab.”
Gamucci clearly had its sights set on a sizable fiefdom.
Staff: UK 20, US 15, India 60, China 400
Business idol: Umer — Steve Jobs: “What Steve Jobs did for Apple is incredible. What he did with the iPod was make mp3s mainstream. It’s very similar to electronic cigarettes in a way, it’s disruptive technology.”