Online e-cigarette sales looked like a promising industry for Edwin Wong when he started his venture a year ago. The 34-year-old had studied Shenzhen’s businesses and products since 2012, and saw a sure bet. Soon, he had developed a loyal base of more than 600 repeat customers and business was steady.

But suddenly, everything changed. Overnight his 2.2m yuan (£240,000) investment in a startup, called KiwiPod, disappeared.

“A lot of people have gone into this business who never knew anything about the business before, they just threw money into it. [...]