Chinese retail Westernisation requires a change in packaging thinking
In recent years, China has seen significant changes in eating habits, shopping behaviours, and lifestyle habits, as consumer behaviour responds to Western influences. As the Westernisation of the retail market is fairly new, products that are considered to be mid-range are more likely to be offered as premium products in China.
These commodities also serve as symbols of modernisation and provide a sense of elevated status for consumers. As a result, Western product brands such as fragrances, chocolates, coffee, cheese, ice cream and carbonated soft drinks are becoming prevalent in Chinese retail markets, Canadean says.
A typical Chinese supermarket in a developed urban area will stock more varied products in comparison to an equivalent US or Japanese store, thus increasing the choice available and offering more opportunities to choose Western products. This is an important trend for packaging companies. Also, domestic companies need to match the standards of Western packaging so they stand out against their counterparts.
According to Catherine O’Connor, senior analyst at Canadean: “Despite China’s growing interest in Western brands, foreign offerings do not always find it easy to integrate into the Chinese retail market. Earlier this year, Revlon and L’Oréal both pulled back from China, misunderstanding the needs of this lucrative market.”
According to O’Connor, consumer packaged goods providers will attract more custom by localising products to Chinese tastes. For example, KFC has introduced a range of breakfast soups, while Oreos are altered in China to have flavours such as green tea as consumers found the originals too sweet.
As well as reformulating products, companies need to modify their packaging to make them more tempting to Chinese tastes at the shelf edge.
“In particular, the use of colours is of paramount importance for the Chinese,” said O’Connor. “Yellow is seen as royal colour and red is chosen for good luck and happiness. However, these bright colours are mostly preferred for food products, while pastel or white shades are preferred for household and personal care products.”