Packaging for Chinese Customers

Three key considerations to keep in mind when selling to this powerful new customer segment.


The emergence of Mainland China’s rampant consumerism in recent years has captivated the imaginations—and budgets—of the world’s prestige brands. The market drives global growth for the cosmetics and beauty brands that have made serious efforts to understand and seduce Chinese customers. LVMH’s Benefit Cosmetics, L’Oréal’s Kiehl’s and Estée Lauder’s La Mer are notable recent success stories, and mass-market brands from P&G and Unilever have dominated for years.

Growth is driven not just by sales within Mainland China, but also by the recent ascension of Chinese tourism around the world, with the number of outbound Chinese travelers increasing by 70% in the first six months of 2012, according to Xinhua. China’s 1.1 million visitors to the United States in 2011 spent $5.7 billion, up from $1.1 billion in 2004. The overwhelming majority of these visitors returns to China with gifts, and most include beauty products in their purchases.

Beauty was among the first industries to benefit from the emergence of the Chinese consumer, and the prospects for continued growth are bright. However, Chinese consumers have unique preferences and purchase drivers, which are important to understand when selling to this powerful new customer segment.

First, Chinese women are far more concerned with skin care and maintenance than with cover and color. Chinese customers are still largely in the learning and experimentation phase of consumption of beauty products, and are interested to experience the entire range of beauty products and learn how to use them effectively. The result is that Chinese customers, similar to Korean or Japanese consumers, over-index in complete daily skin-care regimens that are designed for Asian skin types and focused on youthfulness. While most beauty companies do not typically package core products in this way, there is potential to create unique offerings or merchandising systems that highlight the entire skin care process. Chinese consumers also enjoy promotions, so creating ways for customers to buy an entire regimen and receive a special gift is a great way to raise the average ticket, while also providing unique branding and packaging opportunities.

Second, interest in natural products and packaging is spiking in China, particularly those with “scientific” backing. Chinese consumers are beginning to seek out natural products, and brands such as local favorite Herborist, or La Mer and Origins are reaping the benefits of this trend. Concerns over product safety and interminable scandals from tainted food to environmental hazards bolster this preference. Natural packaging is a great way to convey the natural message and also makes for attractive and trendy gifts among affluent customers.

Finally, gifting continues to dominate purchases in cosmetics and fragrances. According to Bain Consulting, 25% of China’s luxury purchases are for gifting. This number increases when looking at luxury purchases made by Chinese consumers traveling abroad.

According to China Luxury Advisors’ research among high net-worth Chinese travelers, two of the top three categories for luxury purchases made overseas are perfume and cosmetics. The three most popular purchase drivers for Chinese customers purchasing gifts overseas are: 1) popularity of brand in China; 2) products not available in China; and 3) product quality.

The Holy Grail for gifting perfume and cosmetics among Chinese tourists is to find a limited edition, location-specific, high-quality product from a brand that is hot in China. For example, a “Rodeo Drive” Chanel fragrance with a unique package would be a top seller in the Southern California or Nevada locations among Chinese consumers. Price-sensitivity is minimal in such categories, because a Chinese traveler’s return-on-investment in “face” when giving a unique gift is essentially incalculable.

Packaging is a key differentiator among Chinese consumers, but the devil is in the details. While the specific packaging type varies by brand, price point, target customer and product, some basic rules of thumb apply to all packaging. For instance, bright colors and metallics tend to sell best in China, while white and black both have funereal associations. The number eight is lucky in most regions in China—symbolizing wealth and fortune—while the number four is linguistically linked with death. And as with all travel-focused packaging, remember that gifts are hand-carried back to the far corners of China, and typically re-gifted multiple times, so portability and durability are nearly as important as sexiness.

About the author
Renee Hartmann is a co-founder of China Luxury Advisors, a boutique consultancy advising brands and retailers on serving Chinese consumers. www.chinaluxuryadvisors.com