Luxury packaging firms see big opportunities in the domestic market

Many international luxury packaging companies are eyeing the China market as the country is fast turning into the world’s largest consumer of luxury goods.

Luxury packaging or specialty packaging helps make products look appealing and desirable, prompting consumers to spend more on such products.

This field has produced specialist firms that boast expertise in packaging a range of products – cosmetics, fragrances, tobacco, confectionery, premium alcoholic drinks, gourmet food and drinks, watches, and jewellery – to a nicety.

James Cropper Speciality Papers is one such firm. The United Kingdom-based paper processing company established its wholly owned subsidiary in Guangzhou in 2014, to tap into the Chinese packaging market, especially the high-end luxury packaging market.

Founded in 1845, James Cropper offers high-quality packaging paper to many luxury brands such as Burberry Group PLC and Alfred Dunhill. It entered China because of the growing market and huge growth potential.

To enable high-end positioning of luxury brands in the Chinese market, James Cropper offers personalized paper solutions. “Up to 50 percent of our products are exported to other countries and regions, mainly Europe and the United States, and China is our fastest-growing market,” said Christine Lu, general manager of James Cropper Asia.

Currently, it produces cardboards in 40,000 types of colors, from pure white to black. Every year, it launches a new color.

“Can you name 50 different colors? We can produce 50 different hues of black!” said Phil Wild, CEO of James Cropper.

He said: “Luxury packaging is one of the fastest-growing categories, and the business takes up 25 percent of our output value. Consumers buy luxuries not only for the products and services, it also shows their advocacy for brand and support for the product concept, and luxury packaging conveys the product concept to consumers the very first time.

“Consumers’ first impression of a product comes from the packaging material, its color, texture and design. Packaging is no longer independent of the product, it has become an important part of the product itself.”

Considering the huge market that is in China, the company is willing to cooperate with Chinese packaging companies and develop new businesses in China.

Kurz Group Inc, a Germany-based packaging firm, entered the China market in the 1980s. In September 2003, it established its first plant on the Chinese mainland. The same year, it opened two subsidiaries in Hong Kong and several sales offices in Beijing, Shanghai, Shenzhen in Guangdong province and Kunming in Yunnan province, all of which were turned into subsidiaries later.

Xu Jun, chief designer at Shanghai Jahwa United Co Ltd, a Chinese consumer goods firm, said: “International packaging enterprises are entering the Chinese market because of the huge market potential. Chinese consumers are one of the main driving forces of the luxury goods market, and they pay growing attention to packaging, as luxury packaging is a symbol of luxury. Packaging enterprises need to produce more attractive products to help luxury brands build brand image and increase their market share.”