Regulation And E-Commerce Drive Adaptation

THE past month has provided PPM’s team members with a fascinating whirlwind tour of the way the Kenyan market has responded to the ban on the production and use of plastic carrier bags (read more on page 17), and how Indian packaging machinery suppliers are developing alternative technologies to meet the challenge of an impending ban on the production of nonrecyclable multilayer plastics, sheets and carrier bags.

These OEMs are also responding definitively to a global trend for flexible packaging converters
to switch from three-layer to five- or seven-layer blown film coextrusion to gain downgauging,
productivity and energy consumption benefits for further details, turn to page 40).

In addition, the first-ever glba (Global Local Branding Alliance) Consumer Insights & Packaging Trends Conference – hosted in Johannesburg by founding member Stratcom Branding – provided insights into China’s evolving retail landscape. It was astounding to earn how digital technology and apps such as WeChat – the equivalent of Facebook, WhatsApp, SnapChat, SnapScan, Google Search and Google Maps all rolled into one – are radically changing the lives of Chinese consumers, as well as the e-commerce and packaging landscape. These platforms are allowing brands to collect deep data about consumer spending patterns and adapt their business models according to these trends and preferences.

According to glba’s Shanghai-based partner, Tracy Huang Xihau, the world’s frontrunner in e-commerce, China, is setting the benchmark for present and future global retailing because it has successfully managed to merge a trusted digital payments infrastructure and innovative social commerce model with mobile-first consumer behaviour – providing consumers with an
easy, interactive and well-rounded shopping experience.

She noted that this is essential to secure brand loyalty because Chinese consumers are spoilt for choice. It’s also giving rise to a new trend known as ‘entertainmerce’, which merges e-commerce with entertainment. Tracy cited the example of Alibaba’s live-streaming of an eight-hour ‘see now, buy now’ fashion show on Tmall, enabling consumers to buy Chinese consumers, she told her audience, are generally enjoying a more playful marketing attitude and easily accepting new things and ideas. They also serve as important brand/product ambassadors by posting recommendations or reviews on social media, spreading the message quickly among their social groups and helping to drive sales.

The majority of China’s e-commerce transactions are made via mobile apps such as Alipay and WeChatPay. During their equivalent of Black Friday sales in 2017, 82% of Chinese shoppers made purchases via their smart phones compared to 36% of US shoppers.

How are brands and packaging designers reacting this evolving retail landscape?
Tracy reported that multinationals, such as Coca-Cola, Mondelez, Kinder Joy and Pepsi, are
trying many ways of competing with indigenous brands by introducing locally-relevant products, creative promotional packs, and expanding their sales channels.

Pepsi’s Challenge China, for instance, called on young entrepreneurs, designers, filmmakers and technologists to submit hand-crafted illustrations for a collectable can series. The project’s aim was to blend illustrative art within the context of packaging design and a visual identity system to connect with the youth market on an emotional level.

On the other hand, Chinese brands, especially beverage producers, are introducing packaging designs with a more international look and feel.

There is, however, an emphasis on carrying forward long-standing national cultural traditions in modern ways. A leading example is packaging loose leaf teas in vacuum-sealed pods – based on the coffee capsule principle – with this market segment already worth $100-million in 2017.

e-commerce developments are certainly worth watching in China and the other four BRICS countries, as consumers in this economic bloc are expected to account for 61% (1.35-billion) of the world’s online shoppers by 2022.

Ed’s note: glba is an alliance of seven global packaging and branding specialists hailing
from South Africa, Russia, China, Germany, Turkey, Brazil and the US.

Published in Packaging & Print Media
1 March 2018

Regulation and e-commerce drive adaptation

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