The design of cosmetics packaging is the product’s first face and is important than ever in today’s battle for brand leadership in China. But China’s massive market opportunity has also attracted equally strong levels of competition – both from domestic players as well as international packaging peers. So, are global packaging materials players securing and growing their footholds in this large, fast-moving market?
Baralan is one international player that has carved out an early piece of this market, and the companies China sales manager, Mr. Tong, shares some of the important lessons learned along the way. Founded in Milan in 2962, Baralan entered the US market with the establishment of Baralan USA (Arrowpak) in late 2011. After this major international push, the company quickly decided to establish a Shanghai-based subsidiary, opening the door for Italian-made glass bottles.
Baralan’s Entry Strategy: Integrating International Resources For a Full Range of Materials
From its earliest Italian roots, Baralan has been committed to providing professional, top-quality, end-to-end packaging material services to the cosmetics industry. To do this, Baralan also operates Gloss Tech and INOVO design subsidiaries in Italy that provide glass surface finishing, bottle design, and custom development. It also has divisions that specialize in lids, pumps and plastic line production.
Baralan’s Italian headquarters partners closely with leading brands such as Chanel and Dior. When it entered China, Baralan focused on skincare and color cosmetic segments, working with Intercos, Afu Essential Oil, Chilitina, and other new, emerging domestic brands as its primary targets. This starting point coupled with its world-class design, R&D capabilities, and efficient production facilities across Europe and India, Baralan sees strong prospects in China.
Anchored by Quality, Baralan Uses a “Bottle” Focused Strategy
For more than half a century, Baralan has built a reputation for quality glass packaging materials across the beauty industry. It’s “bottle” is the core of its competitiveness and brand. Here, the company’s strategy has focused on finding and managing the best OEM partners for production while it maintains tight control of form, design and development, and mold creation. According to Baralan’s Shanghai-based sales manager, Tong, “Quality is key to survival in this market. So, we choose our partners carefully. Our primary concern is their ability to control the production process and create a quality product. Second, we look for their commitment to improving production technology. In addition, in order to assure quality, Baralan sends professional QC teams to its partner factories, monitoring quality standards across entire production orders. Mr. Tong added that currently most of Baralan’s bottle production is concentrated in Italy and India.
Baralan’s Edge Against China’s “Big Fish”?
Baralan’s Tong reiterated the importance of quality in maintaining a competitive edge of Chinese competitors. “The process control requirements for making top quality glass bottles are very high. Compared to our local competitors, our quality is stable and very competitive in international markets.” For certain bottle types such as perfume bottles or nail polish bottles, the finishing work often just limited to a logo, so the bottle material requirements, including color, texture, and permability are very high and vital for the brand’s image. Baralan carefully selects its soda ash, quartz, and other glass raw materials to assure purity and maintain its strict quality standards.
In addition, Tong also noted that Chinese brands and consumers are looking for innovations such as eye-catching bottle types. Here, Baralan’s Italian design subsidiary, INOVO, produces a steady stream of new designs and bottle types each year. Baralan headquarters circulates new bottle concepts to its global branches and partners, incorporates their feedback and integrates into new product development.
Balaran has also gained an edge over domestic competitors with its ability to accommodate smaller orders. Domestic glass packaging suppliers often require minimum order quantities of 3 to 5 million units and delivery time will depend on plant schedules. But, Balaran’s sales manager, Tong, indicated that the company can deliver single-batch quantities. For smaller bottles such as 30 ml sizes, this can mean a quantity of 5,000 of 6,000 and for larger bottles such as 100 ml, this can be as small as 2,000 units. This gives Balaran a major advantage in serving small brands and new accounts.
How Do You Compete Against Price, Delivery Time, and Fakes?
Balaran uses a highly sophisticated quotation system that incorporates bottle type, quantity, and other variables to generate price quotations from its Shanghai warehouse, eliminating human variables in the pricing process. Similarly, rising Chinese labor and manufacturing costs have narrowed the gap between imported and domestic product prices.
Although the 6 to 8 week shipping time from Europe to China might ordinarily create a disadvantage for Balaran, the company maintains a large Shanghai warehouse that stocks standard bottle type inventory. Balaran also will provide customers with locally-stocked inventory in advance of their orders. Both of these partnering strategies enable Balaran to maintain very competitive delivery schedules and, in some cases, even achieve just-in-time delivery.
In addition, Balaran provides “door-to-door” service for the conveniences of domestic customers. It also has added a domestic spraying plant to provide “one-stop” processing for imported materials.
To battle fake and knock-off products, Balaran focuses on designing new bottles and customization. The growth of niche products and specialized brand requirements also drives demand for customized packaging solutions. Balaran’s Tong note that the company’s extensive experience in product customization has given it a significant advantage in working with clients to jointly create unique products.
Newcomers Need to Promote Themselves
Although well-known internationally, Balaran had little market awareness when it entered China in 2011. So, the company seized the opportunity to promote itself through multiple channels, and it currently uses a range of media channels and influential exhibitions to increase its visibility. From their first entry into China, Balaran has participated in the China Beauty Expo. Balaran’s sales manager, Tong, noted that they’ve had very successful experiences at their previous China Beauty Expos, and customers have found that the Balaran booth provides a fruitful source of valuable trend information and insight on glass packaging materials.