From export to local consumption

It was also quite fascinating for me to see that at Labelexpo Asia, there are many letterpress manufacturers. And they are quite busy. There are flexo and intermittent presses running at the show too which are generating a lot of interest and enquiries. Raw material suppliers are present in a big number. Cosmo Films, a packaging and laminating solutions provider from India is also exhibiting at the show and was successful in closing a good deal at the show floor. Indian visitors can be seen in good number interacting with various exhibitors. UPM Raflatac, for its Indian customers, organized a plant visit to its plant in China.

Another trend noticed here and rightly pointed out by industry professional is the growing local consumers’ market. China has been big on export but it is now heading towards striking a balance and focusing on local consumption. On Singles day celebrated on 11 November in the country, different websites offer huge discounts for 24 hours. According to a presentation by Jukka-Pekka Haapanen of UPM Raflatac, Taobao (Alibaba) website in the country witnessed sales of RMB 35 billion in one day which translates to approximately RMB 24 per minute. Of this, RMB 5.35 billion was generated from mobile devices. The website was visited by total 400 million visitors on one day which is 68 percent of China’s population. 127 million people logged in using their mobile devices and 17 million people were online at the same time. According to Avery Dennison, China has world’s largest online population with almost 130 million broadband accounts. Online retail in the country is expected to generate US $50 billion annually by 2020 which implies more logistics label for shipping of products. This is expected to benefit the well known and trusted brands more. According to UPM Raflatac, this trend will result in premiumization and demand for high-end labels to improve branding and increasing product safety concerns will add demands for labels, especially in pharmaceuticals and food. In his speech, Haapanen pointed out that if the current forecasted growth rates persist, China market size is expected to reach the North American market size by 2025.

With such forecasts, growing GDP, rising number of press installations and increasing interest of international companies, China is expected to have a stronger foothold in labels industry.