China Gift Market: A Promising Sector for Foreign Companies
As the Chinese gift market continues to grow, foreign companies are starting to see opportunities in this sector. Gifts are a big part of Chinese culture, and with the increase in wealth among China’s middle class, demand for high-quality gifts is expected to continue rising. Foreign companies that can tap into this market stand to enjoy significant success. In this post, we are looking at some interesting figures and trends of the china gift market as well as a few tips to leverage the Chinese online channels so you can start selling and promoting your gifts on the mainland!
China Gift Culture
Gift Giving has always been an important concept in China. It is a custom that locals practice during special events, festivals, or in their everyday life. It is also used in business; wherein most Chinese business partners exchange presents as a token of appreciation for taking the time to meet each other. It also serves as a symbol of trust and the intention of building a good professional relationship. In their culture, the Chinese love giving gifts as much as they love receiving them.
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There is a tradition called “Li Shang Wang Li” which translates to “courtesy demands reciprocity”. Once an individual presents someone with a gift, they are expected to return the favor, whether it is as soon as possible or at a later date. To honor the value of reciprocity, the receiver of the gift must offer a present of their own with similar value. This serves as a sign of respect for both the long-running tradition and the relationship they have with one another.
The China gift market in data
The China Gift Market has become one of the biggest and best-selling industries to date. The knowledge of its success has crossed borders, emerging globally as the largest producer of gifts and other giveaway items. At the time of writing this, China is reported to have over 10,000 gift manufacturers and 100,000 gift corporations. China’s gift market reached a whopping average of USD 139.6 billion and has been rapidly growing ever since.
The China Gift Market offers a wide range of options for consumers to choose from. From luxury clothing to stationery items, kitchenware, artwork, and many more. The integration of technology in our daily lives has also introduced a new wave of possibilities, contributing greatly to China’s online market with products like gift vouchers, e-certificates, and the like.
The Gift Cards Segment:
The China Gift Market evolves and changes as time passes. As innovative products begin to enter the market, consumers have gradually adapted to giving high-class gifts to their loved ones and business partners. They have learned to consider several factors in their purchase such as the quality of the said gift, its alignment to the receiver’s liking and preference, and the product’s timeliness in terms of trends and modern style. The advancement in the gifts being produced and the consumers’ taste are the leading reasons why the China Gift Market is thriving today.
As technology and the internet become rampant in our society, many Chinese locals have turned to online platforms and virtual purchases for their gift-giving needs. E-certificates and gift cards are one of the top gift choices in the online China Gift Market. With its current success, the China Gift Card Market is predicted to reach a CAGR of 6.8% from 2019 to 2023, with a total of USD 151,232.5 million by the end of the forecasted period.
Entering the China Gift Market
China’s esteemed accomplishments in the gift and giveaway industry have prompted a global interest for foreign companies to enter its local market. The numbers alone express the potential opportunities we could obtain by tapping into this lucrative market. With strategic planning, we can expand our reach into the China Gift Market and achieve new heights with our products.
Localization – Catering to the Local Audience
The key to entering the Chinese market and building a solid reputation lies in aligning to the consumer’s preferences. As foreign companies, we must adapt to the locals’ wants and needs to capture their attention. This is essentially taking your products and making certain tweaks and adjustments to their properties to appeal to the local audience. Brands and companies often participate in this tactic by utilizing seasonal events and trends to their advantage.
One example of this is how the prestigious fashion brand ‘Gucci’ released a brand-new line of items called the “Apple of my Eye” in honor of the Qixi festival. The collection’s release was accompanied by a story-based promotional trailer about teen love, for which Gucci received overwhelming amounts of traction and praise for its brand.
Another example with a smaller band would be Ventuno. Ventuno is an Italian food brand that sells gift baskets of luxury Italian goods. The picture below shows you a Chinese new post on WeChat.
Utilizing Online Platforms
E-Commerce, like the China Gift Market, has developed into one of the top-selling industries today. Consumers are enamored with the convenience and vast range of options that online selling platforms have to offer. It has become one of the most accessible forms of consumption as consumers can purchase their goods within a few taps on their smartphones.
China’s e-commerce market is worth more than America’s and Europe’s combined, amounting to a total of more than USD 2 trillion. Many brands and companies have adapted to a virtual approach to promoting their goods and services. Online shopping platforms such as Alibaba offer innovative items and an easy-access digital payment scheme. Companies have taken to social media to market their products. This includes TikTok, a Chinese video streaming application that has generated a total of USD 4.6 billion in revenue and 1.2 billion active monthly users by the end of 2021.
Challenges Foreign Companies May Encounter
Entering a foreign market is considered a huge risk for companies, especially if the market is as competitive as China’s. The China Gift Market is an undeniably large entity that many companies aim to partake in. Rising to the top and meeting the local audience’s expectations will be a great challenge for us, but certain solutions have made it possible to overcome it.
Joining a foreign market means that we will have to comply with the industry and government’s standards. China enforces strict regulations and laws over all of its products, especially foreign goods and services. Restrictions and standards like this can be difficult to adjust to in the beginning, as foreign companies are not used to such methods of monitoring in their local markets. To stay clear of any legal issues, companies must consistently remain updated with the Chinese government’s terms.
Preferences of the Local Audience
Locals have certain standards that foreign companies must adjust to. Social status is highly important in China. This is why many consumers opt for high-class and luxury brands, as it boosts their social status and upholds their current place in life. Most consumers are willing to spend extensive amounts of money as long as they are paying for premium products and getting top-quality and name-brand goods that they are expecting.
On the contrary, they are also very sensitive when it comes to price. If they are not purchasing luxury items, they will often go for the cheapest option. This is a challenge that many companies in the industry struggle to overcome. Companies participate in price wars by lowering the products of their goods and/or services to match their competitors. As foreign countries partake in the China Gift Marker, we must strive for the ideal balance between price and brand reputation.
Intellectual Property Issues
This is a leading issue in China to this day. Foreign companies consider Intellectual Property Issues as one of the biggest risks in joining the China Gift Market or the China Market in general, as they want to avoid their unique products from being replicated and sold at a lower price. Despite this, China is continuously addressing the situation to resolve it. Due to their efforts, China has ranked 27th out of 45 countries in terms of having strong IP Systems to protect companies’ data and property.
Want to start selling gifts in China?
Contact us, we have experience helping companies sell gifts in China: from bitcoin gift cards, gift certificates, and goodies, to luxury & premium gifts.