Chinese cosmetic and personal care companies are seizing new opportunities in toothpaste production

The Chinese toothpaste market has long been dominated by a mixture of global and local brands – but until recently, regulations prevented new players from entering the market. That all changed this year, when the Chinese government lifted the ban on issuing new production licenses: while this was seen as a way for the government to adjust the market and industry, for those already there it means more – and stiffer – competition.

There are around 90 companies with toothpaste production lines operating in China today.  They serve a market that requires around 6 billion tubes of toothpaste annually, although their combined market production capacity is about 8 billion. The market is growing slightly– about 7-9% annually. 

With the newly reformed policies around toothpaste production and somewhat sluggish growth, new players will be entering an already saturated market, with consequent huge impact. which will have a huge impact. Both international heavyweights and local players will be facing serious competition as they fight for increasingly small slices of the market. In order to stay relevant, they will have to come up with new ways to attract customers.

The need for differentiation

Functional toothpaste – your average white paste or gel – is losing market share, while at the same time specialized toothpastes are gaining traction. These specialized toothpastes use, among other things, taste, smell, and unique packaging to not only retain their market share but to grab a bigger piece of the pie. The market is responding to, and anyone playing in this space needs to be ready to address it.  

The market does not respond to the smell and taste of traditional toothpaste, and some of the new players – particularly local ones – are coming from the cosmetics industry. This is driving a number of new ideas, many of which rely on special packaging features to achieve their sales goals. 

For example, toothpaste tubes have traditionally used aluminum laminate – foil between the product and the plastic tube.  With the focus now on taste and smell new tubes are needed to allow the scent of the toothpaste to be released through the packaging before the tube is opened. In other words, when the tubes are handled, the scent of the toothpaste is released, the tubes are made of plastic laminate, and when they are touched the scent of the toothpaste inside is released, allowing the customer to decide if they like the scent before they open it. 
 

E-commerce: big trends, small batches

E-commerce is one of the fastest growing marketplaces in the Chinese toothpaste market, and this is where a lot of trends emerge. Smaller players use e-commerce to attract customers, with small batches that offer unique tube and carton design capable of hitting the market quite fast. 

In order to meet these new demands, producers need flexible machines that offer fast changeovers, both for tube filling and cartoning. Flexibility is of essence for those smaller players which may have just one or two machines to meet a lot of different demands when it comes to design and packaging format. To stay competitive, they’re going to need a machine that also offers fast changeover, in order to meet these small batch requirements quickly and efficiently.

Norden has what it takes

In the Chinese toothpaste market, International companies, such as Unilever and Colgate, have about a 37% market share, while local companies have about 48%. The other 15% is made up of joint ventures – local companies that have paired with international companies. The top ten companies have 80% of the market – but that will change as the market does. 

So, as the market continues to fragment and diversify – and as more big local players gain ground – the need for flexible tube filling and cartoning machines will grow. Fast changeovers and a machine that is built to address different market trends when it comes to packaging and design will become increasingly important. 

Norden Machinery’s range of flexible tube loading, filling, cartoning and tray packing machines is designed to handle everything the Chinese market requires, from the tiniest, most unique tubes with a limited run, to large batches for the masses.