Premium potential: Virospack targets China expansion as domestic industry goes upmarket

The veteran cosmetic dropper company began extending its presence in China in 2018. At the end of 2019, the company opened a dedicated office in Shanghai to further cement its commitment to the market.

“China is very new for us, but we see a lot of potential. Many of our products are already in the Chinese market through the big international companies but we want to work directly with Chinese brands because we see a lot of potential there,” ​said Felipe Rodríguez Caneiro, Asia Pacific area manager, Virospack.

More specifically, the firm sees plenty of opportunity in the premium beauty space, added Joanna Milne, account manager, Virospack.

“We know that prices of European-made products are much higher but today Chinese companies are willing to pay for the service and the high quality. We do see many such companies are willing to pay a premium to have their product made in Europe. There’s a market here for it definitely.”​

Caneiro has observed more local beauty brands aiming to position themselves in the premium category today.

“Before, local brands would position themselves in the low or middle market. Now the market in China is booming and many brands are looking at the more premium end of the market.”​

Milne estimated that Asia currently makes up six to seven per cent of Virospack’s business. “Which is very little, so there’s a lot of room to grow in this market.”​

“Mostly, we work with all the big international cosmetic companies, but the market is growing in China. We want to develop the Chinese market and to corporate directly with Chinese brands because we see their level is getting higher and they are growing really fast,” ​Caneiro added.

Premiumisation is only one of the signs that the market is maturing. Caneiro told us that more and more of the firm’s Chinese customers are beginning to consider issues like sustainability.

“Our customers do ask questions related to how we manage product and ask us for all the different kinds of certification. You can see that their mentality towards these things are changing.’​

He added: “The awareness is growing maybe because of the pollution. I think it all started there. Now the issue is becoming more important for Chinese consumers. You can see how the big groups are starting to pay attention to that. Maybe it's not as big in Europe or America but I can see that it is a trend here too.”​

Winning dropper​

At this year’s Cosmopack Asia Awards, Virospack scored a win for Secure Dropper, a cosmetic dropper with a child-resistant safety lock system.

Milne said: “It’s very hard to innovate on something like a dropper. We have to try and come up with new shapes, new ideas and if possible, new applications. We try to be ahead of the market.​

The dropper was designed for cosmetic that are formulated with ingredients, such as CBD, that may need to be packaged in accordance with stringent regulations.

“The idea came about three years ago from the US. A lot of the formulas nowadays in cosmetics are using ingredients that in this case, by FDA regulations, had to be childproof even though it's a cosmetics formula. So basically, if they didn't have a dispenser that was childproof, they couldn't launch it,” ​Milne explained.

While the firm does not see an urgent need for such a product in the Asia market at the moment, Milne believes there might be potential for it in Asia.

“In Asia, it could really depend on local legislation. I will say though, the more aggressive they get nowadays in terms of ingredients with cosmeceuticals, there might be potential in Asia for this.”​