China, like much of East Asia, has long been an elusive market for producers of kitchen towel rolls. However, recent trends indicate that this may not be the case for much longer. Developments in Chinese tissue consumption suggest that the market for towel is posed to break wide open. With in-depth consumer research, suitable technology, and an experienced and capable partner, the right kind of kitchen towel could be a golden opportunity for tissue producers bold enough to take the first step.
The Chinese tissue market has grown rapidly in the last two decades and shows no signs of slowing down. The country saw 8.3% annual growth in tissue consumption between 2006 and 2016, driven by overall national economic growth, rapid urbanization, and infrastructure and retail advancements. Although per capita consumption remains comparatively low, China’s 1.3 billion population already accounts for 21% of tissue purchases worldwide – a figure that is sure to increase with current upward trends.
The diversity of products consumed in China has also expanded within a relatively short span of time. In the 1990s, toilet tissue represented around 95% of the Chinese market. That share shrunk to 57.3% by 2015, with the facial/hankies category accounting for 33.5% of national consumption. Today, as in many other parts of Asia, facial products, and especially soft packs, have become the standard “all-purpose” tissue product in homes and offices.
The expansion of new capacity has meant that competition in the Chinese tissue market has become increasingly fierce. On the other hand, because most of the current tissue products available in China are very similar in terms of product quality, that competition has so far focused primarily on cost-point and marketing. There is therefore a potential gap in the market for high-end tissue products that offer greater water absorption and bulk, such as towel manufactured with TAD (through-air-drying) machines.
Kitchen towel represented just 4.6% of overall Chinese tissue consumption in a recent study. However, use of towel has been especially pronounced in the country’s most affluent regions, reflecting the pattern of adoption previously seen with other types of tissue products in China. High hygiene standards in urban areas, which drove the rapid growth of the facial category, may lead a growing number of consumers to choose kitchen towel as a more sanitary alternative to dishrags and sponges. Here it is worth noting that the average disposable income of urban residents in China today is similar to that of Americans in the 1970s, when TAD towel first began to gain a larger market share.
These trends point to huge possibilities for a high-end towel product specifically developed to meet the needs of Chinese consumers. In fact, experts have suggested that the demand for such a towel concept would quickly exceed production capabilities upon its introduction.
Leading the way on towel in China could mean big opportunities, but it also presents big challenges. Like other East Asian countries, including the more advanced market of Japan, Chinese shoppers have so far expressed little interest in the types of towels popular in North America and Western Europe.
Paper manufacturers must gain a better understanding of how different segments of the massive Chinese population could use towel and develop a product that fits the region’s specific consumer demands. Where would towel most likely be used? How do surfaces in Chinese kitchens compare to their western counterparts? How do Chinese households and businesses handle spills? These questions are vital to understanding the required properties for such a product, but answering them will entail time-consuming, in-depth research and potentially costly trial and error.
One thing that will be particularly important to determine is why Chinese consumers have turned to facial tissues as their go-to “all purpose” product. For many, the appeal may come down to saving space and ease of utilization. For these reasons, the ideal towel product for China might be very different than in other countries. A manufacturer, for example, may considered packaging TAD towel as a soft pack, rather than in the roll more commonly found in the west.
A further consideration is the machine required to develop, and subsequently produce, a quality towel product capable of breaking open the market. Obtaining the highest levels of absorbency for a premium towel product requires TAD technology. TAD towels are easier to un-clump if wetted before wiping a spill, and they are strong enough to offer potential for re-use – two properties that may be vital for Chinese consumers.
However, large-scale TAD machines are expensive to purchase, install and run. This could be especially tricky in a market like China, where operational costs like labor are low, but energy costs can be very high. The operation of TAD machines is also more demanding and complicated than other types of tissue production technology, which can be a challenge for mills with inexperienced personnel. In short, investing in TAD can be a scary step for businesses experimenting with kitchen towel in an untested market.
Collaborating with an experienced tissue machine supplier is a smart way to help mitigate the potential risks of testing a new product in a developing market like China. The right partner can provide efficient, reliable solutions for overcoming many of the challenges outlined above.
Ideally, a manufacturer should choose a supplier with decades of experience and innovation in TAD design. Such a supplier will have a better understanding of newer generation TAD technology, which can offer lower short-term and long-term operational costs thanks to increased output, higher energy efficiency, and improved fiber utilization. For example, a newer, full-steam concept TAD could be an attractive solution for reducing energy costs while still producing high-end products. These machines have also been specifically designed to deliver top quality with greater ease of operations, meaning that previous TAD experience is not a prerequisite for producing a premium product.
A more experienced supplier can also provide the level of support needed for creating a new product for a new market. Pilot capabilities for testing production with experimental chemicals, fibers, or methods, as well as a long record of development projects in a wide range of markets, can be a big advantage to manufacturers looking to find the best solution for their own facilities. Ideally, the supplier should be able to fully customize a TAD line to meet the unique demands of the Chinese market, especially with regard to fabric, chemical and fiber selection and machine configuration.
Furthermore, a supplier with a more comprehensive technology offering, including hybrid tissue machines, can provide alternatives and expertise for mills that may be interested in adding kitchen towel to their offering, but who are not quite ready to commit to a TAD machine.
Conventional wisdom has long held that high-end paper towel will find little success in East Asian nations. However, recent data demonstrates that new tissue products can quickly penetrate the Chinese market – so long as those products have properties that meet the specific needs of the nation’s consumers. Discovering the right towel product for China will not be an easy task, but it can be made much simpler through collaboration with an experienced partner, like Valmet, who can provide access to the necessary technology and expertise. For the mill brave enough to be first, kitchen towel will truly represent an opportunity to clean up in China.
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Article publisher:Kai Zhang
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Article type: Tissue in focus
Industry level: Introductory
Est. read time: 6 minutes
Summary: This article presents the possibilities for kitchen towel manufacturers in the burgeoning Chinese market.