China: Entering a fast-reforming period

According to the data released by Zhongpu Industrial Research Institute, the total output value of China’s printing market in 2024 exceeded 1.43 trillion RMB (197 billion USD), ranking first globally, showing its strong growth potential. The Chinese label printing industry is one of the fastest-growing areas.

China’s label industry started in the late 1970s, later than in Western countries. Thanks to the continuous and stable growth of China’s national economy, the growth rate of China’s label market has stayed high, making it one of the fastest-growing markets in the world.

In the Asian label market, China’s market share reached more than 60 percent. After years of development, China has become the world’s largest label producer and consumer, accounting for about a quarter of global label consumption. In 2023, China’s label printing industry was about 51.12 billion RMB (7 billion USD), increasing by 5.1 percent.

“In post-COVID China, many label companies showed signs of optimism in the recovery of the market”

In China’s label market, self-adhesive and wet glue labels are the most prominent applications, while shrink sleeves, in-mold labels, and variable data labels have significant market share.

As the largest self-adhesive label market in the Asia-Pacific region, the demand in the Chinese market continues to grow. Statistics from the label Printing Branch of the Printing and Equipment Industry Association of China (PEIAC) show that from 2017 to 2023, China’s self-adhesive label production increased from 5.8 billion sqm to 9.98 billion sqm, with a CAGR of about 9.47 percent. This growth rate has slowed significantly compared to before the epidemic, as China’s label printing industry has entered a stable growth and development stage.

Competition

In post-COVID China, many label companies showed signs of optimism in the market’s recovery. They invested in faster and more automated production equipment, unleashing capacity that exceeded market demand and led to intense competition among label peers.

Additionally, there have been new entrants to the label space from brand owners or packaging companies, thereby diverting the existing label orders. For example, China’s listed package printing company ZRP announced its stake in AP Labels Guangzhou in May 2024.

According to incomplete statistics, the number of label converters in Chengdu and Chongqing has increased seven to 10 times compared with that 10 years ago. The reason is the reduction of the Chinese ‘qualification conditions for printing companies’, including the demand for the plant area, registered capital, and the number of printing equipment enterprises. Further, the reduced cost of printing equipment has lowered the threshold for entrants.

‘For brand owners, as consumption habits are more rational, their budgets in packaging are shrinking, and the corresponding share of labels is also decreasing, which inevitably makes the competition between printers intensified and profits reduced,’ says Shard Liu Jincheng, general manager of Megavision Design & Printing, a label converter in Chengdu, Sichuan Province.

This intense competition can also be linked to international companies leaving the Chinese market. In recent years, the outward migration of international foreign-funded enterprises in this area has become increasingly apparent, such as companies in food, clothing, footwear and wood industries, mainly moving to Southeast Asia, India and Mexico. Companies in pharmaceutical and chemical industries, machinery manufacturing and computer electronics are returning to the United States, Japan and other countries. In addition to the standard transfer caused by rising domestic labor costs, a large part of the reason is geopolitical factors.

So, how do we respond to the involution? Chai Zhengrong, operating director of Guangdong Doitpack, shares that ‘The core is to establish differentiated market competitiveness. Since its establishment in 2019, Doitpack has adhered to technology research to lead the market and win the recognition of customers. We have experienced rapid growth in the past five years. In October 2024, we invested in the first HP Indigo 200K in China, our third HP digital flexible packaging press.’

Another example is a label converter in Guangdong Province. Since its establishment, it has focused on anti-counterfeiting labels. It has grown from 30 employees in 2018 to more than 120, with a 20,000sqm workshop and 40 percent annual growth in the past five years.

Digital technology

What’s exciting is that driven by fierce competition, the reforming pace in China’s label printing industry is accelerating. The converters use automated and digital technologies to increase the added value of labels, reduce production costs and improve efficiency through equipment upgrading.

Shanda Print invested in three Durst Tau 510 RSCi label digital presses, planning to replace the existing offset printing machines; Zhengzhou Yanfeng installed HP Indigo 6K, which is its second digital press, combined with the existing Omet flexo presses, to forge a new flexo and digital production mode; Henan Aili installed HanLabel hybrid printing equipment.

Digital printing and post-press technology have become one of the mainstream trends in China’s label printing industry.

What’s more, restructuring the global industrial chain has also driven the tide of Chinese enterprises going global. At Labelexpo Americas 2024, there were 92 Chinese exhibitors. Printing companies are also gradually laying out their overseas markets, such as ZRP, which established its first overseas production base in Vietnam in September 2024; label converter Heyuan Boyue has more than 90 percent overseas business. There are also converters establishing global trade platforms this year.

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