Voluntary Report - Public distribution

**Date:** 1/16/2008

**GAIN Report Number:** CH8402

CH8402

**China, Peoples Republic of**

**Market Development Reports**

**Gift Giving in China**

**2008**

**Approved by:**

![](media/image1.wmf)LaVerne E. Brabant

ATOBEIJING

**Prepared by:**

Wang Tong

**Report Highlights:**

With a history dating back more than 5,000 years, China has a highly
ritualized gift-giving custom steeped in traditional values, and
practices. However, with an ever expanding economy and growing number of
citizens joining the ranks of the middle and upper income classes,
Chinese consumers increasingly seek high-quality and safe imports to
satisfy their gift-giving needs. In particular, the newly affluent has
developed a taste for imported food products ranging from wine to fruit
to nuts. Thanks to a reputation for high quality, US imports continue to
fare well in the current market although European, Korea, and other
product suppliers are making inroads. Significant opportunities exist in
the China market for U.S. food and beverage suppliers willing to
investigate the market and research local cultural and gift-giving
traditions that may fit into a longer term successful market development
effort.

Includes PSD Changes: No

Includes Trade Matrix: No

Trade Report

Beijing ATO \[CH4\]

\[CH\]

**Gift-giving in China: Tradition and the Modern Consumer**

![](media/image2.jpeg){width="1.6388888888888888in"
height="1.875in"}Unlike many Western cultures, where gift-giving is
largely unstructured, gift-giving in China can be a highly regimented
and complex process. Gift-giving traditions, passed down through the
centuries have defined the gift-giving culture in China today. Friends,
family, and business contact gift-giving is an important custom used to
maintain and establish important relationships, express concern for one
another as well show respect. The time honored Chinese saying, "courtesy
demands reciprocity" appropriately describes the attitude toward giving
and receiving gifts. While tradition still dictates gift-giving during
specific holidays, some of these the more traditional rules have been
relaxed or in essence rewritten for some new to China holidays and
occasions as a result of consumer exposure to international influences,
etc.

Traditionally, the most common gift in China has been food. However,
this is changing, and today, with rising disposable incomes gifts may
now include cash, coupons, flowers, and jewelry among other items.
Increasingly, the type of gift largely depends upon the occasion and the
personal preferences of the intended recipients. Regional customs and
tastes also influence significantly the gift-giving culture.

A recent market survey conducted in Beijing indicates the most widely
desired gifts in China's Capital are cash, travel, and gym memberships.
Most of the participants in the survey also stated that the giving of
gifts to their parents during traditional festival periods was an
important way for them to express parental respect and filial piety, two
highly important values in Chinese culture. After parents, the
participants surveyed ranked loved ones and bosses respectively as the
second and third most important groups to give gifts to, ranking these
two groups as slightly more important than both friends and relatives.

**Chinese Consumers**

The Chinese economy is on the rise, and continues to develop at a rapid
pace with average GDP growth rates around 10 9.5 percent over the last
five years with estimated per capita GDP in excess of \$2,062 in 2007.
The number of millionaire households also continues to climb, and
reached some 310,000 by the end of 2006 according to conservative
estimates. The increasing affluence of China's high-end consumers has
stimulated demand for high-quality luxury goods, a trend that has
impacted the gift-giving market. The data shows China has already become
the third largest luxury goods market in the world behind only Japan and
the United States, with 3% of the world's total. Incomes have also
increased among China's lower-income consumers, even in rural areas. For
example, in 2006 rural farmers spent an average of \$358 per capita on
household expenditures, and averaging an 8% increase annually since
2002. As incomes all across China continue to rise, more consumers are
willing and able to spend more of their incomes on higher-quality and
fancier gifts, including imported food and agricultural product items.

According to China's National Bureau of Statistics, total consumer goods
retail sales reached \$42.5 billion in October 2007 in the municipality
of Shanghai alone increasing by 15.2 percent over the previous year. A
large portion of the jump in October retail sales was attributed to
strong retail sales during *Shi Yi (National Day Holidays)* which occurs
during the first week in October which reportedly reached US \$680
million.

While millions of Chinese enjoy a financially stable lifestyle thanks to
the rapid growth in the economy, a recent survey reveals that many are
reluctant to spend more than \$13-\$65 on a single gift purchase. Only 6
% of survey respondents indicated they would be interested in purchasing
gifts costing more than \$650.

**China's Gift Market: Opportunities for US Imports**

*Chocolate: Sweet Gifts for Sweethearts*

![](media/image3.jpeg){width="1.875in" height="1.4083333333333334in"}The
high-season for chocolate as gifts takes place during the winter from
approximately Christmas through Valentine's Day, with sales during this
period equaling up to half the year's total sales. High-quality
chocolate, especially from Europe continues to gain in popularity in the
Chinese market. As is the case with fresh fruit, high-end chocolate
sales prevail in spite of high-price, and quantity is not nearly as
important as quality. Imported European products have made greater
headway in the China market than US products, as these products are
perceived as less sweet than our varieties, and are available in
smaller, more attractive packaging.

Local traders involved in the candy market here are seeking new
opportunities for positioning chocolate and other candies in order to
boost off-season sales. Recently, in some of China's larger urban
centers, including Beijing and Shanghai, a series of Do It Yourself
(DIY) workshops have emerged. The workshops are designed to educate
Chinese consumers how to create and design individual personalized
chocolates or candies, which can then be used as special occasion gifts
like weddings, etc.

*Fruit: Delicious and Nutritious*

![](media/image4.jpeg){width="1.5in" height="1.5in"}

Fresh fruit is a common gift in China, and is purchased for a variety of
holidays, special occasions, and other events. In addition to being
given as a holiday present, fresh fruit is often given to more mature or
senior relatives and hospital patients. Since fresh fruit is so
prevalent and widely available, only high-quality fruit is used as
gifts. When selecting fruit to give as a gift, price is largely ignored,
with consumers willing to pay high prices for large, smooth, unblemished
fresh fruit. Imported fruit including apples, oranges, and grapes from
the United States have earned a reputation in the Chinese market for
superior quality and are often used as gifts rather than for daily
consumption. Fruit gift baskets are extremely popular since the
combination of colorful fruit, perceived health benefits, and attractive
packaging is appealing to most Chinese consumers. High-end, luxury gift
baskets may include other items as well such as expensive tea or
imported wine.

*Nuts: Not a Tough Market to Crack*

![](media/image5.jpeg){width="1.40625in" height="1.875in"}In China, tree
nuts are one of the most popular snacking foods and considered to be an
ideal gift. As Chinese disposable income levels continue to increase so
has demand for nuts and nut based products. Imports have grown
dramatically with almonds and walnuts from California in particular
highly-sought after by Chinese consumers. In 2006 the US was the largest
exporter of almonds and walnuts to China.

During the Chinese Spring Festival many Chinese often prepare a variety
of nuts, often in the shell, for visiting guests to their homes to snack
on. Nuts, specifically walnuts and peanuts, also play a large role as
ingredients in the traditional "eight-treasure congee" (or *labazhou*)
served on the 8^th^ day of the 12^th^ lunar month. Although this day was
traditionally celebrated by Buddhists who associate this date with
Buddha's attainment of Sainthood and prepared *labazhou* in his honor,
in more recent times the eating of this very special congee has become a
largely secular tradition. Also, today 'Labazhou' is sometimes eaten as
a special treat at other times during the year.

Another Chinese holiday that involves the use of nuts is the Mid-Autumn
Festival. For this festival, moon-cakes, a traditional thin-crust pastry
filled with various ingredients ranging from salted duck egg-yolks to
nuts and seeds are exchanged between relatives, friends, and business
contacts. In fact this has become a large and growing holiday business.
In North China, the most famous variety is known as the *wu ren* (or
five nut moon-cakes). This particular moon-cake recipe calls for the use
of pumpkin, sunflower, and sesame seeds as well as walnuts and peanuts.
However, nuts are not only limited to Northern China's *wu ren*
varieties. In recent years, a number of commercial bakeries, hotels, and
restaurants have created new kinds of fillings, and nuts have proven to
be a popular choice. This trend opens new doors for nuts from the US in
the China market, and presents good potential market opportunities for
positioning, promoting and selling these nut products.

As a general holiday gift, high-quality nuts from the United States are
often mixed with dried fruit and presented in fancy packaging designed
to attract Chinese consumers. Additionally, imported nuts are sometimes
combined with other items such as ginseng, tea, fresh fruit and wine in
upscale and often expensive gift packages. Such packages are usually
sold in red boxes or decorated with red ribbons, since red is a lucky
color in Chinese culture and considered appropriate for most if not all
celebratory occasions.

*Wine: An Alternative to Liquor*

Historically, liquor has played an important role in Chinese society and
culture. Today, *baijiu* (a name used to describe a variety of potent
and often pungent Chinese clear grain alcohols) is often consumed during
holidays, family gatherings, banquets and business negotiations. The
potent bottles of this liquor are often presented to more mature or
senior male relatives and friends as special holiday gifts.

The wine market in China is still in its developing stages although it
is growing rapidly as incomes rise and people become aware of health
benefits associated with the drinking of wine. Some Chinese, especially
those with heart or blood pressure problems are moving away from
drinking liquor and increasingly turning to wine as a more suitable
substitute. Additionally, the consumption of wine is often perceived as
being socially and culturally sophisticated, which are highly desirable
traits for China's newly affluent middle and upper-income consumers.
However, since grape based wine culture is still evolving in China; many
consumers are not knowledgeable about wine and often rely on reputation
or product brand names. Therefore, a high-quality but relatively unknown
wine may be passed up in favor of a lower-quality but better known
brand. Proper branding and marketing of wine products is imperative for
market success.

*Health Foods: A New Option*

As Chinese consumers have become more affluent, they have also become
more attuned to the health implications of their consumption habits.
Additionally, as China's population ages, more consumers are requesting
healthy or functional gifts, including certain types of imported and
organic food and food products. Most gifts that fall under this
classification are given to more mature relatives and friends or seniors
during holidays and to hospitalized patients during their recovery
period.

Certain products from the United States have successfully entered this
very niche yet expanding market. One example is American or more often
Wisconsin Ginseng that has been offered in the China market in a variety
of forms including tea, oral solution, sliced and powder. American
Ginseng is different from Chinese Ginseng and is thought to have many
medicinal and health benefits. American Ginseng in traditional terms is
classified as a 'cold' food but Chinese Ginseng is considered to be a
'hot' food. The uniqueness, potency and versatility of American Ginseng
products have made them extremely popular here.

Advertising, a targeted marketing campaign, and the media all can play
an important role in the success of health and organic foods and other
'functional' gifts. Since this is a relatively new market segment, many
Chinese consumers often make purchases based on brand recognition and
product reputation, etc.

**Chinese Holidays**

Below is a list of the important gift-giving holidays in China. Certain
gifts are reserved for specific holidays, and it is important if not
crucial for suppliers (exporters and producers) to learn about what type
of gifts are given during different holiday seasons and special
occasions. Observing Chinese gift-giving customs may increase the
success of food and agricultural products from the United States being
accepted as gifts.

+-------------------------------+----------------------+---------------+
| **Holidays in China**         | **Suggested American | **Price       |
|                               | Products**           | Range**       |
+-------------------------------+----------------------+---------------+
| **New Year**                  | Chocolate; Wine;     | \$10 - \$55   |
|                               | Fruit                |               |
+-------------------------------+----------------------+---------------+
| **Chinese Spring Festival:**  | Nuts; Fruit; Wine;   | \$10 - \$55   |
| The most important holiday in | Chocolate;           |               |
| China. The festival falls on  |                      |               |
| the 1^st^ day of the 1^st^    | Health, Functional   |               |
| lunar month, which is usually | and Organic Foods    |               |
| in February.                  |                      |               |
+-------------------------------+----------------------+---------------+
| **Lantern Festival:** This    | Nuts; Wine; Fruit    | \$10 - \$35   |
| festival is held on the       |                      |               |
| 15^th^ day of the 1^st^ lunar |                      |               |
| month, usually in February or |                      |               |
| March.                        |                      |               |
+-------------------------------+----------------------+---------------+
| **Valentines Day**            | Chocolates           | \$10 - \$20   |
+-------------------------------+----------------------+---------------+
| **Dragon Boat Festival:**     | Wine; Fruit          | \$20 - \$55   |
| This festival falls on the    |                      |               |
| 5^th^ day of the 5^th^ lunar  |                      |               |
| month, usually in June and    |                      |               |
| has been celebrated for more  |                      |               |
| than 2,000 years!             |                      |               |
+-------------------------------+----------------------+---------------+
| **Chinese Lover\'s Day:**     | Chocolate            | \$10 - \$20   |
| This holiday is celebrated on |                      |               |
| the 7^th^ day of the 7^th^    |                      |               |
| lunar month, usually sometime |                      |               |
| in July.                      |                      |               |
+-------------------------------+----------------------+---------------+
| **Chinese Mid-Autumn          | Wine; Fruit          | \$20 - \$55   |
| Festival:** The 15th day of   |                      |               |
| the 8th lunar month, and      |                      |               |
| usually observed in           |                      |               |
| September.                    |                      |               |
+-------------------------------+----------------------+---------------+
| **Chong Yang Festival:** The  | Wine; Fruit; Health  | \$20 - \$55   |
| 9th day of the 9th lunar      | & Function foods     |               |
| month, usually celebrated in  |                      |               |
| October. This holiday is      |                      |               |
| special for elders, since     |                      |               |
| parental respect and filial   |                      |               |
| piety are highly revered      |                      |               |
| traits in Chinese culture.    |                      |               |
+-------------------------------+----------------------+---------------+
| **Christmas**                 | Wine; Fruit;         | \$10 - \$55   |
|                               | Chocolate            |               |
+-------------------------------+----------------------+---------------+

**Other Gift-giving Occasions**

*Personal Gifts*

Gifts exchanged between relatives and friends are considered to be
personal gifts, and are usually given to celebrate or otherwise mark a
momentous occasion. The Chinese also give gifts for housewarmings,
births, birthdays, weddings, illnesses, and even funerals. For births,
weddings, and funerals, cash is the most commonly accepted and
appropriate gift. Fruit and wine are often given to people as
housewarming presents, while fruit is a popular gift for hospital
patients. It is unusual for people to give food for birthdays, with the
exception of birthday cake and sometimes wine, depending upon the
recipient.

*Business Gifts*

Gift-giving is an important way to develop and maintain business and
professional contacts in Chinese culture. Many business transactions
rely upon heavily upon interpersonal relationships, and establishing
strong ties with those one wishes to or is doing business with is
critical for business success in China. Small gifts are always welcome,
and are seen as a token of respect and courtesy given to one's
colleagues and contacts. When giving gifts for business purposes, the
gifts should usually be wrapped in fancy or decorative including red
packaging. Imported items such as wine, fruit, and chocolates are
ideally suited for business gift-giving purposes although increasingly
other non-food items are also popular.

**Marketing US Products as Good Gifts**

-   **Packaging:** In China, appropriate packaging is crucial when
    marketing a product as a potential gift item. Packaging should
    conform to Chinese definitions or ideals of attractiveness. Red is
    considered to bring luck and good fortune, while white is often
    associated with death and should be avoided at all costs, except for
    gifts specifically on the occasion of funerals.

-   **Advertising:** Appropriately targeted advertising strategies and
    marketing campaigns are also vital for the successful promotion of
    gift items. Since many Chinese consumers are looking to buy imported
    products but are unfamiliar with many of these products (and in some
    cases, product categories, such as wine) they rely heavily upon
    brand recognition and product reputation when making purchases.

-   **Quality vs. Quantity:** For gift-giving purposes it is the quality
    of the gift, not the quantity that counts in China. Therefore,
    high-end, high-quality, and luxury items often perform well in this
    market.

-   **Gifts to Avoid:** Certain gifts such as clocks, chrysanthemums,
    shoes, green hats, and turtles should be avoided as they have a
    basket of diverse and assorted negative connotations associated to
    them.

**Other Tips for Giving Gifts in China**

When giving or receiving gifts in China, it is important to use both
hands. While the receiver will most likely express gratitude for a gift,
depending upon the circumstances, a recipient may refuse the gift, even
if they sincerely want it, at which point the giver should insist upon
giving the gift. This mandatory ritual of refusal and insistence may go
back and forth for two or three rounds before the gift is finally
accepted. Despite outward appearances, gifts are usually very welcome,
and may support smooth business transactions, and build interpersonal
relationships which are fundamental to Chinese society.

# 

# IPR Issues

FAS China established an IPR Office in 2006 to address IPR and Labeling
issues related to US agricultural and food products. The aim of the
Office is to provide direct assistance to U.S. industry and commodity
associations and businesses, in their effort to secure registration, as
well as to prevent and/or address IPR infringement with appropriate
market and legal enforcement remedies. The IPR Office is located in the
Agricultural Trade Office (ATO) Beijing.  For additional information,
contact Mr. Yuanchuan Liang at
[yuanchuan.liang@fas.usda.gov.](mailto:yuanchuan.liang@fas.usda.gov.O)
Or visit the FAS China website:
[www.usdachina.org](http://www.usdachina.org/) and locate 'IPR in CHINA/
Introduction to Trademark Registration in China' for related and
detailed information. An IPR Manual published by the FAS China IPR
Office in 2007 can also be found there.

# 

# Contact Information and Useful Websites:

**Agricultural Trade Office, Beijing**

**Embassy of the United States of America**

Tel: (86-10) 8529-6418

Fax: (86-10) 8529-6692

Email: <ATOBeijing@fas.usda.gov>

Web: [www.USDAChina.org](http://www.USDAChina.org/)

**Office of Agricultural Affairs, Beijing**

**Embassy of the United States of America**

Tel: (86-10) 6532-1953

Fax: (86-10) 6532-2962

Email: <AgBeijing@fas.usda.gov>

**Agricultural Trade Office, Chengdu**

Tel: (86-28) 8558-3992

Fax: (86-28) 8513-8698

Email: <ATOChengdu@fas.usda.gov>

Web: [www.USDAChina.org](http://www.USDAChina.org/)

**Agricultural Trade Office, Guangzhou**

Tel: (86-20) 8667-7553

Fax: (86-20) 8666-0703

Email: <ATOGuangzhou@fas.usda.gov>

Web: [www.USDAChina.org](http://www.USDAChina.org/)

**Agricultural Trade Office, Shanghai**

Tel: (86-21) 6279-8622

Fax: (86-21) 6279-8336

Email: <ATOShanghai@fas.usda.gov>

Web: [www.USDAChina.org](http://www.USDAChina.org/)

**Animal and Plant Health Inspection Service**

**Embassy of the United States of America**

Tel: (86-10) 6532-3212

Fax: (86-10) 6532-5813