Labelling may not be the first thing that comes to mind when devising a multimarket expansion strategy. However, for brands looking to go global, getting product labelling right from the very beginning is vital. It can be the determining factor that gives them competitive advantage and puts them ahead in the race to the shelves of both physical and virtual stores.
When it comes to devising and implementing a global retail expansion strategy, considerations around packaging are pivotal. Not only operationally and with respect to sustainability, but to meet the aesthetic preferences of consumers within those markets.
For many businesses, however, regulatory requirements can come further down the priority list, particularly when it comes to product labelling. This may be due to time constraints, a lack of in-house expertise and awareness, or a combination of all three.
Product labelling plays a key role in the context of an organisation’s international journey. For businesses looking to go global, getting product labelling right from the very beginning is vital. It can be the determining factor that gives them a competitive advantage and puts them ahead in the race to the shelves of both physical and online stores.
Beyond aesthetics, ensuring labels are compliant with local regulation is imperative to the seamless rollout of a product in a new market. This can be particularly challenging for global firms with multimarket operations, as labelling is a highly regulated – and nuanced - activity worldwide. It’s also more important in some sectors than others. Take the beauty industry, for example, which fundamentally relies on compliance with strict health and safety measures to function.
Laws may vary widely between countries and regions, meaning that a blanket approach to international labelling is usually not possible. Let’s look at some of the key product labelling issues at stake for brands looking to expand into global markets.
Cosmetics: how do the EU and US compare?
In the beauty sector, the EU stipulates that cosmetic products must list their ingredients in descending order according to weight. Ingredients below 1%, meanwhile, can be listed in any order. Colourants may also be included in any order using the Colour Index (CI) number.
Moreover, while English can be the main language used on the label, the EU requires that the product function, claims, directions of use, and warnings or precautions be translated into the local language of every member state market where the item will be sold. This can be challenging for markets such as Switzerland, which has four official languages.
In another key global market, the USA, the Food and Drugs Administration (FDA) requires companies to list the ingredients in the same way as the EU does; however, when it comes to colourants, businesses must use FDA nomenclature. All required information on labels must be in English.
In the USA, if a product makes a therapeutic claim, it will be regulated as an over-the-counter drug, rather than a cosmetic. This means a completely different set of requirements, translation for this product type needs to be especially accurate.
For THG brands such as ESPA or Perricone MD which retail in multiple markets, these considerations are essential – particularly given the rapid rollout of new product development (NPD) and the pace at which these products are delivered, from first click to final mile.