At some point, the packaging of coffee and tea drinks has become increasingly extravagant. Freshly made coffee uses coconut shells and bamboo tubes as containers, which can be kept as decorations after drinking; tea drinks have started to include decorative items and plant seeds with orders, especially in spring, when 'buying milk tea gets you fancy hair clips' has become a trend among brands. Milk tea brands are riding the 'free hair clip' wave Image source: Xiaohongshu @知岫, @didi妙妙屋, @CoCo都可合肥 BUTTERFUL&CREAMOROU, a Korean bakery brand that became famous for its 'green bag,' has queues of 1-3 hours, with many consumers inside and outside the store holding the packaging for photos, earning the brand the nickname 'the bakery that sells green bags.' The 'green bag' is a must-have for B&C photo shoots Image source: Xiaohongshu @骄阳is, Weibo user Some coffee brands have developed peripheral IP, with coffee cups, badges, and toys included with bulk purchases, which consumers even sell separately on second-hand platforms. Second-hand platform users displaying freebies from Saturnbird and Yongpu Image source: Xianyu @冬柒柒, @岔路口! Now, brands are no longer just competing on the product itself but also on the decorations and peripherals that come with it. These various trinkets add gimmicks to the products and attract consumers who come for the freebies. Perhaps consumers' interest in freebies is just a passing fad, and some comments say it's a 'buy the box, return the pearl' situation. Nevertheless, many people are willing to pay for the 'box.' In the packaging marketing of food and beverages, the fable of 'buying the casket and returning the pearl' may have taken on new meaning. Why does the new version of 'buying the casket and returning the pearl' always stimulate new consumer desires? Besides being attractive and fun, what other clever ideas can brands come up with for packaging and freebies? What implications does this have for the brands themselves? 'Buying the casket and returning the pearl' is truly satisfying Japanese design expert Fumito Sada, in his book 'The 0.2 Second Design Power,' mentions: 'When shopping customers pass by the shelf, the time for the product to catch their eye is only 0.2 seconds.' It is this 0.2 seconds that becomes the critical moment for a product to grab consumer attention. Products with more vivid colors, more attractive points, and better alignment with target consumers' preferences are more likely to make consumers stop and take notice. Wild Plant x Nowwa Coffee: Buy freshly made coffee and get plant seeds Image source: Weibo @野生植物 The combination of freebies and products adds to the visual appeal of the packaging. Nowadays, although some freshly made and online-sold food and beverages are moving away from traditional supermarket shelves, products with high aesthetic appeal also generate more buzz on social networks. Shuyi Xiancao sparked a wave of 'camellia hair clip' competitions online through freebies. Many consumers showed off the number of clips they received, saying, 'I must be the person with the most Shuyi camellia hair clips on the internet!' Some even directly asked the staff for 'two more.' Shuyi Xiancao's new product comes with a 'camellia hair clip' Image source: Xiaohongshu @晨星 When we searched for Shuyi's new product 'Orange Blossom Camellia' on social platforms like Xiaohongshu and Weibo, we found that the vast majority of discussions focused on 'appearance' and 'free hair clips,' far outweighing discussions about the taste of the milk tea. 'One of the secrets to making a product sell well is packaging,' according to Nielsen's '2019 China Consumer Market Top Ten Trends,' which points out that '64% of consumers decide whether to try a new product based on packaging, and the return on investment from new packaging is 50 times that of advertising.' This confirms that even if young people realize that paying for packaging and freebies is actually 'buying the casket and returning the pearl,' they will still willingly pay next time, exclaiming 'so worth it.' Attractive and interesting things naturally stimulate curiosity, the desire to own, and the urge to share. Consumption brings not only the dopamine rush of placing an order but also the joy of sharing and receiving likes on social media after posting a check-in. In early March, Naixue Tea launched a 'hidden benefit' activity with its new sakura series: consumers who noted 'Sakura Hero, please give me one more sakura' in their order would receive a sakura hair clip, prompting many netizens to share their orders. Naixue Tea's freebies sparked a wave of Xiaohongshu posts Image source: Xiaohongshu @知岫, @略略略略略 Even though these freebies have little practical value, consumers are more attracted to the social attributes of the 'box + pearl' combination. Young people's 'buying the casket and returning the pearl' behavior is similar to when they were children buying instant noodles for the cards or comic books—whether the noodles tasted good or were even eaten didn't matter; what mattered was collecting the full set of cards after opening the bag. There is even a Douban group dedicated to reminiscing about instant noodles Image source: Douban group At this level, the freebies far exceed the product itself. Young people buy for the freebies to 'have fun,' precisely because the freebies carry more emotional value than the product itself. Brands also tacitly accept this 'buying the casket and returning the pearl' behavior. After all, eating, drinking, and playing are increasingly becoming experiential consumption. People are already paying for these goods and services, so as long as the freebies are good and the product doesn't taste bad, it's not a loss. If they 'accidentally find it tastes good,' then such products have the opportunity to build customer loyalty for the brand.

'Got a bargain'—A consumption illusion?

SAP Hybris once conducted a survey of over 7,000 consumers in the Asia-Pacific region. This 'Consumer Insight Survey' pointed out that when choosing brands, Chinese consumers like to receive surprise benefits from brands, with two-thirds of surveyed consumers mentioning discounts and freebies as the most discussed topics of added value. The combined sale of product + freebie often conveys a signal of 'better value,' and therefore, the 'box + pearl' creates a consumption illusion: 'I got a bargain.' When people buy instant noodles for the free bowl or yogurt for the free cup in supermarkets, they are also driven by the psychology of 'getting a good deal.' Even if they don't lack cups or bowls at home, consumers can't resist these 'boxes.' Many people say, 'I see a free bowl and I want to buy it,' or 'I don't want to buy it, but it comes with a bowl.' Netizens attracted by freebies Image source: Xiaohongshu @Luna, @今天开始做欧皇 When bulk purchases come with freebies, consumers perceive the brand with freebies as more 'cost-effective' at similar prices. However, in response to brands' 'value-for-money' tactics, some 'clear-headed' voices say it's just a marketing gimmick—the same hair clip costs only 0.6 yuan on e-commerce platforms, so why spend over ten yuan on a cup of milk tea? A camellia hair clip costs only 0.6 yuan on Taobao Image source: Taobao In fact, the premium on food and beverages due to packaging may no longer be considered 'cost-effective.' According to iResearch Consulting data, new-style tea brands that focus on high-end branding, such as Heytea, Naixue Tea, and Lelecha, have relatively high average order values, basically around 25 yuan, with Naixue Tea at 27 yuan, the highest among peers. [1] Although high-end tea brands have announced price cuts since the beginning of this year, overall prices remain high. Naixue Tea once disclosed in its IPO prospectus that from 2018 to 2020, its packaging costs as a proportion of total revenue increased from 6.1% to 9.2%. Calculated by average order value, the packaging cost for a cup of Naixue Tea is about 2.48 yuan, an increase of nearly 50%. The packaging of a cup of new-style tea has evolved from the basic cup body, lid, and straw to cup sleeves, cup holders, and insulated bags. If you add freebies, you can imagine how much of the cost is taken up by packaging. Consumers noting 'no insulated bag, please' Image source: Xiaohongshu @亚pinky Packaging and freebies can bring significant 'premium' to food, and the 'cost-effectiveness' in young people's eyes may not be as 'meticulously calculated' as imagined. Using the 'box' as a megaphone for brand philosophy Product packaging and freebies are media through which brands reach consumers. Freebies can make products richer and more interesting in terms of packaging, while conveying brand philosophy and enabling interaction with consumers. Facing the 'over-packaging' issue of its single-cup instant coffee plastic shells, Saturnbird launched the 'Return Plan' in 2019. After finishing the coffee, consumers can bring empty cups to offline 'return points' for recycling, exchanging them for brand merchandise or coffee, and can also use empty cups to support public welfare activities. Saturnbird's iconic 'small cup' instant coffee Image source: Saturnbird official website In this way, Saturnbird not only reaches consumers offline and strengthens emotional ties but also establishes an image of emphasizing environmental concepts and social responsibility. In November last year, Naixue Tea launched a public welfare activity through freebies: purchasing designated tea drinks and adding 1 yuan could exchange for a 'cat paw cup stopper.' These '1 yuan love' donations would be fully donated to the 'China Small Animal Protection Association' to help stray animals. Naixue's 'cat paw cup stopper' public welfare activity Image source: Naixue Tea Speaking of brands doing public welfare, we must mention the 'hats' of the juice brand innocent. Since 2003, innocent has placed knitted hats on the caps of its juice products every winter. These hats are hand-knitted by volunteers. In the UK, for every bottle sold, innocent donates £0.25 (about 2.2 yuan) to Age UK, a charity dedicated to serving the elderly. Innocent juice wearing knitted hats Image source: innocent official website On its official website, innocent also showcases various styles of hand-knitted hats, each with a 'thoughtful' knitting tutorial. Various styles of bottle cap knitted hats Image source: innocent official website The bottle cap knitted hats have gradually become a symbol of the brand, encapsulating the story behind the brand and conveying its philosophy to consumers: 'doing business in the right way.' Through such marketing activities, Saturnbird, Naixue Tea, and innocent have fulfilled their corporate social responsibility and established emotional connections with consumers. When consumers buy products, they are not just paying for the packaging design but also expressing their approval of the public welfare significance behind these freebies.

New insights from 'buying the casket and returning the pearl'

So, is 'buying the casket and returning the pearl' a sustainable marketing approach? Under integrated brand marketing, freebies and peripherals achieve immediate consumption stimulation. In the long run, if brands want to use these 'boxes' to stabilize their brand image and maintain interaction with consumers, they need to customize freebies based on their product attributes and brand culture. Why can Yongpu and Saturnbird consistently impress consumers with freebies, with some 'limited edition' peripherals selling at high prices on second-hand markets? Many consumers even say, 'I stock up on coffee just to collect the cups.' Consumers showing off their collected freebie coffee cups Image source: Xiaohongshu @MiAn, @Pan小月 According to public reports, Saturnbird has maintained a growth rate of 2-3 times per year over the past three years up to June 2021, with a repurchase rate of nearly 50% [2]; Yongpu founder Tiepi also revealed in June last year that the quarterly repurchase rate of Yongpu users had increased from 28% at the end of 2020 to 35%. [3] Through spontaneous posts on online platforms, we also found that consumers are more willing to show off freebies, viewing them more as an interest exchange than as a purchase or consumption. Netizens who bluntly say 'I only want the freebie cup' Image source: Xiaohongshu The reason is that Yongpu and Saturnbird have given their freebies and peripherals a 'brand feel' and 'limited edition feel,' accumulating brand IP while being aesthetically pleasing. These freebies have also helped them reach new consumer groups beyond the product itself. Brands need to differentiate their peripheral freebies by highlighting brand tone and adapting to product attributes, so that consumers form a sense of identification with the brand. In other words, the appearance of the box depends on the pearl. Why can Starbucks continuously produce peripherals, with limited editions being resold at several times the price, yet still have loyal peripheral followers? Starbucks' cat paw cup, launched in 2019, was once resold for over a thousand yuan, making it 'hard to find' Image source: Starbucks Because these peripherals are carriers of Starbucks' brand culture, and the uses of various cups are highly compatible with coffee drinking scenarios. Consumers identify with the brand's tone, so they continue to chase peripherals and bring their peripheral cups to Starbucks to buy drinks. Shaping brand tone is destined to be a long process. Short-term marketing with freebies is not contradictory to long-term brand building, because ultimately, whether a brand can retain consumers depends on product strength and brand philosophy. Conclusion Brands are trying to add gimmicks to their products with decorative items and peripherals to achieve marketing effects, including creating sensory appeal, increasing the added value of product appearance and emotional value, generating more buzz, and creating a 'better value' reason to buy. Consumers are also willing to pay for these due to curiosity and experiential consumption. At the same time, we also see more brands cleverly using short-term popularity to try to establish long-term communication with consumers and expand brand mindshare. All of this is built on the foundation of making good products and telling good brand stories. Source: FBIF Food & Beverage Innovation (ID: FoodInnovation) References: [1] China New-style Tea Industry Research Report, October 15, 2021, iResearch Consulting [2] Saturnbird, Yongpu, Shicui: Who will become the next coffee category king? February 21, 2022, Yiwei Research [3] Yongpu Coffee completes over 50 million yuan A+ round financing, will open its first offline experience store this year, June 11, 2021, 36Kr Are you 'watching' me?