Bob McDonald, chairman of the board and chief executive officer of P&G told China Daily on Wednesday that “China is P&G’s second-largest consumer market in the world following the United States, but per capita consumption is still far less than that of the US.”
For that reason, P&G is compelled to “continue to increase investment in the market”, he said.
According to McDonald, P&G generated $5 billion in sales in China for fiscal year 2009, accounting for 7 percent of its global sales revenues of $75 billion.
As part of the investment plan, P&G will set up an innovation center in Beijing with an investment of $80 million and over 500 employees from 16 countries.
The innovation center aims to develop new products that are tailored especially for emerging markets including China.
“One of the reasons we (decided) to establish the innovation center here is we can take advantage of China’s universities, research and development technologies and scientists,” said McDonald.
The innovation center will mainly be involved in the development of products including fabric care, oral hygiene, baby care and snack foods.
In addition to the innovation center, a distribution center will be built next month in Guangzhou where the firm’s Chinese headquarters is located, serving distribution for both home and abroad.
McDonald also said that P&G has decided to build the tenth new factory in the Yangtze River Delta region.
During the past two decades, P&G has invested more than $1.5 billion in China.
The company’s aggressive investments are driven by its ambitious goal of adding one billion more new consumers worldwide by 2015, from the current four billion. – read more at ChinaDaily.com…
The first four Gap stores will feature a full range of Gap adult, GapKids and babyGap product, including all styles of the brand’s stylish and fashionable 1969 Premium Jeans. This announcement marks the start of a long-term, multi-channel consumer market entry strategy for Gap Inc. that involves more stores in major regions, including Hong Kong, in the coming year.
In Shanghai, a 1,796 square meter Gap flagship will be located on the premier Nanjing West Road, occupying two floors in the Venture Tech building. It will be followed by another 1,140 square meter flagship located on Mid Huaihai Road, one of Shanghai’s top high streets. In Beijing, a 1,165 square meter flagship store will span two floors in the APM building on Wanfujing Street; another 1,800 square meter store will be opened in Chaobei Joy City, a large scale regional shopping center.
As part of its multi-channel entry strategy, Gap Inc. has partnered with Shanghai Yi Shang Network Information Company. The online shopping site will give consumers throughout the country the opportunity to shop for Gap products whenever and wherever they want. – read more at ChinaRetailNews.com
Starbucks VIA Ready Brew instant coffee is offered at a Starbucks coffee shop in Chicago, Illinois. Starbucks instant coffee is already available in the United States, Canada, the United Kingdom and Japan. (Scott Olson/For China Daily)
Wang Jinlong, chairman of Starbucks in China, told China Daily that the company is presently working on market surveys and customer preferences for such products.
Starbucks Chief Executive Officer Howard Schultz said the company expects to sell more than $1 billion of its instant coffee, called Via Coffee Essence, worldwide after it started offering the powdered mix in Japan, the world’s biggest market for instant coffee since early this month.
The product is already available in the United States, Canada and the United Kingdom.
“During the last five decades, there have been very few new products, but great progress has been made in the world’s instant coffee market,” Wang said.
“Starbucks has taken over 20 years to revolutionize its offerings and we are offering high-quality instant coffee that customers can enjoy anytime and anywhere,” he added.
Instant coffee accounts for just 2 to 3 percent of coffee consumption in the US, he said. But, the company is convinced of the huge potential in China and expects to launch the products soon.
According to market research firm Euromonitor International, coffee sales in China could reach $3.6 billion by 2011 from $2.4 billion in 2006.
Instant coffee currently makes up the biggest chunk of China’s coffee industry with Nestle’s Nescaf and Kraft’s Maxwell House the major players in the market.
Starbucks operates more than 16,000 outlets in over 50 countries. Since entering the mainland in 1999, it has 376 outlets in 26 cities, mainly in coastal regions.
Wang said the company would focus more on inland cities in the future.
The company expects second- and third-tier cities to become significant markets after its expansion.
It has opened 14 outlets in Chengdu and 10 outlets in Chongqing.
Meanwhile, the company will look to further expand its presence in first-tier cities like Beijing, Shanghai and Shenzhen. — read more at ChinaDaily.com…
American Airlines will use the Boeing 777 for its new Chicago-Beijing service.
The Texas-based carrier cited a disagreement with Chinese aviation authorities over take-off and landing times in Beijing and rescheduled the new service for May 4 as it tries to resolve the dispute.
The cancellation of the flight is expected to delay American’s efforts to seize the upper hand in the world’s fastest-growing commercial aviation market, which is a key driver in the global aviation industry’s recovery.
But the new route will remain grounded if American cannot reach an agreement with Chinese aviation officials about “commercially viable operating slots”, the airline said in a statement.
“I don’t want to speculate what might happen. But there is the possibility that more cancellations will happen if we do not get this resolved,” said Theo Panagiotoulias, American’s vice-president for the Pacific.
American had scheduled the Boeing 777 flight to arrive at Beijing Capital International Airport at 1:55 pm on Tuesday and depart Beijing later in the afternoon.
It said Chinese authorities only allowed the flight to land at 2:20 am and depart at 4:20 am from Beijing, Asia’s busiest airport.
“Simply put, American has not received commercially viable landing and takeoff slots,” the statement said.
The airline said it is currently rebooking customers on other flights to get them to their destinations. Customers are also being offered full refunds or the opportunity to travel on American at a later date.
American had sold about 240 seats on the inaugural flight from Chicago to Beijing and about the same number on the return flight, said Panagiotoulias. – read more at People’s Daily Online…
Air Canada's overall capacity will increase 4 to 6 percent this year, while Asia will see a more-than-10 percent rise in capacity. (Agencies)
The Canadian carrier is expected to receive its first Boeing 787 Dreamliner in 2013 and is considering launching scheduled services between Guangzhou and Vancouver with a B787, the most fuel-efficient airliner built by Boeing, said Calin Rovinescu, chief executive officer (CEO) at Air Canada.
The Guangzhou service would make Air Canada the first North American airline to serve the southern city in the Pearl River Delta.
“China is amongst the most important international markets for us. The increased capacity to Beijing and Shanghai is a large commitment of assets, over $1 billion of assets,” Rovinescu said on Friday.
Rovinescu said the continued economic rebound in China made Air Canada “confident about taking a risk” by expanding capacity in China while the airline industry has just started to see signs of recovery from falling travel demand.
Another important driver is that the Chinese government granted Approved Destination Status (ADS) to Canada last December, he said. The ADS system simplifies visa application procedures for tourists and they can use ordinary passports to apply for tourist visas if they want to visit an approved country.
The number of Chinese tourists in Canada is expected to increase 50 percent annually by 2015 after ADS takes effect, according to figures from Conference Board of Canada.
Air Canada reduced its total capacity by 14 percent last year due to falling travel demand. Its overall capacity will increase 4 to 6 percent this year, while Asia will see a more-than-10 percent rise in capacity and China is seeing the biggest increase, about 25 percent, Rovinescu said. – read more at CHinaDaily.com…
A model holds a UniStrong GPS unit. UniStrong hopes to raise 1.11 billion yuan with an IPO on the SME board. (China Daily)
During the past eight years with the NBA’s Houston Rockets, Yao succeeded in translating his popularity among fans and exciting on-court performance into some hefty paychecks.
In Forbes’ 2009 list of Chinese celebrities, Yao ranked No 1 with an annual income of 357 million yuan.
Managing that astronomical amount has been the task assigned to his financial team.
His previous investments include co-founding Top100.cn, a Chinese music website, opening several Yao Restaurants in Houston and Shanghai, and snapping up the Shanghai basketball team he used to play for.
These business decisions are all closely associated with his hobbies: pop music, food and basketball.
His latest investment is no exception. As a fan of science and astronomy, Yao signed a five-year endorsement contract with Beijing UniStrong Science & Technology Co Ltd, a high-tech company specializing in Global Positioning System (GPS) technologies.
According to the deal, Yao purchased 675,000 shares of the company for 375,000 yuan.
Currently, UniStrong is hoping to raise 1.11 billion yuan through offering 30 million shares, with an IPO price of 37 yuan per share on the Small and Medium Enterprise board. As the company’s fourth largest shareholder, Yao holds 675,000 shares, accounting for 0.75 percent of the total.
“The high offering price reflected high market recognition and confidence towards UniStrong,” said Jiang Zhou, an industry analyst with Xiangcai Securities. – read more at ChinaDaily.com…
The move effectively means the company no longer needs to filter its search results, as required by Chinese law.
Although Google’s exit is good news for its rivals, chiefly Baidu, Sogou and up-and-comer Tencent, many experts said it is a “lose-lose situation” for both China and the US-based company.
The initial reaction from the authorities came via an unnamed State Council information official who told Xinhua News Agency that Google had “violated its written promise it made when entering the Chinese market (in 2006) by stopping filtering its search service and blaming China, in insinuation, for alleged hacker attacks”.
“This is totally wrong. We’re uncompromisingly opposed to the politicization of commercial issues, and express our discontent and indignation to Google for its unreasonable accusations and conduct,” the official said.
However, just hours later, Foreign Ministry spokesman Qin Gang told a regular press briefing that the government would handle the case “according to law”, and that the move was an isolated act by a commercial company and should not affect China-US ties “unless politicized”.
Philip Crowley, a US State Department spokesman, said on Monday it was “a decision for Google to make”. – read more at ChinaDaily.com…
A model poses in front of a car produced by Shanghai GM at an auto show in Shanghai. Am Xin / China Daily
The number of car models in China’s showrooms quadrupled in the past six years, forcing companies to fight for attention by unveiling vehicles at the Imperial Ancestral Temple in Beijing and the Great Wall outside the capital – and by paying Olympic gold medalist Michael Phelps millions of dollars.
“It is clear that brands are still in the forming process,” said Joerg Mull, chief financial officer for Volkswagen AG’s China unit. “One of the keys for success in China in the long run is brand building and brand establishment.”
About 83 percent of Chinese buyers last year purchased their first vehicle, said the State Information Center, a research arm of the government’s National Development and Reform Commission.
At stake for China’s more than 130 carmakers is winning loyal customers in world’s largest automobile market.
Sales in the country surged 46 percent to 13.6 million last year, according to the China Association of Automobile Manufacturers. In the US, sales slumped 21 percent to 10.4 million, the fewest since 1982, according to Autodata Corp.
This year, sales in China may rise more than 10 percent to about 15 million vehicles, Chang Xiaocun, head of the Ministry of Commerce’s market construction department, said. Customers choose from 221 models, more than double the total of 2008 and more than quadruple that of 2004, the manufacturers association said.
“You’ve got to create the right image, you’ve got to market it aggressively,” General Motors’ China President Kevin Wale said after the company and Chinese partner SAIC Motor Corp launched their Buick Excelle XT in Shanghai.
Car buyers in China tend to be younger than those in the US, Wale said, so the Internet is a key part of an automaker’s marketing strategy. The average Buick customer in China is 28, married and a college graduate. His US counterpart is 66 and doesn’t have a degree, General Motors China said.
A row of Carrefour shopping trolleys at the entrance to a Beijing outlet of the French retailer. (XU YIN / CHINA FOTO PRESS)
Retailer embarks on strategic expansion on the back of high sales
The night time craze was symbolic of the retail giant’s strong performance in China. Claudio Gouveia, vice-president of Carrefour China and also general manager of the North Territory of Carrefour China, said the country has become one of the most significant and also fastest-growing markets for the retailer.
Carrefour last year pulled out of Russia and southern Italy amid the economic meltdown following decisions to quit Japanese, South Korean and Mexican markets in 2005 and 2006, because of “unsmooth operations”. It sold its stores to local enterprises.
However, the retailer maintained steady expansion in China. Gouveia said that Carrefour opened 22 new stores in 2009, boosting the total number of outlets to 157 across the country. It plans to open 20 to 25 new outlets this year.
He added that the company was satisfied and very optimistic about its business in China because the country’s household consumption rates have been high.
In the past year, Carrefour benefited a lot from the stimulus measures, introduced by the Chinese government. For example, the authorities subsidized energy-saving household appliances in an effort to encourage their purchase.
Gouveia said Carrefour had a very clear strategic plan for the Chinese market and would be focusing on constructing hypermarkets with an average size from 6,000 sq m to 11,000 sq m.
The company was making great efforts to balance its presence in big cities and also second and third tier cities. It has been operating its retail business in 45 cities across China.
“Currently, Carrefour has a good presence in big cities while more new stores will be in second and third tier cities,” said Gouveia.
The French company will be the first international retailer to enter the Inner Mongolia autonomous region, where it plans to build a new outlet in 2011.
The retailer plans to develop its China-based outlets alongside the construction of local infrastructure and arrival of new businesses. “For instance, there will be a new airport in the Daxing district of Beijing’s southern suburb and there may be a new outlet nearby. I believe we have many opportunities in this area,” said Gouveia.
In response to its rival Wal-Mart, which is planning to build about 50 new stores each year, adding to its current total of 160 outlets, Gouveia said the focus of Carrefour was to keep a good balance between the rhythm of expansion and the quality of the stores.
Hong Kong clothing retailers threaten to quit Taiwan over tax issue: Taipei – Four Hong Kong clothing retailers are threatening to quit Taiwan over a tax dispute with Taiwan authorities, a press report said Monday. The four Hong Kong retailers – Hang Ten, Giordano, Bossini and BaLeNo – made the threat in a petition to President Ma Ying-jeou, demanding that their names be cleared, or they might withdraw from Taiwan, the United Daily News quoted Lai Shih-pao as saying. (Via China News.)
Hainan to curb ‘whopping housing price’: As of the phenomena that the ‘whopping prices’ for living in hotels in Hainan Province ‘bluff off’ the tourists during the Spring Festival, the government would takes efforts to regulate the market, Wu Kunxiong, deputy director general of the tourism department of Hainan Province said Saturday. The government will strictly crack down on the house speculators and formulate tourism standards to cope with the high prices, according to Wu. (Via Business – People’s Daily Online.)
Revenue From Beijing’s Five-star Hotels Beijing Down 16.9% In 2009: According to data provided by Bureau of Statistics of Beijing, the revenue of star-grade hotels in the city decreased by 9.7% year-on-year in 2009. During the entire year of 2009, star hotels in Beijing made total revenues of CNY21.94 billion, including CNY9.98 billion from guest rooms. (Via ChinaRetailNews.com.)
APEC seeking pathways to Asia-Pacific free trade area: Senior officials from Pacific Rim economies accelerated their efforts Monday to seek ”possible pathways” to a region-wide free trade zone, but fell short of reaching any consensus except to continue necessary work. After a meeting in Hiroshima, where Japan formally took up its chairmanship of the Asia-Pacific Economic Cooperation forum for 2010, a Japanese official said, ”We already have very sensible analytical studies but also have lots of issues that require further discussions.” (Via Kyodo News (Business).)
Asia leads global march away from easy credit: (HONG KONG) The US Federal Reserve has just kick- started its cautious exit from unprecedented emergency lending measures – but the process has been going on for months in the Asia-Pacific region, underscoring the two-speed path of the global recovery. (Via Business Times Online – All The Headlines.)
