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Subject:
CHINA BUSINESS
Period: October 1, 2013 to November 1, 2013
Geographies:
Worldwide
Categories:
Comment & Opinion or Companies, Organizations or Consumers or Controversies & Disputes or Deals, M&A, JVs, Licensing or Earnings Release or Finance, Economics, Tax or Innovation & New Ideas or Legal, Legislation, Regulation, Policy or Market News or Marketing & Advertising or Other or People & Personalities or Press Release or Products & Brands or Research, Studies, Advice or Supply Chain or Trends
Contents
 

Comfort Launches Selfie Campaign In China

Unilever’s Comfort brand of fabric softeners partnered with mobile app Face Gossip to launch a marketing campaign in China. Aimed at consumers who love doing the “selfie” self-portrait and self-taken photography trend, the campaign includes a game that automatically measures the brightness level of clothes worn by the users who take their self portraits. Comfort offers clothes designed by celebrity fashion designer Zhang Jingjing as prizes for five lucky participants who also have to share their photographs on China’s leading social media site Sina Weibo.

"Comfort taps into 'selfie' photo trend to sell fabric softener in China", Campaign Asia, October 28, 2013

 
Companies, Organizations  

China's Cosmetics Market Slows Down, Report Says

The growth of the cosmetics industry in China slowed down, with gross retail sales reaching $21.94 billion, according to the report “China Cosmetics Industry Report, 2013–2016,” by search engine Reportlinker.com. In contrast, the cosmetics market in the country saw faster growth rates in the start of the century, with sales of beauty and personal care reaching $24 billion in 2010, according to a report published in the July 2013 issue of the “Cosmoprof-Asia” magazine. At present, foreign brands dominate with local cosmetics market, with the top 3 —L’Oréal, Olay and Mary Kay —together accounting for 12.45 percent of retail sales, according to the Reportlinker.com report.

"Holding a mirror to China's economy through cosmetics", China Daily, October 15, 2013

L’Oréal Posts Strong Growth In China; Continues Domination Of Market

L’Oréal’s sales in China grew 12.4 percent year on year to RMB12.05 billion in 2012, according to market research firm ResearchMoz. Data also revealed rivals Olay and Mary Kay combined accounted for 12.45 percent of the cosmetics industry’s retail sales. Local brand Shanghai Jahwa, with its popular product lines Liushen, Herborist and Maxam, is competing quite capably with its bigger international rivals for share of China’s beauty market. Overall, retail sales grew 21.5 percent YoY to RMB134.01 billion, with skin care sales growing 9.9 percent to RMB80.48 billion, making it the market’s largest segment.

"L’Oreal still dominating China with 12.4% growth", Cosmetics Design, October 08, 2013

Deals, M&A, JVs, Licensing  

Wal-Mart Pushes Restart Button In Asia; Seeks To Speed Up Expansion Efforts

Wal-Mart Stores Inc. is revising its business practices and legal-compliance strategies in Asia as part of its efforts to speed up its expansion efforts in the region. While the retailer has expanded faster in other regions, such as Brazil, Wal-Mart has encountered several snags in Asia. Its sourcing practices in Bangladesh became the focus of media and industry attention following the collapse of a garment factory building, which killed some 430 people. Government restrictions in India, economic slowdown in Japan, and the rise of stronger competitors in China have dampened the U.S. retailer’s operations in the region’s leading markets. In China, the company plans to upgrade its stores to help satisfy Chinese shoppers’ demand for more upscale-looking retail stores.

"Wal-Mart Looks to Gain Ground in Asia", Wall Street Journal, October 05, 2013

Tesco, CRE Announce Joint Venture Combining Retail Operations In China

After announcing their memorandum of agreement on August 9, 2013, Tesco PLC and China Resources Enterprise, Ltd. revealed they have agreed to launch a joint venture combining their retail operations in China. Under the terms of the JV agreement, Tesco will have a 20 percent stake in the merged business, which combines the UK retailer’s retail practices, international sourcing, and digital and online commerce capabilities with CRE’s strength in local knowledge and brand. Combining Tesco’s 134 stores and its shopping mall business in China with CRE’s China Resources Vanguard business, the JV will be the largest retailer in seven of China’s eight most populated and highest-GDP provinces.

"Tesco and CRE to create the leading multi-format retailer in China", Tesco, October 02, 2013

Market News  

Despite Strong Homegrown Competition, Walmart To Push Expansion In China

Walmart announced it will speed up development of its China business by opening 110 stores over the next three years. The expansion strategy comes in the face of strong competition from local retailers, the company said, noting that China represents a strategic market. CEO Mike Duke and Walmart China CEO Greg Foran told reporters in Beijing that the company is committed to continued growth in large and small cities across China, and “doing it in the right way”. The company will open stores in so-called tier-two, tier-three and tier-four cities, creating nearly 19,000 new retail jobs. Walmart will focus on building Supercenters and Sam's Clubs, remodeling existing stores, and further investment in its logistics network.

"Walmart to Accelerate Development in China, Creating 19,000 Jobs", News release, Walmart, October 24, 2013

China's Cosmetics Market Posts Strong Growth; Likely To Catch Up With U.S. Market

China’s cosmetics market is fast catching up with the United States, which currently leads the world market with its $55 billion in annual sales. Annual sales growth in China is averaging 15 percent, much higher than the single-digit global growth rate, and is forecast to reach $38 billion in 2013. In China, skincare accounts for 40 percent of the cosmetics and personal care market, compared with 30 percent for the rest of the world. Foreign-owned cosmetics brands account for 90 percent of sales in China, with Procter & Gamble leading the market with 15 percent share, followed by L’Oréal with 10 percent. Shanghai Jahwa is the leading local cosmetics company, powered by its good brand diversification and multichannel distribution.

"China's beauty industry looking good", The Business Times Singapore, October 10, 2013

Mondelez Redesigns Supply Chain To Reap Savings That Will Drive Marketing Investments

Mondelez International hopes that redesigning its supply chain will drive a 60- to 90-basis-point yearly improvement in its operating profit. The company is accelerating investments in emerging markets to boost growth, and it hopes the supply chain redesign will expand margins in established markets “to levels at or above the average of peer companies”. The redesign will mean $3 billion in gross productivity savings, $1.5 billion in net productivity savings and $1 billion in incremental cash over the next three years in North America and Europe.

"Mondelez Redesigns Supply Chain", Consumer Goods Technology, September 03, 2013

Wal-Mart China Announces New Management Changes

China Retail News, October 29, 2013

Almost 20 percent of grain in China lost or wasted from field to fork

ACS News Service Weekly PressPac, September 04, 2013

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