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| Subject: |
CHINA BUSINESS
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| Period: |
November 1, 2013 to January 1, 2014
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| Geographies: |
Worldwide
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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
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Geoduck clams, oysters and other two-shelled bivalves harvested off the coasts of Washington, Oregon, Alaska and Northern California have been banned from import into China, because of a contamination problem. Chinese government inspectors discovered that some of the clams were tainted with arsenic and a toxin that causes paralytic shellfish poisoning. U.S. officials are waiting for more information from China to determine the source of the contamination. The open-ended ban is seen as a major blow to the $270 million Northwest U.S. shellfish industry.
"China Imposes First-Ever West Coast Shellfish Ban", KUOW.org, December 12, 2013
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Walmart plans to develop small community shopping centers in China’s third- and fourth-tier cities, replicating its U.S. small-town community-based stores approach in the country. Walmart’s development strategy, which involves selecting locations in less popular cities including those in Guangdong Province, has been described as a smart move by market analysts, such as Wang Rong, vice president of Roland Berger Strategy Consultants’ Greater China office. With a Walmart supermarket or a Sam’s Club membership warehouse as the planned shopping centers’ anchor tenant, Walmart will not find it difficult to recruit other businesses as tenants. Despite market analysts’ endorsement of Walmart’s expansion plans in China, the retailer has been very cautious with its strategy, driven mainly by growing market competition. Commercial real estate investments in the country reached $82 billion in the first half of 2013 alone, with as many as 150 shopping centers opening or have been opened this year.
"Walmart Plans To Replicate U.S. Small-Town Strategy In China", Worldcrunch, November 01, 2013
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Wal-Mart Stores Inc. plans to expand its Sam’s Club wholesale operations in China as part of its efforts to grow its business in China, currently one of the retailer’s most difficult markets. At present, the company operates 10 Sam’s Club stores in China, a country of more than 1.34 billion people, while in the United States, with 300 million people, Walmart operates 550 Sam’s Club stores. Walmart China chief executive Roger Foran said his company plans to open more Sam’s Clubs in China in 2014, eventually reaching 10 new stores per year in 6–7 years.
"Wal-Mart to Expand Sam's Clubs in China", Wall Street Journal, December 18, 2013
Unilever’s plans to lay off 2,000 employees and reduce its personal care product range by 10 percent will not affect its expansion plans in China, according to company CEO Paul Polman. Facing a slowdown in the personal care market, which is also affecting its main rivals Procter & Gamble, Colgate-Palmolive, and Johnson & Johnson, the company aims to cut costs by $683 million in 2014. In the third quarter of 2013, Unilever’s global sales grew 3.2 percent to €12.5 billion, compared with 5.9 percent in the same quarter in 2012. Sales in emerging markets, which account for 40 percent of the company’s sales, grew 6.2 percent, compared with 10.7 percent in the same quarter in the previous year.
"Unilever's planned cuts won't affect China expansion", Want China Times, December 12, 2013
Beauty retailer The Body Shop said it welcomes reports that China is planning to revise its policies regarding testing for cosmetics manufactured in the country. Among the first cosmetics companies to campaign against animal testing for cosmetics, The Body Shop began its advocacy for cruelty-free cosmetics in 1989, becoming the first industry leader to lend its voice to the movement. In 1996, The Body Shop founder Anita Roddick joined Cruelty Free International’s founding organization BUAV.
"The Body Shop Welcomes the News Reports that The Chinese Food and Drug Administration will Adopt a New Approach to Animal Testing for Cosmetic Products ", PRNewswire , November 08, 2013
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Wall Street Journal, December 19, 2013
South China Morning Post, December 19, 2013
CNN Wire, December 03, 2013
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Walmart launched Niuhaidianshang, a third-party payment services company, in the Shanghai free trade zone in China. Walmart transferred its business from Yihaodian, a business-to-consumer ecommerce company it acquired in 2012 and which provides consumers with an online shopping platform. Taking advantage of the free trade zone's liberal policies, Walmart plans to use the new company to compete with third-party payment companies, such as Alibaba and 360buy.
"Walmart taps third-party payment services in China", WantChinaTimes.com, December 15, 2013
China’s Food and Drug Administration ordered the removal of Avon’s Naturals Rose and Rose Hips Fairness Cream skin-whitening cream from the market after it was found to contain phenol, a prohibited substance. According to Beijing Society for Environmental Science deputy secretary-general Dong Jinshi, the substance may affect female fertility and may cause liver and kidney damage. Avon’s China division said the cream is not included in its local catalogue; however, it is sold on Chinese online stores and has a serial number from local authorities.
"Avon whitening cream banned in China after phenol discovered", WantChinaTimes.com, December 07, 2013
Carrefour SA said it plans to open 20 new hypermarkets in China as part of its efforts to expand its presence in the country by entering 30 new cities and opening 60 new stores in the next three years. Currently operating 236 stores in 73 cities, Carrefour’s new expansion strategy focuses on China’s third- and fourth-tier cities. Although facing strong competition and challenges in the local retail market, Carrefour, which reported sales in China rose 4.7 percent in the third quarter, remains optimistic and sees many opportunities in the market.
"Carrefour shops around for new locations in China", China Daily, December 06, 2013
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Global Times , December 11, 2013
Internet Retailer, December 02, 2013
Jing Daily, November 20, 2013
Global Times , November 18, 2013
The New York Times, November 11, 2013
Worldcrunch, November 01, 2013
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Emotional factors are increasingly becoming an important influence on consumer buying decisions in China’s tiers 1–4 cities, according to market research firm GroupM. Of the 22 product categories covered by the study, such as automobile, cosmetics, skincare, and electronics, emotional drivers played the leading role in determining which products to buy, data from the Shan Hai Jin 2013 survey revealed. Results of the study also revealed Chinese consumers’ level of sophistication is rising, understanding their consumption behavior must rise above conventional tiers, geography, demographics, and social groups. Brands need to keep in mind that emotions play a significant role in promoting brand loyalty, especially among consumers in tiers 1 and 2 cities.
"Chinese consumers get more emotional", GroupM China, December 16, 2013
In 2013, the natural personal care market grew 10.6 percent to $29.5 billion at the manufacturers’ level, according to market research firm Kline & Company. Data from the report “Natural Personal Care: Global Market Brief” revealed Brazil and China posted the fastest-growing rates, with sales in China expanding by 24 percent and gradually challenging the global market share of the United States. Developed markets also showed strong growth, with the United States posting 7 percent and Europe, 6 percent. In China, both domestic and foreign brands are growing, although local brands account for about 80 percent of the market. Brazil’s market is dominated by local marketers Natura and O Boticário, which together hold about 85 percent of the segment. Since 2008, the world’s natural personal care market has been expanding with a CAGR of 11.3 percent and is forecast to grow 9.2 percent to reach $46 billion in 2018.
"At $29+ Billion, the Global Natural Personal Care Market is Naturally Strong, sees Kline ", Kline, December 10, 2013
China’s Singles Day holiday offers Western brands an opportunity to expand their online presence in China. Created by university students in 1990s who figured the data November 11 or 11/11 resembled four lonely stick figures, the annual event has become the world’s largest ecommerce occurrence. In 2012, online transactions during the holiday overloaded banks, with Chinese ecommerce company reporting $3 billion in sales, which is twice the amount that all of the U.S. retailers jointly recover on Cyber Monday. Also referred to as Double 11, this year’s version of the informal holiday sees many Western brands, including Gap, Adidas, and Toys ‘R’ Us are pushing their discount deals and promos on online stores in China, such as Tmall and Taobao. Software giant Microsoft is joining Tmall for the first time this year.
"How Western Brands Are Tapping Into China's Crazy-Big E-commerce Holiday", Advertising Age, November 04, 2013
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