China's FMCG Market Slows Down Further But Stabilizes In 2014

China’s fast moving consumer goods market grew 5.6 percent in terms of value for the 52-week period ending June 13, 2014, compared with the same period in the previous year, according to data from market research firm Kantar Worldpanel. Lower-tier cities were a major driver for the FMCG market’s total growth, with counties experiencing 8.9 percent or higher growth rates. Growth slowed down from 15 percent in the second quarter of 2011 to 4.7 percent in the second quarter of 2014. Consumers’ move to slow down their trading up to premium products is cited as one of the factors that caused the lower growth rate.

"FMCG Growth Showing Signs of Stabilizing in The Latest Quarter whilst Local Retailers Gain Share", Kantar Worldpanel, July 17, 2014

China Arbitrator Rules Against Labor Complaint Against Wal-Mart

An arbitration committee in the city of Changde in China ruled against a labor complaint filed by the local chapter of All-China Federation of Trade Unions, a Community Party-sanctioned labor union, against Wal-Mart Stores, Inc. Union official Huang Xingguo said many of the complaining workers plan to appeal the arbitrator’s ruling, claiming they have not received fair compensation or timely notification about Wal-Mart’s closure of a store in the city in March 2014. Wal-Mart said it complies with China’s labor laws, treats its employees with respect, and appreciates that “the arbitrator has agreed through the decision.”

"China Panel Dismisses Labor Complaint Against Wal-Mart", Wall Street Journal, June 26, 2014

China's Consumers Lack Brand Loyalty, Study Reveals

Leading consumer brands are faced with low customer loyalty in China, according to a joint study by research firms Bain & Company and Kantar Worldpanel. Results of the study, which covered 40,000 households in mainland China, revealed a high churn rate among consumers, with the top 5 brands in each market segment seeing between 40–80 percent of new customers. Hair care brand Head & Shoulders, for example, saw its customer base expand 3 percent from 2011 to 2012; however, data revealed 45 percent of 2011 buyers did not return in 2012. Market penetration drives repurchase rates and market share, the study revealed.

"Chinese customers' lack of loyalty puts pressure on brands", South China Morning Post, June 11, 2014

Coty Appoints Li & Fung As Distributor Of Some Brands In China

Coty Inc. appointed Li & Fung as distributor of some of its brands, including adidas, Rimmel, and Playboy, in China. Marking a change in Coty’s marketing strategy for mass-distribution brands in China, the deal will allow Coty to use Li & Fung’s expansive distribution network in the country, as well as the local distributor’s strengths in the go-to-market business. Coty also announced its plan to stop selling the TJoy brand and instead focus on its leading global brands, which have more potential for growth in the China market. According to the companies, the deal will take effect on July 1, 2014.

"Coty Inc. And Li & Fung Announce A Distribution Agreement In China", PRNewswire, June 03, 2014