Wal-Mart Demands Lower Prices For Goods Made In China

Wal-Mart Stores Inc. is demanding lower prices from its suppliers that manufacture their goods in China. Seeking to share in the savings generated by China’s devaluation of the yuan, Wal-Mart managers in various countries have reportedly asked price cuts of 2 percent to 6 percent. Aimed at helping Wal-Mart maintain its “everyday low cost” or EDLC, the demand for cost cuts will cover mainly general merchandise, including home furnishings, apparel, and health and beauty products.

"Exclusive: Wal-Mart presses suppliers to share benefits of cheaper yuan", Reuters, September 23, 2015

Unilever Opens Innovation Incubation Center In Shanghai

Unilever China partnered with the Shanghai Technology Entrepreneurship Foundation for Graduates to open The Unilever China Foundry, the company’s global innovation incubation program, in Shanghai, China. With Unilever investing at least €1 million per year, the Foundry project will accept business proposals aimed at helping the company in terms of smart technologies and marketing methods. Initial focus of the proposals will be on five leading requirements, including digital-enabled anti-counterfeiting technologies, smart vending platforms, and interactive packaging.

"The Unilever China Foundry lands in Shanghai", Shanghai Daily, September 12, 2015

Euromonitor Identifies World's Top Countries With Fastest-Growing Middle Class

For the period 2015 to 2030, China, India, Indonesia, Nigeria, and the Philippines are forecast to have the fastest-growing middle class, according to Euromonitor International. Factors that are expected to make the middle class the “prominent consumer force” in these emerging countries include their growing size, strong income growth prospects, and a median income exceeding US$10,000 per household in 2030. According to Euromonitor, China will remain the world’s largest middle class despite its economic slowdown, while India is forecast to be among the top countries in terms of growth in median income. In Indonesia, middle-class households are expected to gain more purchasing power, while Nigeria’s middle class is forecast to reach 15 million in size by 2030. Economic growth stability and improved income distribution will drive the middle class in the Philippines to grow 41.8 percent.

"Top 5 Emerging Markets with the Best Middle Class Potential", Euromonitor International, September 20, 2015

Metro Group Partners With Alibaba To Promote Online Commerce In China

Retailer Metro Group partnered with Alibaba Group to promote e-commerce in China. As part of the strategic partnership, the companies will expand their e-commerce businesses in the country, with Metro Group opening a cross-border online store on Alibaba Group’s Tmall Global online market platform. According to the companies, they will also look at the feasibility of more collaboration opportunities in terms of sourcing, supply chain, and big data.

"METRO GROUP and Alibaba Group join forces to promote e-commerce in China", METRO GROUP, September 08, 2015

The Macy’s Name May Not Be Magic Enough In China’s Online Market

If Macy’s hopes to succeed on China’s Tmall Global platform, it needs to understand the realities of Internet marketing to Chinese consumers today. Tmall enables foreign companies to advertise and sell directly to millions of China’s increasingly affluent online buyers. Macy’s is investing $25 million to tackle the Chinese online market and plans to sell $50 million worth of its premium brands in 2016 (without the brick-and-mortar stores). The key question is, why would Chinese consumers buy upscale brands like Coach and Estée Lauder from Macy’s? What value does the consumer get from a venerated old retailer? The answer: not much. The better approach would be to follow Costco’s successful Chinese marketing lead. “You’d think this is a nation of 1.3 billion squirrels, the way Costco is moving its private label Kirkland mixed nuts,” says the China Digital Review.

"Will Macy’s Magic Work in China?", China Digital Review, August 24, 2015

Hot Coffee Market Share In China Grows As Tea Declines

Market researcher Canadean reports that 82 percent of the 1.28 billion kg of hot drinks consumed in China in 2014 was tea. But despite the fact that coffee drinking accounts for a small amount (5.7 percent) of hot drink consumption, it is the fastest growing segment of the market. Canadean says the volume growth of coffee over the next four years will be 15.4 percent. Hot coffee will achieve a market share of 8.4 percent by 2019, at the expense of tea’s market share. In terms of value, the Chinese hot coffee market – worth $2.1 billion in 2014 – is expected to more than double to  $4.5 billion by 2019.

"Tea still most consumed hot drink in China; but coffee making inroads", News release, Canadean report, August 17, 2015