Foreign Consumer Goods Companies Face Stiffer Competition From Local Counterparts In China

Foreign consumer goods companies are faced with growing competition from local manufacturers in China, where the market for beauty and personal care products is forecast to grow 12 percent to 203 billion yuan ($32 billion) in 2012, and home care products to rise 11 percent to 78 billion yuan ($12.2 billion), according to Euromonitor. Local brands are closing the so-called quality gap with products manufactured by foreign companies. For example, in 2011, Procter & Gamble’s share in the local toothpaste market declined from 20.8 percent to 19.7 percent, while a Chinese herbal toothpaste’s share of the market rose to 8.8 percent from 1.1 percent five years ago. Unilever’s Zhonghua brand’s market share fell from 12.0 percent to 9.9 percent. Hengan International Group Co. grabbed a 10.6 percent share of the market for tissues and hygiene products, taking the lead from Procter & Gamble, which accounted for 10.5 percent of the market.