More about coffee market in China

Starbucks in China. Business Week and Interbrand have listed the top 100 global brands (market study in China) and Starbucks Coffee ranked in at 91st overall thanks to its $3 billion brand value. The company has spread its business to many countries over the past 30-years. Starbucks entered China’s market through franchising and joint ventures. With an increase in profits in the Chinese market, the company realized that it could gain more control over its partners in China. Therefore, Starbucks gradually changed its business model in China. 

Tea Shops in China 

Tea and coffee compete directly in the Chinese drinks market. With a reputation as a coffee brand, Starbucks faced a serious crisis. Thus, the company decided to open some tea shops in addition to its regular coffee shops. The company realized that drinking tea was part of the Chinese culture and saw it as an opportunity to expand its business rather than simply looking at it as direct competition for its existing products.

Festival foods in China

In order to enter the festival market in China and satisfy the taste and demanding of Chinese consumers, Starbucks released Starbucks mooncakes and Starbucks zongzi in recent years. In the first year of its existence, the mooncake did not sell very well. But from the second year onward, Starbucks combined the mid-autumn festival theme with its coffee culture, creating a new kind of mooncake called the coffee mooncake.

Cups in coffee shops in China

Starbucks not only sells coffee, tea, coffee beans, and mooncakes but also sells cups. Its tumbler cups and coffee mugs are very popular in China, which is often sold out in couple weeks. All throughout China, cups with the Starbucks logo are everywhere. The market for Starbucks’ cups has already spread from white-collar workers to students. Cups of Starbucks are broadly classified into two categories, tumblers, and mugs. It can also be classified by themes, which are charm-logo cups, city cups, thematic mugs, etc. In 2004, Starbucks released a type of city cup with designs based on Chinese cities. Many big cities like Shanghai, Hong Kong, and Beijing designed their own mugs and mini cups.

Starbucks entered the Chinese market in 1999. The company targeted young consumers in China and it predicted that the changing lifestyle of young people in the country would increase their demand for coffee. Wang Jinlong, CEO of Starbucks in China said they aimed to reach two targets. The first was to create a new kind of place and bring a unique environment to the Chinese lifestyle. The second was to combine Chinese tastes with products from Starbucks to give Chinese consumers something new while maintaining a level of familiarity.

In summary, Starbucks in China employed a very successful marketing strategy when entering the country. It was creative and innovative enough to successfully integrate a foreign brand into Chinese culture.

Daxue Consultant China

Sources:

• Starbucks
• Euromonitor International

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Marketing Strategy of Coca Cola in China

Coca Cola, as the world’s largest beverage company, has a history of over 110 years. The brand opened its first bottling plant in China in 1927 in Tianjin and Shanghai. It continued its development in the Middle Kingdom until Shanghai became, by 1948, the first market, beside the United States, to reach more than one million cases of Coca-Cola on a per year basis. 

After the cultural revolution and the period of ultra-protectionism in China, which forced Coca-Cola to left this market, the firm was the very first international company to reenter China’s market in 1979.

Strategy of pricing

At this period, Coca Cola struggles to profit more than 10 years. According to the market report in China Coca Cola company enters China market in 1979, when China was in the period of planned economy, income was very low and the product was too expensive for Chinese consumer. Still Coca Cola insists on keeping the price on the same stage, believing on the nearly development of Chinese economy and mainly willing to maitain its Branding position higher than local brands. Thus, with the steadily increase of standard of living make it now easy to buy for a normal-stage income Chinese.

Second, strategy of advertising.

Coca Cola ‘s former CEO Wood Ralph had a famous saying:” Coca Cola is a carbonated water and sugar syrup, 99.61%. Without advertising, who will drink it?”. Therefore, the advertasing fee has always been the main investment of the brand to buid a strong brand strategy. In 1886 Coca Cola’s turnover was about 50 dollar only, well the advertising fee was $46; in 1901 turnover has increased to $120,000, and the advertising fee was $100,000. Nowadays, Coca Cola’s advertising fee was more than $600,000,000.

Marketing Strategy of Pepsi Cola in China

Unline Coca-Cola, Pepsi was not present in China in the early years of the 20th century. Its presence in China started at the beginning of China’s reform and opening. In 1981, in response with Coca-Cola etablishment, Pepsi signing a deal with the China’s authority, and to set up a first manufacture in Shenzhen, in the South of China. It was the very first firm resulting from a partnership between Chinese and American players. Today, Pepsi has established all over the country and has now more than 35 firm.
Under the big pressure from Coca Cola, Pepsi should strengthen the cooperation with local enterprises, make full use of the advantages of local enterprise resources, improve its popularity, the perfect sales network; In addition, Pepsi need to reduce the management cost and operation cost. The aim is to become a national favorite brand in China.

Amy Wang, Online Consulting China

Source : Official website of Coca-Cola / Reuters

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Recently, as the development of China chain supermarket stores is booming, some international chain enterprises such as Wal-Mart, Carrefour,  Metro and so on occupy the market in China. Meanwhile, many small and medium-sized supermarkets, shopping malls in China have shut down.

Density

7-11’s major strategy of location is opening dozens of new branches in the target area. In this way, it can obviously increase the density of its distribution, which is an important factor in a company’s consideration of opening or closing a shop. When 7-11 decides to open a new area’s market, it won’t set up in a sporadic way but usually use the strategy like a carpet bombing, that is centralized numbers of shops at a same time and small area. It can result in the formation of overwhelming advantages among other shops and lead to a considerable returns and scale.

Product Inventory

7-11 has a very high requirement on product inventory in order to have a more convenient and timely product transportation. It is not hard to find out that in Japan, fresh food has occupied a high percentage of 7-11’s sale’s volume. Making fresh food in convenience shops is costly.  It requires enough big room and high sanitary conditions and all of these will increase the cost to open a shop. Therefore, the company chose a better way to sell fresh food, that is food delivery from other places. 7-11 orders several times everyday electronically. For example, if the food is going to be delivered to customers in the evening, the shop should order the food at 10 in the morning. It means that each shop should order fresh food at least 3 times a day to make sure it can supply breakfast, lunch and dinner. The room of a 7-11 shop is usually very small, only about 30 – 100 m2. But it can supply more than 3,000 kinds of goods which requires a very effective system to be the back-up.

Data System

7-11 has a quite comprehensive data system. It collects a large number of detailed point-of-sale data, which contains product identification, quantity, time of being bought and even the ages and gender of customers. When chain stores send the massage back, the headquarters of 7-11 can analyze the data and identify  specific relationships between customers and goods. It helps the company to decide which are better kinds of goods to supply.

Edited by Amy Wang from Daxue Consultant China

Credit Photo: baidu

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For coffee shop customers in Shanghai, Beijing and Guangzhou, different expectation toward coffee consumption places

Through focus group of professionnels on China market, our expert designed a report about main attitude from citizens of those three cities. The data shows that 65.8% of Beijing citizens believed that it’s necessary to have a well designed coffee room with beautiful decorations. The atmosphere of the coffee shop is very important as well. Then, 65.8% of them do not pay strong attention to price. In Shanghai, people are giving more attention to the price. Also, they are rather more willing to pay for foreign brands than local ones. In Guangzhou, people often spent time in coffee shops in the afternoon to having some afternoon tea. They are, unlike Beijing and Shanghai’s consumers, more caring about the convenience of thge place. 67.8% of them care about if vacant parking spaces are available before they pick which coffee shop to enter, and 56.3% thought it’s not worth to spend much money on drinking coffee.

Coffee Shop Retail localization in Beijing, Shanghai and Guangzhou

So far to now, main customers of Costa coffee shops in Beijing are still people from foreign countries, and local people prefer products which are localized. They do not like to try things that they aren’t familiar with. Hence the location of new-opened coffee shop is generally localized in some streets where the flow of people is high. In Shanghai, the location must be picked at some places that are very quiet and elegant, far away from the noise area. Indeed, Shanghai’s consumer are expecting a more sophisticated consumption. In Guangzhou, first thing to considerate is the traffic. If the traffic is very convenient and the quantity is high, people would like to come all the time.

Different Tastes in China

Consumers in Beijing and Shanghai would rather try some sweet food than people in Guangzhou. Since the tea culture is so important in China, coffee shop retail managers can consider about combine two drinks. When Starbucks first entered Guangzhou, it release a new kind of drink—— Green tea coffee, and it get huge success.

See also: http://philippinesmarketresearch.com/

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French company Arjowiggins is a world-class manufacture which produces technical paper and creative paper. The company was founded in 1492, with more than five centuries of papermaking experience. Arjowiggins’ product is extremely versatile, including printing varieties of creative paper, the security paper, pharmaceutical and medical paper, project tracing paper, Art Print and framed paper, high-end packaging paper, household art paper and a variety of papers which are involved in all kinds of industrial fields.
Arjowiggins totally builds 31 plants, three research and development centersin Europe, the U.S., South America and Asia. And has more than 8200 employees. The annual sales is 2 billion euros, with total assets of over 900 million euros.
Arjowiggins is not only a manufacturer of specialty papers, but also is paper supplier of new varieties and new uses paper. Because the company always pay close attention to the ever-changing world, and are inventing new paper products through its strong research team to meet, or even lead the new demands of the market.
Company has particular emphasis on environmental protection, assesses its manufacturing raw materials and processes in factories around the world on a regular basis, and continue to be enhanced and improved all the time.

Development of Arjowiggins in China

Qingdao
Qingdao Arjowiggins Paper Co., Ltd.
A China market research shows that Arjowiggins entered China in 1995 in Qingdao Hi-Tech Park, the main business is slitting and processing of various natural tracing paper plate making transfer paper, advanced drawing paper, color inkjet printing paper, copy paper works and art paper (including drawingpaper, handmade paper, drawing paper, decorative paper, watercolor paper, etc.) In addition to 65% in domestic sales, the remaining 35% are exported to other Asian countries and regions.”Gateway” and “Canson” are brands, which widely known by consumers in China, their main product is tracing paper, with annual sales of $ 1.18 billion.
Qingdao AoHua Paper Co., Ltd.
This company was set up in 2004 as joint venture, and the main production is “Yu Deng” carbonless paper in all kinds of sizes. The production is not only sold in China, but also  exported to South America, the Far East and the Middle East and other regions, with annual sales of 112 million yuan.

Both companies in Qingdao passed the ISO9001 quality management system certification in 2001.
And in order to provide Asian consumers with better paper, Arjowiggins set up a bonded warehouse in Qingdao in 2004.

Shanghai
The Arjowiggins company representative office was established in Shanghai in 2003, with more than 30 employees. The main target is expanding the Group’s investment and business in China.

Edited by Amy Wang from Daxue China Consultant (market research in China)

Credit Photo: made-in-china

This article Arjowiggins in China, A China Market Research is the first one to appear on Daxue Consulting - Market Research China.

Development of DHL in China

Since the company was founded till 2006, DHL set up 56 branches in major cities across China. With a highly qualified staff of more than 6,500 workers and operations in 318 major cities throughout China, the company covers 95% of China’s population and economic centers. In 2003, DHL began implementation of the five-year investment plan with a total of 200 million U.S. dollars, in order to improve and upgrade existing facilities. In 2006, on the occasion of the company’s 20th anniversary, DHL released its “China first” strategy. Before the end of 2006, the total number of its joint venture branches expanded from 56 to 72, further improving its network coverage. In addition, DHL has also invested about 2,400 million U.S. dollars to build DHL Building construction in Beijing, which officially opened in 2007. DHL has been ahead of the industry in terms of operating capacity.
DHL is the leader in the international express delivery market in China. From 2002-2006, the annual average growth rate has been maintained between 35-45%. The results of the DHL was generally recognized by the industry, and won three awards including “2006 China Best Call Center.”. Looking to the future, DHL will continue to uphold the “customer first” philosophy, and continue to meet customers’ growing demand for express logistics, leading the air express industry to new heights.

Withdrawal of DHL from China express delivery market

In July 2011, as a result of operating losses and policy uncertainty, DHL’s three domestic courier companies transferred all their shares to Michito Shenzhen Industrial Co., Ltd. Sinotrans Development announced this transaction in July of 2011. A market report in China shows the reason for withdrawal can be attributed to two aspects. First, the domestic express business has too much competition, so foreign express delivery companies lack cost advantage. Second, revised October 1, 2009, the Postal Law Start implementation of provisions of foreign domestic express business may not invest in business letters, while the DHL domestic letters and other documents express occupy its overall business’s volume of 35%.

Daxue China Consultant (market report in China)

Sources:

• DHL China
• Reuters
• Forbes
• China Daily

Picture Source: DHL China

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What Is Smartbox?

Smartbox is a new concept of sending gifts. It allows users to choose a bundle of gift cards and activity/getaways within a given theme and gift it to others. It has an attractive appearance and is easy to use. It also offers a variety of different themed gift boxes and each gift box is supplied by high-quality businesses for users to choose.

Different types of Smartbox gift boxes in China

Price range: 148 to 1,498 yuanwith 8 different themed gift boxes

1. Epistemic learning experience: selecting more than 55 kinds of specialty courses.

2. Full of Fun: selecting about 40 kinds of entertainment activities in Shanghai and surrounding areas.

3. Delicious Food & Delight Time: selecting 30 specialty restaurant in Shanghai.

4.Outdoor Adventures: selecting about 50 kinds of outdoor activities in Shanghai and surrounding areas.

5. Perfect Therapy: selecting 60 beauty therapy services in Shanghai.

6. Cheerful Trip: selecting 30 special hotels in Shanghai and surrounding areas.

7. Interesting Trip: selecting 34 boutique hotels in Shanghai and surrounding areas.

8. Royal Experience: selecting 34 luxury hotels in Shanghai and surrounding areas.

Smartbox’s experience in the global market

Smartbox is already successful in France, Belgium, the Netherlands, Luxembourg, the United Kingdom, Spain, Switzerland, Germany, Italy, Portugal, Sweden, and Denmark and many other countries. In 2008, its business expanded to Ireland, Canada, Japan, Brazil and the United States. In 2009, it expanded further into Australia and Austria and finally in 2010, it expanded to Mexico, China and Norway.
Currently, Smartbox provides more than 350 kinds of gift boxes in the global market, selecting more than 10,000 unique experiences for its consumers. The company sold more than 3 million gift boxes by 2009. So far, more than 8 million users have used Smartbox.

Development of Smartbox in China

According to a market study in China, Mr. Pierre Stanley, Smart & Co’s founder, founded Weekendesk, a French company in cooperation with a Belgian entrepreneur in April 2003. This introduced the Smartbox gift concept to the French market.
The company’s vision was to create a carefully wrapped gift that was aesthetically appealing yet simple and easy to use. Mr. Pierre Stanley wanted to change the gift-giving experience away from the traditional box of chocolates or flowers to something fresh and interesting to consumers.
In September 2007, Mr. Pierre Stanley acquired shares from his Belgian partner, and renamed the company from Weekendesk to Smart & Co. Soon after, Smart & Co’s products elevated and achieved the highest gift box product sales in the European market. Due to the company’s internationalization strategy needs, the company changed its product name from Weekendesk to Smartbox.
In January 2011, Smartbox entered into the Chinese market under the Chinese name: Xin Yibao.

Daxue Consultant China (market study in China)

Sources:

• Smartbox
• China Daily
• Delysee 

Picture Source: Smartbox

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Paris Baguette is the top baking brand of Korea’s oldest food company, SPC Group, South Korea. The company currently has over 1500 stores throughout South Korea, the United States ( Los Angeles, New York), China (Shanghai, Beijing, Tianjin). Paris Baguette is mainly engaged in making authentic French bread, fresh sandwiches, delicious cake, and pure coffee. Paris Baguette aims to provide consumers with healthy and delicious products using its 60-years of baking experience and new advanced materials. SPC Group is made up of five main food subsidiaries, including Paris Boutique, Amelie, Tamati, Pascucci, Baskin Robbins Korea and other 13 well-known brands all over the world. The group has more than 2,500 stores around the world. Paris Baguette is Korea’s best-known and most popular bakery brand.

Current situation in Chinese market

According to a market analysis of Pairs Baguette in China, the company has more than 50 locations in four cities in China, which are Beijing, Shanghai, Tianjin and Hangzhou. Currently, Paris Baguette predominately focuses on tier-1 cities in China, especially in Beijing and Shanghai, which occupy almost 85% Paris Baguette’s market in China .

Marketing concept of Paris Baguette in China

Paris Baguette’s marketing concept can be summarized with the acronym, QFICS.

Quality: Paris Baguette only produces the highest quality baked goods using the best raw materials and auxiliary materials, equipment, technology and service.

Freshness: Paris Baguette’s bread must always be in a fresh and healthy state. Products must be made on the spot and be sold out in time on the same day that it is produced. Distribution happens twice a day. And the stores must make sure that the employees are in a good health and mental state.

Item: Paris Baguette always produce new kinds of baked goods. This can be realized by expanding the rate of adoption of new products and maintaining the lowest production of all varieties.

Cleanliness: Paris Baguette ensures the stores are clean at all times.

Service: Paris Baguette always offers the best service.

Main Competitors of Paris Baguette in China ( 85℃, Paul and ILU )

85℃: 85℃ officially entered Shanghai in March 6, 2007. The company already has more than 340 stores in Taiwan. It belongs to the lower-middle price, better suited for the tastes of the younger generation. The launch of the specialty bread includes Julius Caesar, cheese balls, small cuttlefish.

Paul: Paul is the most expensive of the four bakeries, but is an authentic French bakery. The launch of the specialty bread includes croissants, chocolate cream puffs, raspberry tarts, chocolate pastry, and baguettes.

Ilu: Ilu is mainly known for its multi-grain breads. The bakery targets health fanatics looking to enjoy healthier bread. The launch of the specialty bread includes grains dried fruit, red beans and grains, Midsummer wild berry, cuttlefish Bacon.

Daxue Consulting China (market analysis in China)

Sources:

• Paris Baguette
• USDA
• China Daily
• The New York Times

Credit Photo: baike

This article Market analysis: Paris Baguette in China is the first one to appear on Daxue Consulting - Market Research China.

Vichy first entered China market in July 1998, and became the first brand in the country to sell cosmetics in pharmacies. Facing a difficult situation due to the saturation of the Chinese cosmetic market, Vichy successfully found a new way to win consumers.

Vichy used to set its market position in a high grade and would only sell its products in pharmacies, but recently, Vichy has changed its market strategy. Vichy products are now found everywhere in China: in department stores, supermarkets, shopping malls, and anywhere else that sells cosmetic products.

The market research in China done by Vichy indicated that most female customers tended to go elsewhere to find cosmetic goods rather than going to pharmacies. They only went to a pharmacy when they felt sick. Vichy mainly targets those female consumers who accept new productions, pay more attention on personal health and care less about price than functions of a product.

Traditional ways of cosmetic marketing usually cost a lot and all the brands are similarly marketed. This makes it difficult for consumers to determine which brand is the best. Vichy markets its products differently from its competition.

Vichy could reach the needs of consumers by offering exquisite packages. Major Vichy’s packages are blue, white, and transparent, which can remind consumers of its name spring water and bring the enjoyment of beauty.

Main competitors of Vichy in China

Vichy is a branch from L’Oreal, which entered China in 1996.

L’Oreal is the world leader in the cosmetics industry and its worldwide sales have grown steadily. So far, L’Oreal expansion into Asian countries is still growing rapidly. Despite this expansion, the company has yet to achieve its full potential in the emerging Asian market and expects to see its sales grow even faster in the future.

Avon entered China in 1990. Now, Avon has 74 locations in 23 provinces, 5 autonomous regions and 4 municipalities directly under the central government. It currently has a total of 2,000 employees in China.

Nivea has been a leading brand in the international skin-care market, and one of the most famous German companies in China’s market. NIVEA is one of the best FMCG brands in China.

Daxue Consultant China (market study in China)

Sources:

• Vichy China
• Yahoo
• PDF on Chinese Cosmetics market
• Fung Group Report on Chinese Cosmetics market

Credit Photo: cool80

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The meaning of 7Up

1. Wake up: Decide to have a good day, This is the day the lord hath made; let’s rejoice and be glad in it.

2. Dress up:The best way to dress up is to put on a smile. A smile is an expensive way to improve your looks. The lord doesn’t look at the things man looks at. Man looks at outward appearance. but the lord looks at the heart

3. Shut up:Say nice thing and learn to listen. God gave us two ears and one mouth, so he must have meant for us to do twice as much listening as talking.

4. Stand up:For what you believe in. stand for something or you will fall for anything. Let’s not be weary in doing good; for at the proper time. We will reap a harvest if we do not give up. Therefore, as we have opportunity. Let’s do good.

5. Look up:to the lord, I can do everything through christ who strengthens me.

6. Reach up:for something higher. trust in the lord with all you and lean not unto your own. In all your ways, acknowledge will direct your path.

7. Lift up:your prayers. Don’t worry about anything pray about everything. It not hard to see that 7up advocate a positive attitude to life, which is fit to young students in modern China.

Market Report On Main Competitors of 7up in China: Coca Cola, Pepsi, Gatorade

Market Research in China

Coca Cola. Coca-Cola entered China in 1927, for some reason after the withdrawal of return to China in 1979, and set up a Coca-Cola (China) Limited. Now Coca-Cola (China) Co., Ltd. has become China’s largest beverage joint venture, each of the taxes turned over to the country reached three billion yuan.

Pepsi. Pepsi Cola is one of the world’s largest food and beverage companies, with 2009 annual revenues of nearly US$60 billion. The Company employs approximately 285,000 people worldwide, and its products are sold in approximately 200 countries.Its principal businesses include: Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker foods. In 1981, Pepsi Cola became one of the first American companies to enter China when it signed a contract with the Chinese government to set up a bottling plant in Shenzhen. Pepsi Cola has invested more than RMB8 billion in establishing 22 drink bottling plants and one concentrate plant in 21 cities all over China.

Edited by Amy Wang from Daxue Consultant China

Credit Photo:onegreen

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