Dear CBI Members and Partners,
Kindly find the latest UK-China Lifestyle Newsletter covering the latest developments in brands, consumer goods and related sectors.
Our sincere thanks to Rebecca Li of DIT Shanghai for kindly sharing with the CBI's China team.
Download China Lifestyle Newsletter Nov 21
Dear CBI Members and Partners,
Kindly find the latest UK-China Lifestyle Newsletter covering the latest developments in brands, consumer goods and related sectors.
Download China Lifestyle Newsletter - 09 August 2021
Our sincere thanks to Rebecca Li of DIT Shanghai for kindly sharing with the CBI's China team.
Dear CBI Members and Partners,
Kindly find the latest UK-China Lifestyle Newsletter covering the latest developments in brands, consumer goods and related sectors.
Download China Lifestyle Newsletter - 07 June 2021
Our sincere thanks to Rebecca Li of DIT Shanghai for kindly sharing with the CBI's China team.
Dear CBI Members and Partners,
Kindly find the latest UK-China Lifestyle Newsletter covering the latest developments in brands, consumer goods and related sectors.
Download China Lifestyle Newsletter - 10 May 2021
Our sincere thanks to Rebecca Li of DIT Shanghai for kindly sharing with the CBI's China team.
Dear CBI Members and Partners,
Please review the following China Britain Beauty Festival e-letter and follow the links to register your brand at the Great Pavilion in Shanghai. Contact details and registration information can be found below.
Dear CBI Members and Partners,
Kindly find the latest UK-China Lifestyle Newsletter covering the latest developments in brands, consumer goods and related sectors.
Our sincere thanks to Rebecca Li of DIT Shanghai for kindly sharing with the CBI's China team.
Download China Lifestyle Newsletter - 8 March 2021
Dear CBI Members and partners,
Accessing the China Market - Webinar Series
Exporting to China has always been challenging for British beauty brands because of the need for animal testing.
However, on 3 January 2020, the China State Council announced the approval of revised cosmetics regulations, outlining requirements for animal testing
exemption. Once the new regulations begin on 1 May 2021, it will be possible for British brands with ethical considerations within their core values to access China’s huge market and consumer base, which is expected to be worth around £50Bn by the end of this year.
The conditions for exemption remain a challenge, and the British Government is close to a solution for British brands to comply with China’s new safety requirements. The Department for International Trade (DIT) is hosting a beauty festival to walk through these changes and the wider opportunities in China, starting with a webinar series and leading up to a British Pavilion at the China Beauty Expo (CBE), Shanghai.
Open to all, the webinar series will feature seven targeted sessions delivered by industry experts starting from 2 March 2021, covering all key aspects of China beauty from navigating China’s regulatory changes and how to comply with new regulations to the market segment’s landscape and consumer trends.
For more information and to register, please visit the events page. You can also reach out via: [email protected] with any
questions.
CHINA DIRECT would like to thank the DIT Retail team in Shanghai for sharing this information.
Download CHINA BRITAIN BEAUTY FESTIVAL[3849]
The world’s largest spirits company and CBI member, Diageo has announced that the company beat half-year earnings and sales forecasts thanks to stronger demand from China.
Diageo said that organic net sales – excluding currency moves and one-off items as well as acquisitions and disposals – rose by 20% in China between June and February. Diageo attributes this strong performance to an increase in demand for Scotch and Chinese white spirits in the world’s second largest economy.
Diageo CEO, Ivan Menzies said: “[Diageo] is benefiting from consumer trends where people are drinking better and want better brands and experiences. People are moving to spirits and cocktails in a bigger way from wine and beer, and people are trading up for more premium brands. [It’s] hard to see a sustained shift yet, but we’re watching it closely. […] I feel good about the consumer momentum in China. Chinese consumers are looking to discover new special whiskies and drink better.”
This change in consumer tastes has buffered Diageo against the effects of the economic slowdown. First-half organic net sales rose 7.5% to £6.91 billion and earnings of 77p per share - beating analysts’ average forecasts of 71.4p. After the announcement was made, shares in Diageo rose by 5.5% and have continued to rise over the course of February. Diageo’s share price is currently 7.6% higher than January.
Off the back of strong sales, Diageo announced that it would buy back £600 million of shares and renew its focus on its Scotch business. Diageo’s Scotch sales in China have experienced the most pronounced consumer shift. Whereas Diageo used to make the majority of its Scotch whisky sales through partnerships with luxury hotels, the company’s Johnny Walker brand has transitioned to become a drink which Chinese consumers buy for private domestic consumption. Diageo’s vodka label, Smirnoff and rum brand, Captain Morgan, are experiencing a similar change in fortunes, and also performing well in the China market.
CBI member, L’Oreal has launched its CeraVe skincare brand in China. The first range of products includes moisturisers, lotions and cleansers, and will initially be available on Alibaba’s e-commerce portal, T-Mall. Prices range from 45RMB to 374RMB, making CeraVe by far the cheapest foreign cosmetics label available in China.
Whilst L’Oreal’s initial distribution strategy for selling into the China market focuses on the country’s on-going e-commerce boom, the French cosmetics giant is also in discussions with Watson’s, for the offline distribution of CeraVe in China. Watson’s is the world’s largest cosmetics retailer, and is a household name in China. According to Chen Min, head of active cosmetics, L’Oreal China, “The company decided to approach selling into the China market through the country’s e-commerce infrastructure because most Chinese consumers shop for skincare products online.”
Ninell Sobiecka, vice-president for L’Oreal Asia Pacific said: “CeraVe will complement L’Oreal’s current product portfolio in China. […] moreover, the CeraVe series are labelled as accessible to all, with prices 40% lower than market rivals.”
It is CeraVe’s price-point that distinguishes it in-market. There currently is no foreign-branded skincare range for lower to lower-middle class consumers in China. With the launch of CeraVe, the French cosmetics manufacturer is particularly targeting Chinese consumers living in the country’s third and fourth-tier markets.
At the official launch held last Thursday, Ms. Sobiecka made the point: that, whilst The SkinCeuticals brand caters to China’s high-end and luxury market, and Vichy and La Roche Posay serve China’s middle-class consumers, the regions along the Western-side of China remain un-catered for.
This is L’Oreal’s second major product launch in China in six months. CeraVe will compliment a wider range of cosmetics products sold in China under the L’Oreal brand.
CBI member, Burger King opened it’s 1,000th restaurant in the Chinese mainland in late December. Upon opening, the American fast food giant announced that it would be launching an expansion plan across China, which would see a further 1,000 restaurants open over the next three years.
Burger King’s 1,000th restaurant opened in the cosmopolitan district of Qingpu in Shanghai, and despite other US chains such as Starbucks and KFC opting to embrace Chinese styling for their establishments, is decorated in traditional US style.
Ekrem Ozer, CEO of Burger King (China) said: “It [the opening of the 1,000th restaurant] is a milestone, but also a starting point […] the company will continue to accelerate its development in the Chinese market.”
American fast food has proven to be an anomaly with regard to any detrimental impact to business caused by the US-China trade war. This is predominantly because China’s catering industry has grown at an annual average rate which is far faster than the growth of GDP over the same period. Whilst GDP growth has been hovering around 7%, China’s catering industry has risen to 18% over the same 30-year period.
Another factor resulting in Burger King being an outlier within the US business community in China, is that the US restaurant chain has cooperated with many third-party e-commerce platforms, including Ele.me and Meituan. As documented in previous China Direct posts, foreign brands selling into the China market which utilise e-commerce platforms have managed to avoid the sales shortfalls that have afflicted brands who operate through traditional shopfronts. Furthermore, by partnering with Ele.me and Meituan, Burger King has been able to outsource delivery logistics, allowing the chain to save money and protect itself from risks related to higher ingredient costs.
Burger King’s model for growth in China has proven to be both sustainable and effective. Since 2012, the company has opened one restaurant every two days over a sustained period of 6 years. Nonetheless, the company still has a long way to go in China.
Irrespective of the Chinese catering industry’s growth rates, finding space to grow within the market is already a tall order because it is a congested and competitive space. Furthermore, the US-style fast-food corner of this market now only contains established and sophisticated players. Burger King will continue to face substantial competition from its nearest burger-flipping rival, McDonald’s, and will have to compete with the current king of fast-food in China, KFC; who already have over 5,000 stores in operation in China.
Please read more here.
