Tue, Jul 10, 2018 - Page 14 News List

Trade war or not, China Inc already reining in American brands
無論有無貿易戰 中國公司早已壓制美國品牌

The exterior of Starbucks Reserve Roastery in Shanghai, China is pictured during its opening ceremony on Dec. 5.

Photo: Reuters

As Beijing and Washington veer towards a full-blown trade war, American brands in China face what may be an even bigger threat: local rivals armed with innovative products and the Chinese government’s blessing. American household names like Apple Inc, Starbucks Corp and Procter & Gamble Co’s Pampers are seeing their dominance challenged, a potential threat to the hundreds of billions of dollars US firms make in China.

According to an analysis of data from Bain and Kantar, local brands snatched almost three-quarters of China’s 639 billion yuan (US$97 billion) market for fast-moving consumer goods — a category that includes items like soft drinks and shampoo — last year, up from two-thirds in 2013. The data, shared with Reuters, shows that US products like Pampers, Colgate toothpaste and Mead Johnson infant formula saw their market share drop around 10 percentage points in the past five years. The data was based on a survey of 40,000 urban households.

At the same time, savvy Chinese brands like SeeYoung, offering a popular silicon-free shampoo, and Pechoin, a maker of skincare products that uses local ingredients, gained rapidly. “Local competition is now extremely high on the agenda of foreign firms in China,” said Bruno Lannes, Shanghai-based partner with Bain & Co, the consultancy firm that co-authored the report. “In order to win in China now they need to beat not just traditional competitors,” he said. “But they need to win against local companies that are faster and more innovative than they had realized.”

American brands have long enjoyed a vaunted status in China. US fast food, beverages and coffee chains are ubiquitous in China’s cities, while consumers lap up US-branded infant formula, designer jeans, cars and smartphones. That dominance, however, is threatened by China’s push to bolster domestic brands by creating champions in certain categories and weeding out weaker players to improve quality.


1. innovative product phr.


(chuang4 xin1 shang1 pin3)

2. household name phr.家喻戶曉

(jia1 yu4 hu4 xiao3)

3. fast-moving consumer good phr.


(kuai4 su4 xiao1 fei4 pin3)

4. domestic brand phr.


(guo2 nei4 pin3 pai2)

5. upstart adj.


(xin1 cuan3 hong2 de5)

6. established adj.


(yi3 ju4 gui1 mo2 de5)

7. domestic rival phr.


(guo2 nei4 jing4 zheng1 zhe3)

Apple Inc’s iconic iPhone has seen its share of the country’s smartphone market stall at around 10 percent since 2012, according to data from the analytics firm Canalys, and has been overtaken by upstart domestic phone makers like Oppo, Vivo and the more established Huawei.

Starbucks, which boomed in China on the back of a budding coffee culture, said its same store sales growth in the country slowed to zero in the second quarter of 2018. The firm cited delivery issues, but it has also been facing a rising tide of small, fast-growing domestic rivals in China’s big cities.







Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top