When British executive Robin Price started making the world's best-selling condoms in China, consumers were used to getting smelly, unbranded rubbers from the government for free.
Just five years after London's SSL International entered China with a landmark joint venture, its Durex brand is comfortably profitable. It has a leading 18 percent share of the condom market with sales expected to grow by at least 30 percent a year until 2007.
PHOTO: REUTESR
"The one child, one family policy has positively encouraged condom use," Price said at his spartan office in Qingdao, a former German concession famous for its beer.
"I'd like them, obviously, to use it more, be healthier and happier," said the 39-year-old Londoner, general manager of Qingdao London International Latex Co Ltd.
"What is driving the growth is really demand, particularly in Beijing, Shanghai and southern China," he added.
His strategy? Give middle-class Chinese a trustworthy alternative to sterilization or the widely used but painful intrauterine device (IUD).
Low quality, sometimes unpackaged "naked" condoms -- which make up nearly three-quarters of 2 billion condoms used in China last year -- are no match for Durex's colored, flavored or "pleasure-extending" products, Price said.
With China's rising salaries, raging sexual revolution, growing awareness of AIDS and a policy allowing city couples to have just one child, the reserved former fashion executive projects rapid sales growth.
The government lifted a ban on condom advertising only in 2002, bowing to intense domestic and international pressure to recognize its burgeoning AIDS epidemic.
"The IUD is still the most popular form of contraception because it's required for most women after they have a child," said Amy Qi, researcher for social marketing firm Futures Group Europe. "But Chi-nese, especially young people, are getting used to condoms."
Visitors at Durex's Qingdao joint venture are greeted by a drab building, the headquarters for Chinese partner Qingdao Double Butterfly Group Co Ltd. Once one of seven state-owned condom makers, the group is now in private hands.
Inside Qingdao-London's factory, phallus-shaped glass moulds are busy moving down automated assembly lines. They are dipped into milky latex solutions, once for color and again for strength.
The battery of tests include one for elasticity in which condoms are pumped full of air like balloons. A Durex condom must be able to hold about 40 liters of air before bursting.
The condoms produced are uniformly 52ml wide across the shaft when laid flat, a common size for Asia, compared to 58ml in Europe and 60ml in Africa.
Price said the factory, with about 265 workers, was nearing maximum capacity and would have to be expanded to meet demand, though there were no imminent plans to build another plant.
Sales at the US$7 million joint venture rose an annual 70 percent to 100 million yuan (US$12 million) last year, contributing about 5 percent to global Durex sales.
Price said sales from the joint venture were expected to make up nearly 10 percent of Durex global sales by 2006, driven in part by dismally low condom usage rates of 6 percent in China, compared to around 8 percent in Thailand and India and 46 percent in Japan.
Of the 72 million condoms Du-rex sold in China last year, only a tiny portion was purchased at myriad neighborhood sex-product shops sprouting across the country. But sex toys will be the next big product line for Durex, Price pre-dicted, powered by demand from post-menopausal women.
"Women's sexual urges don't go away at 40. They are the biggest customers [of sex toys]. That's a growing market in the future, and something that we and competitors will be looking at," he said.
Indeed, Shanghai will host the China International Adult Toys & Reproductive Health Exhibition from Friday to Sunday, billed as the world's largest international sexual product trade event. Organizers said the market for sex products, also known euphemistically as "health care products," was 100 billion yuan last year and growing at rate of 30 percent a year.
Growth like that supports Price's calls to his competitors to set up shop in China.
"I would like to see Trojan, Okamoto, Ansell -- some of the other international brands -- come into China and raise the profile of the condom as a quality product along with us," he said, urging them to: "Come on! Hurry up!"
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