Mr. Paul French

GLG News by Mr. Paul French, Publishing & Marketing Director

Why The Urban Chinese Need to Pay More For Their Food

March 26, 2007

Analysis of:China PBOC's Zhou not worried about current inflation | www.forbes.com

 

Inflation worries have translated into consumer worries in China

But they need not worry in terms of non-food sales

And it is an urban issue not a rural one where most people live

Hep-B - It was only a matter of time before a foreign company got caught

March 26, 2007

Analysis of:Nokia China in lawsuit over Hepatitis B carrier | www.msnbc.msn.com

 

So far cases of discrimination over HBV have been mainly made against Chinese companies

The Beijing government last year decided to outlaw anti HBV carrier discrimination

The Nokia case indicates a lack of control by the Chinese entity over its subsidiary factories

China's Companies Get A New Tax Incentive For Making Social/Charitable Donations

March 26, 2007

Analysis of:New tax law helps charity | english.people.com.cn

 

China’s Communist leaders want to see more of the wealth generated by both public and private enterprise being invested into charitable and social “good deeds”,

92.5% of Chinese firms made donations in cash last year – this is now set to increase

Although it remains to be seen how much of a direct effect the new tax breaks to corporate philanthropy will have.

The Chinese - A Nation of Savers, Or a Nation of Self-Taxers

March 26, 2007

Analysis of:Personal savings tax a big burden | www.chinadaily.com.cn

 

An average of about 18% to 19% of consumer incomes in China are placed into savings accounts, making Chinese savings rates among the highest in the world;

The significance of this is that there is a considerable amount of average salaries in China that is not being spent at retail outlets;

This also means that purchase of education and healthcare services has a discretionary element.

More Stores Should Boost Sales for Yue YuenMore Stores Should Boost Sales for Yue Yuen

March 9, 2007

Analysis of:Yue Yuan to double Mainland outlets | www.stuff.co.nz

Yue Yuen is showing how a Chinese manufacturer can become a brand and a retailer;

Domestic brands are closing the gap on the brand giants such as Nike and Adidas in China;

There is still a lot of possible potential for increased sales in China for all footwear brands.

Another Round of Price Wars in China’s Auto Market

March 9, 2007

Analysis of:Price war revs as GM offers discount | www.chinadaily.com.cn

 

Off-season price slashing has begun and has been started by GM rather than one of the local manufacturers;

This raises questions on what manufacturers are doing to slash production costs and maintain margins;

At the same time the scramble at the high end continues.

In China C&A Isn’t Zara

March 5, 2007

Analysis of:C&A opens four new fashion stores in Shanghai | www.fibre2fashion.com

 

Fashion retailer C&A is coming to China but may find the going tough;

The truth is that Zara’s success indicates the middle mass market is opening up but only to the right retailers;

The driving force of the middle mass market now in China’s cities is a repeat of what was seen in Japan and Korea earlier, a burgeoning Office Lady (OL) market.

Home Depot in China - Will it be worth the Wait?

December 14, 2006

Analysis of:Home Depot to acquire home improvement retailer in China | www.usatoday.com

After three years of looking at the market Home Depot are finally planning to open in China;

The focus will increasingly be on soft furnishings in China as property transactions slow

Key to success will be the right product offering in the locations they choose to open in

China Beer - it's still all about margins

December 7, 2006

Analysis of:SABMiller sees Snow beer on the rise in China | asia.news.yahoo.com

Margins remain tight in China's drinks market despite rising sales.

Competition & costs continue to take their toll on profits.

The continued shake-up in the drinks industry in China is driven increasingly by these tight margins.

 

The competitions Getting Tough in China's Middle Market

November 20, 2006

Analysis of:Fast Retailing To Set Up Clothing Unit In Shanghai | www.kamcity.com

Uniqlo will have to respond to the Zara Effect in China

Zara is proving that the office ladies are the middle segment of the fashion business in Shanghai

At the same time the lower end retail chains are seeing sales collapse

The Mainlander Effect in Hong Kong

November 10, 2006

Analysis of:Hong Kong Retail Sales Seen Accelerating as Unemployment Falls | www.bloomberg.com

Retail Sales look substantially stronger of late;

The drop in Hong Kong unemployment is important but so is the Mainlander Effect

The Government now needs to ensure that the Mainlanders keep on coming to maintain growth.

Carrefour are Right: Calmness will Prevail

October 30, 2006

Analysis of:Carrefour not interested in big China acquisition | news.yahoo.com

Wal-Mart is looking to leap frog through acquisition while Carrefour is taking a more organic approach to growth in China;

Wal-Mart may find itself biting off more than it can chew and may have underestimated the challenges of changing a corporate culture in China;

Carrefour is proving once again that it understands China on a far deeper level than its American rival.

Slim That Supply Chain Starbucks

October 24, 2006

Analysis of:Starbucks Acquires from H&Q Asia Pacific Majority Ownership of Operations in Beijing and Tianjin | www.finanznachrichten.de

Starbucks is the latest in a line of retailers/caterers to sever the relationship with their Chinese partner.

Starbucks is doing this before it starts a major pre-Olympics expansion in Beijing.

However, questions remain over the long term viability of the coffee shop business in China.

Wal-Mart Attempts Catch Up With the Competition in China

October 18, 2006

Analysis of:Wal-Mart buys retailer in bid for China market | www.iht.com

Wal-Mart is attempting to leap frog past Carrefour in China through acquisition

However, Wal-Mart is still some way from finding its feet in China and acquiring 100 stores while their own are still under-peforming may not be too smart

The acquisition (if it ultimately happens) raises a number of questions about Wal-Mart in China including where they will ultimately pitch themselves in the Chinese retail sector.

Best Buy Faces Uphill Struggle in China

September 13, 2006

Analysis of:Best Buy plans to open first Shanghai outlet | www.courier-journal.com

Best Buy has succeeded in getting the major domestic players nervous. However, why they should worry is not all that clear as Best Buy will have little initial impact on the market. Success in China will be a major uphill battle for Best Buy

Fast Stands to Gain China Exposure From Giordano Buy

August 9, 2006

Analysis of:Fast Retailing makes Giordano move | www.apparelanalyst.com

Fast Retailing has the money – Giordano the region wide reach in Asia making sense for Fast;

To date UNIQLO’s retail operations in China have been small-scale and under-performing while Giordano has established a national chain and strong brand awareness;

If successful in its bid, Fast can now look to leverage its Chinese manufacturing operations with Giordano and reap benefits from Giordano’s China network of outlets and on-the-ground knowledge.

Adidas Can Do It in China But They Need To Combine Sport and Fashion

August 9, 2006

Analysis of:Adidas looking to overtake Nike through Chinese market | www.todayonline.com

Adidas has Nike on the ropes in China at the moment but that may not last;

Though some good marketing and fashionable lines have boosted Adidas’s China market share they need to maintain this push;

Much of this will depend on a combination of the fickleness of consumer taste as well as the continued inability of Nike to get its game together in China.

Hong Kong's Retail Sales Growth - Thanks the Mainland Chinese

August 3, 2006

Analysis of:Hong Kong's Retail Sales Likely Accelerated as Confidence Rose | www.bloomberg.com

Retail sales are growing strongly in Hong Kong again but the reasons are far from clear.

Rather than Hong Kong residents spending freely again, much of the underlying growth is coming from the influx of Mainland Chinese tourists to the territory enjoying tax free shopping.

Anything that deters or worries Mainland spenders in Hong Kong – for instance the proposed introduced of a sales tax – will ultimately be bad for the territory’s retail sales.

Mobile Gaming Makes Sense in China If the Cost is Right

July 31, 2006

Analysis of:Motorola, Shanda offer mobile gaming in China | www.washingtonpost.com

On-line gaming remains massive in China this summer;

The involvement of Chinese games developer Shanda is encouraging;

But price, as ever in China, will be an issue determining success or failure.

Movenpick Could Easily Fly or Plummet in China

July 31, 2006

Analysis of:Nestle launches premium ice cream brand in China | www.foodanddrinkeurope.com

Movenpick is being launched in China as a luxury ice cream brand

However, history tells us that luxury ice cream brands can either prosper or fail quickly in the hyper competitive Chinese market

Maintaining price and value proposition will not be an easy task as the case studies of Haagen-Dazs and Wall's show

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