Tag Archives: WalMart

Suning: China’s New Walmart? 苏宁:中国的下一个沃尔玛?

Chinese media are buzzing this morning with reports that retailing giant Suning (Shenzhen: 002024), a name synonymous with electronics, is preparing a major push into general merchandising, laying the groundwork to create a retailing giant that could someday challenge the likes of Walmart (NYSE: WMT) and Carrefour (Paris: CARR). According to the reports, Suning will start its newest retail drive by converting four flagship stores in Beijing, Shanghai, Guangzhou and Nanjing into the new general merchandising format, which will be rebranded as Suning Expo. (English article; Chinese article)

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Lipton Faces Tempest in a Teabag 立顿遭遇“小题大作”

I’ve been quite amused by the latest Chinese media frenzy surrounding Unilever’s (London: UL) Lipton tea brand, which looks more like a tempest in a teapot than a real scandal. Still, this latest brouhaha does underscore the negative publicity that both foreign and domestic consumer brands face from an increasingly aggressive Chinese media that seems determined to uncover the latest food safety scandal. Let’s take a look at the actual facts, or at least my understanding of them, and readers can decide for themselves what to believe. The case stems from a Greenpeace report saying it found unsafe levels of some pesticide residues in 4 Lipton teabags it selected randomly for testing. (English article) Greenpeace added the “unsafe” definition it used was based on European standards that are stricter than Chinese, and I have no doubt that it knew that part of the message would be largely ignored by local media looking for the latest food safety scandal, in a country where such scandals have become quite common these days. The latest such scandal has seen several capsule makers shut down after media reported they were using industrial gelatin instead of edible consumer grade product. While that kind of scandal is certainly very real, this Lipton story — and several others recently surrounding big foreign names like KFC (NYSE: YUM), WalMart (NYSE: WMT) and Carrefour (Paris: CA) — are far less serious and more often involve mislabeling or other misleading advertising issues rather than actual food safety. So let’s get back to the Lipton story, which saw Chinese health officials themselves come out and say that Lipton’s tea bags were in compliance with Chinese health standards, which Greenpeace no doubt already knew when it issued its original report. Not to be deterred, however, overzealous reporters at the official Xinhua news agency put out their own report after interviewing some tea farmers, who said they did actually spray pesticides on their tea plants even after the health officials  said the residue was carried by the wind from other crops. What’s more, Xinhua and other reports also criticized Lipton for using inferior grade tea in its tea bags. Now wait a minute — I thought this was a story about dangerous pesticides, not about the use of lower quality tea, which should come as a surprise to no one since Lipton isn’t really known as a premium product. At the end of the day, it looks to me like Lipton and Unilever have done nothing really wrong in this case, and that Greenpeace — which does good work in general — knowingly took advantage of the sensitivity about food safety to issue its misleading report. While the story is a bit humorous in my view, I’m sure Lipton is hardly happy as it’s probably losing lots of sales due to the negative publicity. At the end of the day Lipton will obviously survive this pseudo-scandal, which once again underscores the very real dangers that both foreign and domestic consumer brands face from an overzealous Chinese media eager to report the latest food safety scandals.

Bottom line: Lipton has become the latest victim of a pseudo food safety scandal promulgated by an overzealous Chinese media eager to uncover such negative news.

Related postings 相关文章:

McDonalds, Carrefour Latest Targets in Consumer Assault 家乐福、麦当劳被中国政府“点名

Wal-Mart Pork Brouhaha Spotlights Food Risk 沃尔玛“标签门”表明中国严打决心

Starbucks to the Rescue? 星巴克出手救助?

 

Retail: Tesco Goes Online, Perry Ellis in New JV 零售:乐购推出网购,派瑞•艾力斯成立合资企业

Let’s start off this Friday before the long Labor Day weekend with a couple of retail items, one from British grocery giant Tesco (London: TSCO) in the online space and another from mainstream clothing maker Perry Ellis (Nasdaq: PERY), which is entering China with a new joint venture. The Tesco plan attests to the incredible popularity of buying things over the Internet in China. As an American living in China, I’ll be the first to say the growing Chinese fondness for buying things online is quite unlike anything I’ve ever seen in the west. Nearly anything can be ordered over the Internet these days, from a McDonalds (NYSE: MCD) hamburger to books, clothing and just about any other merchandise you can think of. Now Tesco will be adding grocery store items to that list, according to a media report citing a company spokeswoman. WalMart (NYSE: WMT) is also playing in the online grocery game through its investment in Yihaodian, while Carrefour (Paris: CA) is developing the space through a tie-up with a Thai partner. This kind of online service differs from many more traditional ones because deliveries take place very soon after an order is placed, and same-day delivery is essential. But the economics for this kind of initiative seem to work in China, thanks to its high population density and the fondness for shopping online to avoid the throngs of people and long lines at grocery stores. I would expect this kind of initiative to be quite successful if Tesco and other big names can execute their plans well, perhaps meaning trouble for smaller operators like Lianhua (HKEx: 980). The other retail news will see Perry Ellis form a joint venture with local partner China Outfitters (HKEx: 1146) to open new stores selling the US company’s Manhattan brand. (company announcement) The partnership will initially focus on big cities like Beijing and Shanghai, with the first store set to open by the end of this year. This tie-up looks a lot like another one announced last November by Gap (NYSE: GPS), another mainstream US retailer, which said it planned to have 15 stores in China by the end of its current fiscal year and 45 within a year of that. (previous post) The arrival of these more mid-range retailers reflects the emergence of a growing middle class in China, who like to enjoy higher quality products like fashionable clothing and pricey lattes from Starbucks (Nasdaq: SBUX) but don’t want to pay the big prices for luxury brands. Perry Ellis and the Gap are joining even bigger chains like H&M (Stockholm: HMb) and Uniqlo (Tokyo: 9983) in their China expansions, and I don’t really see any problems yet as this segment of the market is growing so quickly it can probably support quite a number of well-run players. Look for more similar mainstream foreign clothing chains to join this trend in the next couple of years, and also for possibly 1 or 2 to withdraw as they discover that a big market doesn’t necessarily guarantee success.

Bottom line: Tesco’s testing of online sales reflects the popularity of e-commerce in China, while Perry Ellis’ new joint venture reflects the big opportunity offered by a growing middle class.

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E-Commerce: 360Buy Explores IM, Wal-Mart Gets Serious 京东商城内测即时通讯工具,沃尔玛有意控股一号店

Gap’s China Plan: Chasing the Middle End Gap锁定中国中产阶层

McDonalds, Carrefour Latest Targets in Consumer Assault 家乐福、麦当劳被中国政府“点名