China is the second largest economy in the world and every significant brand's future is impacted by its growth (or collapse)—but who's got the time?! Here's the week's reads that will make you look like a keen China observer in case you find yourself immersed in a cultural conversation.
This holiday week: Haagen-Dazs' moon cake madness… Yao Ming's unique net worth… Unicom iPhone sales… Tencent's market value… talking Bread Talk… carpeting China… online grocery sales… lagging e-vehicles… 4G… Italian shoemakers... and more.
Haagen-Dazs Moons China
China is observing the national holiday of Mid Autumn Festival ("Moon Festival") this Thursday and Friday, which means revelry, fireworks, family and, of course, moon cakes. Unfortunately, the CCP's official spending crackdown has been hurting high-end moon cake sales. But one brand that appears to be doing well anyway is Haagen-Dazs.
Haagen-Dazs' China success is practically legendary in the country's consumer history. Despite what seemed like a deck stacked against it, the ice creamery expanded across the country and become a popular top-shelf dining destination and gift brand. One reason was Haagen-Dazs' smart move to localize early. Today, Strabucks and even McDonald's do moon cakes; but Haagen-Dazs introduced its unique ice cream spin on the traditional moon cake way back in 1997. It was a natural extension from Hong Kong, where the brand had sold ice cream moon cakes since 1992. Haagen-Dazs does a brisk moon cake business in other places with significant Chinese populations, such as Singapore.
My trip to a Haagen-Dazs moon cake distribution tent in Shanghai's Gubei neighborhood was met with a long line and great demand, despite each tin selling for $50 or more.
According to parent General Mills, Haagen-Dazs moon cake sales have grown 25 percent annually since 1997. General Mills also claims that—to no surprise after the jaunt to the Gubei location—"In Shanghai alone, one in every five families consumes one box of Häagen-Dazs mooncakes."
Yao Ming's Second Act
Last week boxer Floyd Mayweather collected $41.5 million for his bout with Canelo Alvarez, putting his career earnings in the neighborhood of $350 million. At the same time, Xinhua reported that former NBA star and current Shanghai resident Yao Ming was worth an estimated $3 billion yuan or $484 million. And Yao's brand is expanding in all directions.
Go anywhere in China and it won't be long before you somehow run into Yao. He's the face of Oreo cookies and Omo detergent and his face, it seems, can be found in every aisle of any supermarket. He's also the owner of a California vineyard which is home to Yao Family Wines. The winery's new Napa Crest is Yao Family Wines' "discount" offering, which sells for 535 yuan ($86), or a third of some of Yao's other bottles.
But Yao's consumer endorsements are just part of his brand image. Not only is Yao a member of the Shanghai government’s top advisory body but he's also an outspoken philanthropist. Right now, Yao is not only starring alongside David Beckham and Prince William in an international elephant conservation campaign but he's also starring in China in a new 20-minute PSA titled "I've Got Sunshine" ("我有阳光") that addresses juvenile delinquency. Widely respected in both China and the west, Yao is a huge, unique modern icon nearly without equal.
Products Position as Pro-Family Values, Anti-Technology
The snack product at the center of this new ad is not important. What is important is the message that technology and the modern world is resulting in families—the absolute cornerstone of Chinese society—being driven apart. As noted before, the theme of technology as an enemy of Chinese family values is so pervasive that technology brands themselves—like Huawei—have launched entire campaigns to address it.
More China News
- China only has 40,000 vending machines but it's about to have a lot, lot more of them.
- The rise of the Hutong concept store.
- China Unicom, one of the two services partnered with Apple, reported 100,000 new iPhone sales in five days. Unicom's success may be because Apple itself has, for some reason, halted direct sales of the new iPhone 5S to Chinese costumers.
- The original China ad man comments on ad evolution in China.
- Don't look now but Tencent's market value ($100 million) is closing in on Facebook's. And helping Tencent along is a new movie distribution deal with Disney.
- Bread Talk is just one bakery chain riding China's bakery craze.
- Sometime in 2014, Starbucks will join Apple and a lot of other brands for whom China is now the second largest market.
- The simultaneous release of the iPhone 5S/5C in China is killing China's iPhone gray market.
- Hefei property developer who hates taste buds makes a half ton moon cake.
- All that glitters is not gold as Chinese turn toward diamond engagement rings.
- Will Hong Kong fall behind Shanghai?
- After opening its third China factory, Unilever already eyeing fourth.
- Shaw Industries, the world's largest carpet maker, envisions wall to wall shag in China.
- The coming 4G boom promises to generate $2 billion for Huawei.
- Italian shoemakers looking to China.
- Tech in Asia argues that iPhones are actually cheaper in China.
- Kickstarter for Chinese journalism… kinda.
- Another look at how history's bad blood is a roadblock for Japanese automakers in China.
- Hermès' Chinese lifestyle brand, Shang Xia, opens a shop in Paris.
- Eye care brand Alcon accused of bribery by Chinese authorities.
- China's electric vehicle subsidies can't get sales out of first gear.
- Yihaodian and China's boom in online grocery buying.
- Chinese dairy brand Huishan plans $1.3 billion IPO.
- Goodbye lowest price: China FMCGs are going premium.
- Prada's bottom line hurt by declining China sales.
- China's second richest man is recovering after a knife attack by a disgruntled hire.
At top: While it remains unclear why "Despicable Me 2" did not get approval for release in China (one rumor is that the minions looked too much like former China leader Zhang Zemin), that has not stopped minions-branded gear from appearing all over the nation's streets.