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 week: KFC beefs up… Jane Zhang for Skoda… Jet-setting iPhone… GM, BMW conquer car sales… McLaren moves in… Moutai droops… Toilet restaurant?… Sotheby’s in Hong Kong… China’s “social traveler”… Luxury car seats… Counterfeit Red Bull… Moon view flights… and more.[more]
KFC China Now BFC China
Pity KFC. It’s been almost a year now since Yum! Brands’ chicken-based franchises went from a case study in localization taught in China business programs to a cautionary tale about the slew of quality-control problems faced by any brand in China.
First, KFC lost consumer trust after a scandal broke involving its chicken suppliers using antibiotics and hormones. Then came the H7N9 bird flu scare in the spring, which slammed KFC (as well as other chicken brands like Tyson). Adding insult to injury, in July KFC was (somewhat inaccurately) accused of serving ice cubes more tainted than toilet water. One can only hope to get so much out of a marketing partnership with Jeremy Lin, no matter how much China loves him.
KFC’s same store sales in August were down another 10 percent. At least that’s an improvement from the 13 percent same store sales drop in July. It appears the brand has finally realized that there is something deeply wrong with its core business in China. So it’s pulling out all the stops to try and fix it.
One response appears to be to move the brand away from chicken—and in a hurry. In KFC windows, custumers will now find large ads for the KFC Layers and Layers Tender Beef Burger (肯德基层层薄片嫩牛堡.) “Time to Beef Up” (“是时候来加强”) screams the tagline of KFC’s new campaign for a burger with not one, not two, not three, but six layers of beef.
Sure, the beef patties themselves are small, but the point is not.
A China Market in its Infancy
Along with a growth in car ownership in China comes growth in all those tangential industries fueled by a car culture. Proper (i.e. not a hose, bucket and rag) car wash operations now have regular street side presence. Tesco and Carrefour have aisles dedicated to lumbar supports, steering wheel cozies and dangly air fresheners. Decals, oh the decals.
Yet, even though “Baby on Board” (or, “Baby on Road”) signs are a regular sight in car windows, only about 1 percent of Chinese car-driving parents own a car seat. But a new Shanghai law may be about to change that.
Get ready to buy stock in high-end child carseat makers because if there is one thing Chinese families will spare no expense on, it’s their (often only) children; after all, bragging about your child’s school tuition is common in China. Combine that with the fact that Chinese consumers trust foreign brands far more than local ones and it’s a recipe for booming sales for foreign carseat makers.
More China News:
– Move over JLo and Fiat, pop star Jane Zhang (张靓颖) made a Skoda Fabia music video.
– Bloomberg looks at how iPhones get from China to the US. Hint: They do not fly coach on China Eastern.
– Don’t look now but China is importing more from the US than it’s exporting to the US.
– Shanghai’s Tang innovative art deco Cathay Theater “mansion” opens.
– Yeah, yeah, iPhone iPhone iPhone. What are the coolest Chinese smartphones?
– How much of China’s Red Bull is fake? If recent arrests are a sign, a lot.
– Meanwhile, the Louvre appears to have been hit by a fake ticket scam involving Chinese tour guides.
– Luxury brands turn to “appreciation” education campaigns.
– Reflections from Japanese car dealership owners a year after destructive anti-Japan protests.
– No longer just “China’s Foursquare,” what is the Jiepang Lifestyle? (It’s more than taking pictures of food.)
– The coolest bicycle handlebars in the history of bicycle handlebars are undergoing tests in Shenzhen.
– First there was Taobao insurance to see the moon. Now several Chinese airlines are offering moon viewing flights for the upcoming Mid-Autumn Festival.
– A (graphic) look at the rise of the Chinese “social traveler.”
– China’s auto market grew 10.3 percent in August.
– August was a record China sales month for GM and its joint venture partners.
– Laughing at the new iPhone models clearly has not ended in China.
– No dog days for BMW as August sales up 35 percent, crushing Mercedes-Benz and Audi.
– By 2020, half of all US automaker profits will come from China, according to a study.
– Haier moving into Poland.
– Marc Jacobs and H&M amongst foreign brands that failed recent (public relations staged) quality tests.
– Sotheby’s Warhol sale hits Hong Kong.
– Bayer is the latest foreign pharma brand getting eyeballed for “unfair competition.”
– Chinese designer Simon Gao’s limited edition collection is coming to the new Beijing Galeries Lafayette shop.
– Drop in price on once $260 a bottle Moutai is nearing 50 percent.
– Super car maker McLaren is now officially in China.
– Building in the bra cup and other lessons from the market for “Big Fat Chinese Weddings.”
– Are these the top ten craft beer bars in Hong Kong?
– Advertising spending growth expected to fall a point to 10.7 percent a year.
– Finally, How China is driving an increase in Jaguar/Land Rover sales.