from Access Asia's Weekly Update - 3rd of March, 2011
e-mail update from Matthew Crabbe [matthew@accessasia.ccsend.com] / Matthew Crabbe [matthew@accessasia.co.uk]
 Weekly
Update
|
What did Chinese Shoppers Do at New Year? They Went at it
Like Rabbits!
The western press is
China-inflation-obsessed (typographical inflation more like), but those
of us in the know (i.e. you lot) haven't fallen for their gross
generalisations of who is and who isn't severely affected by
inflationary pressure. Of course, our dearly beloved high consuming
urban middle class is largely blithely oblivious to inflation, except
for the odd whinge. And this past new year did they shop, or did they
shop? They did indeed shop - quite ferociously as it happens, at
generally high prices, paying very high consumption taxes and generally
getting done over! Others went on shopping rampages abroad that saw
Hong Kong run out infant formula and Singapore out of fancy handbags -
call the handbag emergency relief forces - more overpriced bags needed
urgently!!!
The new year holiday was
interminably long, just when you thought the last firework had scared
your dog, another went off with some muppet thinking lighting small
amounts of explosives will somehow lead to wealth - strange how, every
year, this mostly happens in distinctly unwealthy areas! Yet it was a
good year for China and its legions of shoppers, and most of its
retailers (excepting the dumb yanks at Home Depot and Best Buy,
naturally). 19% year on year growth (not much signs of inflation
bothering there), and only at 4.9%, down from its peak way back in
November, and still with a bit of deflation in non-food. Nowhere near
serious enough to stop your true, patriotic white collar urbanite from
shopping till they're fully harmonised.
One important component of
this New Year was online retailing - revenue from China's express
deliveries in January rose 29.5% y-o-y, with volumes reaching 250
million items, up 48.3%. Them's serious numbers. We also noted that
traditional gift packs stayed strong this year and boosted the booze,
tonics and a few other markets. So now we head into the rest of the
year with most retailers (sorry again Best Buy guys - leave the blue
polo shirts at the door on your way out) feeling buoyant and, it seems,
consumers too. For the moment, at least, the China consumer boom booms
on.
Sales were strong for a lot
of people. This LotteMart in Nanjing was packed when we visited over
the New Year, with bulging trolleys of mostly overpriced junk food, but
it was all being paid for!
And so this week's still
surging Access Asia Weekly Update includes a new report on Dairy
Products in China, as well as: new devious plots by rogue Haibaos
attempting to remain in Shanghai long past their sell by date
discovered; America's fiendish plan to make every monkey (as well as
every child) in China obese; twittering with Kim Jong-il; the latest on
China's drink driving campaign (that's a campaign to stop it by the
way, not promote it as yet more consumption); and one wine the
connoisseurs and vino speculators of the PRC will not be hoarding.
|
Access Asia Report News
Last week, we published our
new Online Retailing in China
report. This week, we published our updated report on Dairy Products in China. Next
week, we shall be publishing our update of Fast
Food & Consumer Catering in China. This month, we also
begin the task of compiling our next issue of the China Retail Quarterly, which will be out
in late March/early April. For information about these reports, or the
CRQ, contact us by return.
But, back to this week's
newly updated report on China's dairy industry. This has been an
industry rife with trouble, from its early introduction into the
Chinese diet. Initially promoted by the government, and interested
foreign parties, to help fill the calcium-light diet of many Chinese
people, and reduce the incidence of the associated health problems that
come with a lack of dietary calcium, the focus on dairy development has
been disproportionate to the previous and existing need, arguably. For
example, while a 200ml glass of full-fat milk provides 236mg of
calcium, a 100g serving of soya bean curd (doufu), a traditional part
of the Chinese diet, provides 510mg of calcium, according to the UK's
Food Standards Agency.
The expedient of filling
the lack of calcium in the Chinese diet created the opportunity for a
mass push by foreign dairy companies into China, and the growth of
domestic dairy groups that have since become very large concerns. But
that rush to develop created grave systemic failures in its wake. We
have spoken often in this newsletter about the melamine scandal of
2007/2008, but prior to this was the 2004 baby milk powder
"event" where milk powder so poor in quality was sold that
infants literally starved to death because the milk powder was so low
in protein.
The systemic problems that
created these issues have not entirely disappeared either. Despite most
large dairy companies in China now investing in developing their own
dairy herds in order to improve raw material supply, most still also
rely on the small-scale farmers who, owing to lack of skill and
resources, still often produce raw milk that is of low quality, thus
continuing to create the potential for tampering to make that milk more
economically lucrative.
As we discuss in the
report, the problem of the assault on breastfeeding by manufacturers of
infant formula milk continues in China, as it does in many developing
economies, despite there being explicit laws banning them from
marketing or advertising to expectant mothers and health professionals,
and providing incentive packages to promote consumption of milk formula
over breast milk.
Despite all of this, the
dairy market has recovered somewhat since the 2007/2008 problem,
although many Chinese shoppers still buy powdered milk via the Internet
from Hong Kong and elsewhere, or buy imported products because they
simply do not trust what is in the domestic product. That continued
lack of confidence has meant there is a persistent weakness in the
market. A result of this is that many smaller dairy companies are
losing out to those with larger economies of scale, or are bought up by
them. Such consolidation in the industry does provide for improved
quality of supply and accountability perhaps, but the industry still
has a long way to go to win back the trust of its consumers.
|
Rogue Haibao Alert...
They're Hiding in Plain Sight!
Despite concerted efforts
to remove the menace of rogue Haibaos from society ('de-harmonisation'
of Haibaos, as it's officially termed), they are proving a far more
aggressive and determined pest than the five dumb whatevers that
infested Beijing during the Olympics. We've shown you pictures of
Haibaos infiltrating the city via the Maglev, hiding behind trees,
brazenly walking on the grass in a Chinese park (cue mad Little Napoleon's
in cheap Parkie uniforms with whistles and waving arms!!). Now here we
see an example of the daring 'hide in plain sight' strategy, while
attempting to pass yourself of as really an integral component of
Chinese history. Very cunning, but not cunning enough for Access Asia's
Haibao alert reader who sent us the evidence.
So, here we have the God of Wisdom, God of Longevity, God of
Wealth and God of Anthropomorphic Condoms.
|
A Step too Far...
Even for US...
China's Fat Monkeys
OK, so we're the guys who
wrote a book about obesity in China (Fat China), but at least we
confined ourselves to overweight humans. But what about the hidden
problem of fat monkeys in China? Who's gonna do something about that,
man?!
Apparently cheap
facilities, lax rules and, most importantly, a distinct lack of animal
rights protestors, is making China a popular place to conduct tests on
new anti-obesity drugs - by making monkeys fat!!! But it's OK, as usual
we can blame the Yanks - they started it, according to the New York Times, which used to be a
reputable newspaper, but is now some pages wrapped round a free China
Daily insert!!
At the Oregon National
Primate Research Center, monkeys are routinely fattened to twice their
normal weight to test weight-loss and diabetes medications for humans.
They are jammed full of peanut butter, popcorn, peanuts and
fruit-flavoured punch made with high fructose (i.e. what people who
travel on Amtrak eat, we've noticed).
However, in America the
monkey fatteners are in trouble with the animal rights people, so
what's the answer? According to a certain monkey fattener called Dr.
Grove, '...using obese monkeys is a growing trend, especially in
countries like China where pharmaceutical research is cheap.'
Bring on the fat monkeys...
A big-gutted monkey
|
DPRK News...
Kim Jong Twitter
Are you signed up to North
Korea's Twitter feed? Of course, if you're in China, Twitter is banned,
and nobody except a few generals have the Internet in North Korea, so
it's all a bit daft. But, hey, for those who live their sad little
lives on the Internet, it's probably exciting. One thing you've got to
concede, those crazy North Koreans now targeting Twitter and,
apparently YouTube (also blocked in China - well how else do you think
they'll get Youku's share price up), are witty:
Hilary Clinton described as
the 'Minister in a skirt' - a bit rich coming from a country whose
leader's bouffant hairstyle in somewhat, let's be frank here, gay. And
anyway, she favours pant suits! So ya boo.
Still check it out - look
on Twitter and YouTube for 'uriminzokkiri' (catchy huh?)
|
Access Asia Readers Letters...
So How's That Drink Driving Campaign Going?
Dear Access Asia
You guys are fabby, and
really cool. Last year you noted the new anti-drink driving campaign in
China that was cracking down on the phenomenon of drunk officials and
their feckless offspring roaring around the streets of Chinese cities
shouting their father's names at everyone. It was great to see China
tackling a serious social nasty, like drink driving, seriously. How's
that campaign going?
All the best, a devoted
reader
Access Asia replies:
Well, dear reader, we think
the campaign is going just fine. So well that the roadblocks,
breathalysers and watchful cops appear to have done their job and gone
home. And there are lots of great business opportunities in motoring in
China. Just check out this story we read recently:
Chinese media reports
this week that the state-owned petroleum giant Sinopec has signed an
agreement with Domaine de Chevalier to sell French wine at 110 Sinopec
"Easy Joy" convenience stores throughout China. According to
the Shenzhen Express News, with the growing number of cars on the road
in China, retail industry experts say that new drivers demand "more
diversified services" from gas station owners, which has led major
companies like Sinopec to sign food and beverage agreements with
McDonald's, KFC, the Yunnan Tea Group, and Moutai in recent years.
So, great! Easy access to
wine and Moutai for all careful drivers!! Let's get those in-car cork
screws on the market as soon as possible!! With initiatives like these,
how can the anti-drink driving plan fail??
French wine/Chinese petrol - spot the difference??
|
And Finally...
One Wine Brand You Probably Won't Find Down the Sinopec Station
"Lafitte,
Lafitte", the wine lovers of China cry, "where is our
Lafitte?" (just below les ankles mates!! Gedditt??).
And all sorts of wine is
selling well at the moment (not just the Lafitte). All thanks to people
showing off, speculation, nouveau riche Chinese Essex Boys, a country
that hasn't worked out that 'yuppie scum' is an insult and not an
aspirational role model yet, etc. And yet, we feel, one brand of wine
may not be sitting in the cellars of many viticulture-appreciating
corrupt cadres who spend their ill-gotten gains on vino:
Not that the Taiwanese, it
appears, are all that sophisticated either. The wine glass accompanying
the bottle looks just like our builders tea mug!! Cheap wine out of a
mug... How very Sunday in Sunderland...
|
Note
If you want to receive this
newsletter by e-mail, please click here,
or e-mail us on the link below. We will not necessarily confirm
receipt, but will certainly add your address to our mailing list.
|
|
|
|
|
|
|
|
|
