WSJ: “Gone are the days when big multinationals in China could easily dominate every consumer segment from toothpaste to laundry detergent.
For years, companies such as Procter & Gamble Co. PG mainly had to worry about counterfeits, as their brands, such as Crest, were the hot items for the newly expanding consumer market.
That isn’t always the case anymore.
Take for instance a Chinese herbal toothpaste for whitening and sensitive gums. It sells for the equivalent of about $8.60, roughly double the price of Crest 3D White Vivid, one of P&G’s pricier brands. Yet the herbal toothpaste’s market share in China grew to 8.8% in 2011 from 1.1% five years ago, according to market research firm Euromonitor International. Over that same period, P&G’s market share in the toothpaste category fell to 19.7% from 20.8%. Toothpaste market share in China for Unilever NV, which sells the Zhonghua brand there, fell to 9.9% from 12%, according to Euromonitor. (In other markets, Unilever produces Close Up and Signal brand toothpastes.)
Industry insiders say losses of a point or two are small enough in the short term for foreign companies to manage. But the Chinese brand, made by Yunnan Baiyao Group Co., one of many local competitors gaining market share at the expense of foreign giants, is a sign of a changing consumer environment, some people say.
“P&G and Unilever will have to fight harder for shelf space and fight harder to differentiate from domestic brands that are now offering a wider range of products and features,” said Ben Cavender, a senior analyst at China Market Research Group.
Chinese companies like Yunnan Baiyao are gaining as they sharpen their branding.”
via Chinese Consumer Products Get More Competitive – WSJ.com.
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