Origin food overrules brands for Chinese consumers - James Roy

James Roy

The origin of food is key for Chinese consumers, since brands can be made everywhere, including China, says retail analyst James Roy in FreshPlaza. "Brands are almost no longer important to the Chinese consumer when it comes to food, as long as the product's origin is foreign."

FreshPlaza:

Affluent Chinese will always choose imported products over local ones, said James Roy, a business analyst at China Market Research Group. Brands are almost no longer important to the Chinese consumer when it comes to food, as long as the product's origin is foreign. 

"For foreign food and agriculture brands, it's really important to emphasize where they are manufactured, and to show where it comes from," said Roy. 

Governments are encouraging their exporters to take advantage of such demand. During a visit to promote agricultural products in China earlier this year, EU Commissioner for Agriculture Phil Hogan said that an estimated 3 million jobs in Europe already directly depend on export sales to China, many of them in the agriculture sector.

More in FreshPlaza.

James Roy is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more branding experts at the China Speakers Bureau? Do check out this list.

Youngsters: more nationalistic - James Roy

James Roy

American companies and stores like KFC and Apple faced angry crowds after an international court ruled against China on its South China Sea policies, even smashing their iPhone's. A protest that went even too far to China´s government. It is mostly the younger who are more nationalistic and patriotic, says retail analyst James Roy to AP.

AP:

"This is not the right way to express patriotism," the state-run Xinhua news agency wrote on Wednesday. The slightly more independent China Daily called the device smashing "jingoism that does a disservice to the spirit of devotion to the nation." 

"The Chinese public, as optimistic and positive as they are, are deeply patriotic and nationalistic, especially people who are younger," said James Roy of the research firm China Market Research Group. Apple is one of the brands that is "just very closely associated with the United States, and you are seeing people picking the closest symbol they can think of to demonstrate against," according to Roy.

More in AP.

James Roy is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more experts who can help you to manage your China risk at the China Speakers Bureau? Do check out this list.

Yum: selling fast food in a contrary market - James Roy

James Roy

Yum, with brands like Pizzahut and KFC, had a hard time because of food scandals. But worse is, says retail analyst James Roy to Bloomberg, is that increasingly heath-conscious consumers do not want their food anymore.

Bloomberg:

“They’ve made progress in China but that’s really from hitting rock bottom a couple of years ago after their food safety scandal,” said James Roy, a senior analyst at China Market Research Group. “They face a larger issue in the market with Chinese consumers becoming more health-conscious and moving away from fast food.”

More in Bloomberg.

James Roy is a speaker at the China Speakers Bureau? Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more experts helping you with your China risk? Do check this list.

Rising labor costs and lower sales growth drive outbound expansion - James Roy

James Roy

Haier´s purchase of GE´s appliances and Midea´s efforts to get a bigger stake at Germany´s robotic company Kuka both reflect the challenges the giant Chinese firms face at home, says business analyst James Roy to Barron´s. Rising labor costs and slowing growth of domestic sales makes both look abroad.

Barron´s:

James Roy, an analyst at consultant China Market Research Group, says the deals represent two very different ways in tackling the challenges both face. For Midea, “labor costs are continuing to rise and the pool of available workers shrinking over time,” Roy tells Barron’s Asia. A number of Chinese provinces have lavished annual increases in minimum wages, while an ageing workforce and preference for services jobs are also draining the talent pool. A quick hunt through Midea’s annual financial reports indicates wages as a percentage of sales costs have risen exponentially over the last few years. 

That’s been eating in to Midea’s bottom line. The company’s traditionally focused on the low-to-middle end of the Chinese market for appliances like refrigerators and washing machines, which typically have lower margins. ... 

The rationale behind Haier’s purchase of GE’s appliances business looks simpler to decode. The company’s battling similar headwinds to Midea, namely sluggish domestic sales due to the Chinese economy’s slowdown. In fiscal 2015 its total revenues slumped by about 5%. A recent fightback in China’s property market hasn’t brought much reprieve either, given the rebound’s been mostly confined to top tier cities like Shanghai and Shenzhen. Haier bills itself as the world’s biggest white goods maker, with global market share of 10%, but the vast majority of this comes from China. Estimates put Haier’s U.S. sales at a tiny 1% of its overall revenue. GE “gives them access to a higher end segment than they’ve previously been able to get to through their own self-branded products,” explains China Market Research’s Roy.... 

Still, there’s more both Midea and Haier could do to clean up their act. China Market Research’s Roy reckons both have been slow to catch up with new trends in home appliances, or have made missteps here in the past. Case in point: Both Haier and Midea have been slow to the punch when it comes to new offerings like air purifiers – products with obvious captive markets given the poor air quality in Chinese cities. Additionally, dryer machines, for example, just haven’t caught on given locals’ propensity for hanging clothes out of windows to dry. Roy thinks by bringing more international expertise into the fold, the pair is more likely to avoid being taken to the cleaners in future. “There’s a growing comfort among large Chinese companies to acquire other companies and learn from their best practice,” he believes. “There’s a realization that they need to learn more international know-how.”

More at Barron´s

James Roy is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more experts on China´s outbound investments? Do check out this list.  

Related articles

• The global road of China´s white goods producers - James Roy
• Buy Robot: Silicon Valley Misses Out as China Nabs Kuka
• Rise of the machines: Robots wipe out 60K jobs at Taiwanese factory
• Innovation experts at the China Speakers Bureau (updated)
• Midea Makes $5 Billion Bid For German Robotics Company

Disney might win in China - James Roy

James Roy

Chinese did not grow up with Mickey Mouse and Snow White, but American content might still do very well in China, says retail analyst James Roy. Even when the government prefers Chinese myths over US imperials, he tells the International Business Times.

The International Business Times:

Conservative nationalists may have called for Chinese people to shun an attraction that remains deeply based on American culture. But with Disney, Pixar and Marvel movies highly popular in China, experts say it is precisely Disney’s original American content and long history that give it the upper hand over Chinese attractions. 

“With [its] original famous characters, Disney has a very strong [draw,]” said James Roy, principal of Shanghai-based China Market Research. “Wanda is local and may be more accessible and moderately priced — but it’s a property company getting into the business, it lacks IP and know-how." 

"Disney invented what they’re doing,” he said.

More in the International Business Times.

James Roy is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more experts on managing your China risk at the China Speakers Bureau? Do check out this list.  

Related articles

• Mickey Mouse Artifacts from the Dawn of Disney Are Up for Auction
• The world of Disney-themed wallpaper
• Airfares to Shanghai may Shoot up Once Shanghai Disney Resort Becomes Operational
• Vintage Mickey doll, Disney Studios desk up for auction

The global road of China´s white goods producers - James Roy

James Roy

Washing machines might not be as sexy as real estate and IT-investments, but China´s white good producers have also embarked on a global road, says business analyst James Roy to Reuters. Haier has been investing abroad for decades, but others are following.

Reuters:

Haier is not alone. Major Chinese white goods makers such as Hisense Electric Co Ltd (600060.SS) and Midea Group Co Ltd (000333.SZ), have been on an overseas spending spree this year, as they seek to snap up foreign brands to tap faster-growing markets as growth slows at home. 

"Access to other markets helps them find new sources of growth as the domestic market slows," said James Roy, associate principal of Shanghai-based China Market Research Group. "It's also an opportunity to gain additional know-how to succeed in China, where competition is becoming fairly intense." 

For rivals such as Whirlpool Corp (WHR.N), Electrolux, LG and Samsung Electronics (005930.KS) - some of the biggest names it will come up against in the United States - one aspect of Haier's rise in Australia will give some cause for comfort. Despite integration of their sales, logistics and customer care operations, the deal has yet to lead to larger market share gains for Haier’s own brand, highlighting challenges the group faces as it seeks to build market share in the mid-tier segment of the market.

More at Reuters.

James Roy is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more experts on China´s outbound investments? Do check out this list.  

Services and consumption will drive growth - James Roy

James Roy

Manufacturing is - as planned by the central government - down, but services and consumption will keep economic growth for the rest of this year at 6.4, 6.5% says business analyst James Roy to Money Control.

Money Control:

Latha: I was wondering whether you will worry about the fact that loan growth has almost doubled to 1.3 trillion yuan as our guests have been telling us. There have been huge problems or huge worries over Chinese indebtedness and the problem of bad loans not being addressed not even being recognized, will this growth in loans be something that markets will start worrying about in the days to come? 

Roy: I think we could see loan growth worries continuing to increase going forward. But in terms of the consumer component of the economy, we still are seeing very strong signs here. Bad loans have had been an issue in China and if they are not addressed, they can continue to be pretty serious drag on the economy. So, I think they will see increased attention to this going forward. 

Reema: We know that the Chinese government is trying to move the economy from manufacturing to consumption. Does the recent data including this throw any light and how much of the growth in account of manufacturing and how much of it is in account of the new focus area of consumption and services? 

Roy: Yes, so manufacturing has been slowing for some time now and it is at around 6 percent or slightly lower now while you are seeing consumption at a higher level at around 8 percent, agriculture down closer to 4 percent, but now services for the first time ever in China greater are than 50 percent of GDP. So you are now seeing services and consumption account continue to be the main drivers for Chinese growth going forward.

More at Money Control.

James Roy is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

E-commerce is one of the services boosting China´s growth. Are you interested in having more e-commerce experts as a speaker from the China Speakers Bureau? Do check out this list.

One of the sources of growth is going to be the merged conglomerate of Beijing, Tianjin and Hebei Province. Journalist Ian Johnson discusses the emergence of this megacity.
 

Related articles

• 2022 Winter Olympics in China to be 'Fantastic, Extraordinary and Excellent'
• Alibaba sold $462 billion of goods in 2015
• Alibaba Is Getting In On The 'Smartcar' Market with First Model Set to Debut Next Month

Chinese consumers prefer German over American brands - James Roy

James Roy

Especially in the car industry, American brands are fighting heavily with their German competitors. And the Germans are doing better tells retail analyst James Roy to Bloomberg.

Bloomberg:

Mainland buyers have traditionally equated luxury with German nameplates. Volkswagen-owned Audi is China’s top luxury brand, with 30 percent of the high-end market in 2015; BMW is No. 2, with 25 percent; and Daimler’s Mercedes-Benz line is third, with 20 percent. 

Cadillac is far behind, tied with Chinese automaker Geely Automobile Holdings’ Volvo at No. 6—they each commanded 4 percent of the market last year, according to Bloomberg Intelligence. Lincoln had less than 1 percent. “There really is a solid association in Chinese consumers’ minds with the premium German brands,” says James Roy, associate principal of China Market Research Group. “American cars are viewed as fine and good and functional, but they don’t have that premium image.”... 

President Xi Jinping’s campaign against corruption and conspicuous consumption among officials may also provide an opening for U.S. cars. “Consumers are trading down,” says Roy of China Market Research Group. “People are not looking to be as obvious or flashy with their wealth as before.”

More in Bloomberg.

James Roy is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more branding experts at the China Speakers Bureau? Check out this list.  

Related articles

• No Cadillacs for Old Men in China
• Geely Launches .Auto Website
• Hyundai to take on BMW and Benz
• Cadillac Attracts Younger Men in China

International tourism: key growth industry - James Roy

James Roy

Despite a relative slowdown in economic growth, international tourism has seen more Chinese than ever before. Preferences for other luxury expenditure is slowing down, says retail analyst James Roy to the VOA.

The VOA:

Over the last five years, the number of Chinese travelers doubled to 120 million people; one in ten international travelers is now from China. 

James Roy, a Business Analyst at China Market Research Group, said Chinese tourists are now traveling farther, and to many more destinations. “You know in the past where it was more about buying an expensive watch or a bag, and showing that off, now it’s much more about sharing on social media all of the exotic places that you’ve been to,” Roy said. 

The number of tourists into China also grew, but slightly, at just 2.2 percent in 2015. Tourism supported 65 million jobs in China, and made up 7.9 percent of the country’s gross domestic product. Nearly 57 million foreign travelers came to China that year, spending more than $57 billion.

More in the VOA.

James Roy is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more experts on luxury goods at the China Speakers Bureau? Do check out our list here.

New York Times journalist Ian Johnson discusses the spiritual values Chinese are looking for today.

Related articles

• US Economy Slowed in 4th Quarter, But Not as Much as Predicted
• Chinese Consumers to Spend More on Premium Products
• The modern Chinese consumer: three things you should know
• China under Xi: the party or the economy - Arthur Kroeber

Can the iPhone SE succeed in China? - James Roy

James Roy

Apple tries to take on domestic smartphone competitors in China by launching its cheaper iPhone SE. But the jury is still out on the question whether that is a smart move for the premium brand, says retail analyst James Roy to the VOA.

VOA:

Sales have stagnated at Apple. In January the company forecast a drop in sales for Apple products, which would be the first decline since 2003. To boost purchases the company is targeting new customers in China, its biggest market, and India, its fastest growing. 

James Roy, a Business Analyst at China Market Research Group, said Apple is now challenging Chinese smartphone brands in their home market. 

“At this point you have a number of Chinese smart phones that have gotten very good at offering good smartphones at the lower to middle end of the market,” he said.

More at the VOA.

James Roy is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more branding experts at the China Speakers Bureau? Do check out this list.  

Related articles

• Xiaomi Denies Plans of IPO for Expansion
• Mobile payments driving adoption of fingerprint tech by Chinese smartphone vendors
• Samsung, Lenovo, Xiaomi crowned top 4G handset brands in India in 2015: Report
• Orders will reveal all on Apple's iPhone gamble
• New iPhone 'Too Small, Too Expensive' For Newer Markets

The countryside: the last online market to conquer in China - James Roy

James Roy

Alibaba has this Chinese New Year started to conquer the rural markets, one of the few in China where the majority is not yet online, says retail analyst James Roy in Channel News Asia. One of the key products is imported food, as many Chinese mistrust locally made food.

Channel News Asia:

Analysts said the focus on regional specialties this Lunar New Year is part of Alibaba's all-out attempt to capture the largely untapped rural e-commerce market. 

"The majority in the cities are already shopping online. Despite lower internet penetration rates, the rural areas represent a huge untapped market and Alibaba has been working to expand its logistics network in these parts of China," James Roy, associate principal at China Market Research Group (CMR), said in a telephone interview. 

"The real purpose of Alibaba's campaign is about encouraging rural farmers and consumers to warm up to the idea of e-commerce," Shanghai-based Mr Roy added. 

According to CMR, increased demand for imported food is part of a larger trend among Chinese consumers who are willing to pay a premium for Western experiences. A series of food safety scandals since 2008 sapped consumers' confidence in locally-produced baby products, prompting young Chinese parents to look abroad. 

"Apart from fear of poor food quality, people are exposed to more things as they travel, and they get more adventurous with tasting new food. Consumers, especially women under 40, are also becoming more health-conscious. It's not just about having a well-balanced diet, but they are reading up on nutrition and looking at super-food," Mr Roy said.

More in Channel News Asia.

James Roy is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more experts on e-commerce at the China Speakers Bureau? Do check out this list.  

Related articles

• CIBC to Offer Chinese New Year Gold, Silver Monkey Coins
• The year of the golden monkey
• Chinese New Year rush: Woman has 'rockstar' treatment as sole plane passenger - Telegraph
• Ctrip prepares for bumper Chinese New Year demand
• Celebrate Chinese New Year!

How Adidas beats Nike in China - James Roy

James Roy

After the Beijing Olympic Games in 2008 Adidas lost traction in China. But it has come back, and is even beating Nike in the second-largest sports wear market. Retail analyst James Roy tells Quartz how Adidas did that.

Quartz:

Adidas can take heart in one important metric: the speed of its market share growth in the Greater China region (which includes Hong Kong, Macau, and Taiwan). There, at least, Adidas has outperformed Nike—and significantly closed the gap. From the beginning of 2011 to the start of 2015, Adidas improved from 8.5% to 13.8% of market share, compared to 11.2% to 14.3% for Nike, according to Euromonitor. 

That’s important because, after the United States, China has the world’s largest sportswear market, well ahead of Japan, Brazil, and Germany. In the first nine months of last year, Adidas’s sales in Greater China grew 18.4% compared to 2014. 

Adidas lost ground in China when it experienced oversupply problems following the 2008 Beijing Olympics, which didn’t spur market growth as much as anticipated. But the company “caught up pretty impressively over the last five years” James Roy, a retail analyst with China Market Research Group, told Quartz. It accomplished this partly, he said, by tightening links with sellers to ensure it was “resupplying the products that were really selling the best.”

More in Quartz.

James Roy is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more branding experts at the China Speakers Bureau? Do check out this list.  

GE-deal upward boost for Haier brand - James Roy

James Roy

Haier might be the largest white good manufacturer, globally active, but is not yet seen as a global brand. The purchase of the appliances section of GE for US$5.4 billion might just change that perception, says James Roy, Associate Principal of the China Market Research Group (CMR) in the International Business Times.

The International Business Times:

Haier, the world's No. 1 manufacturer of white goods by volume, has little more than 1 percent of the U.S. market. It is one of the reasons why it was able to win the deal -- a previous sale of GE Appliances to Sweden’s Electrolux was opposed last year by U.S. antitrust regulators, who said the merged company's significant combined market share would lead to higher prices. 

“The GE deal would give Haier a stronger brand,” James Roy, associate principal at China Market Research Group in Shanghai, told International Business Times. “The company is a big player, but it has struggled in brand positioning, particularly in the U.S., where it’s seen as mass market.” 

Even in the Chinese market, Roy said, it's seen as a volume maker. Haier is always present, and reasonably priced, with a service infrastructure that people respect for its scale and reliability — but it's maybe not something people get excited about. "We haven’t seen them making the kind of innovative moves we’ve seen from a brand like [smartphone maker] Xiaomi , which has leapfrogged competitors by introducing its own brand air purifiers, for example," Roy added. 

Zhang Ruimin, who has spoken of his desire to turn Haier into a “great company," has long emphasized the importance of innovation, experimenting with innovative management structures in the company, and seeking to invest in smart devices, such as 3-D printed air conditioning units. 

The takeover, experts say,  aims to take Haier to the cutting edge, giving it not just GE's brand name but also its software. "GE is famous for its strong emphasis on best practice, and Haier could learn from its innovation culture, too,” Roy told IBT... 

(Haier) will require all of its flexibility to make a success of running one of the world’s oldest and most respected household appliance brands. China Market Research Group’s Roy said the example of Lenovo, which took over IBM personal computers and is now a market leader in the sector, is a promising one -- if Haier approaches its acquisition in the right way. 

“I could see it working if they don’t squander GE's brand equity," he said. "As long as they don’t look at this as a vanity acquisition, and are willing to learn from GE, they could make this work."

More in the International Business Times.

James Roy is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´ request form.

Are you looking for more branding experts at the China Speakers Bureau? Do check out this list.  

Related articles

• Xiaomi CEO not concerned about declining sales
• Arrest Fosun chair shocks private sector - Rupert Hoogewerf
• China Technology Innovation Comes of Age