US brands adapt in China

13 August 2009

BEIJING: Major US brands such as McDonald's, Starbucks and Frito-Lay are attempting to increase their sales in China by introducing products specifically developed for consumers in the country.

The Chinese fast-food and processed food sector is valued at $186 billion (€131bn; £113bn), and is becoming a major area of focus for multinational companies, particularly as a result of the financial slowdown in the US, Europe and beyond.

Shaun Rein, managing director of the China Market Research Group, argued that "if American companies don't figure out how to get it right in China, they'll be missing out on what should be their major generator for growth."

Frito-Lay, one of PepsiCo's biggest-selling brands in the Asian nation, offers a wide range of potato chips which are tailored to meet the individual requirements of this particular market.

Having conducted taste tests among Chinese shoppers, the company found that many of the flavours favoured by its customers in America proved unpopular.

As such, it developed a stable of new products, varying from a Sichuan spicy flavour to sweet and sour tomato and cucumber, lychee and mango.

Harry Hui, PepsiCo's cmo in the world's most populous nation, said "the market is extremely competitive, so there are many new products that are being launched regularly."

Tropicana, the company's orange juice brand, also sells cantaloupe juice in Chinese grocery stores, alongside its more traditional offerings.

Minute Maid, one of Tropicana's main rivals, and which is owned by Coca-Cola, similarly sells an aloe-flavoured juice product.

Among other such brands are Cheetos made to taste like strawberry and milk, orange-flavoured Chips Ahoy cookies, and a type of chewing gum, made by Wrigley's, resembling traditional herbal medicine.

In terms of fast-food, McDonald's, which has come under increasing pressure from low-cost rivals in China, has added a purple taro pie to its menu there.

Starbucks, the coffee house chain, also sells drinks with added jelly cubes, while KFC offers consumers the chance to buy spicy squid.

Crest has also manufactured a "lotus flower" toothpaste, while Colgate has produced a salty variant of its main brand in response to local tastes.

Data sourced from CBS News; additional content by WARC staff