Unilever enjoys sales growth in China

17 December 2009

BEIJING: Unilever, the consumer goods company, expects its total sales to improve by a minimum of 15% in China this year, a trend partly attributed to rising levels of wealth in the country.

The Anglo-Dutch giant is one of the few multinational organisations with an almost nationwide distribution network in the Asian market, with Coca-Cola and Procter & Gamble being other such examples.

It has invested more than $1 billion (€687m; £614m) in China since 1986, where its portfolio includes Lipton tea, Lux soap and Signal toothpaste

For 2009 to date, the firm's revenues in the fast-growing economy have already passed €1bn, and are thus set to record an impressive uptick over the year as a whole.

"China is a destination for growth," said Alan Jope, the organisation's president in China. "I'm not doing a good job if growth doesn't reach 15% or 16%."

Migration from rural to urban areas is boosting purchases of goods such as cleaning products, he added, while the growing number of women working in offices is pushing up demand for beauty brands.

More broadly, Chinese consumers often regard making retail purchases as a pleasurable activity, rather than simply being a necessity, according to Jope.

"China is unlike other places in the world. Chinese people's number one leisure is shopping," he said.

Given the positive developments that are currently observable in the world's most populous country, Jope predicted that competition will be "intensifying over the next few years."
As part of this process, many domestic players are beginning to assert themselves more forcefully, against both local and global brand owners.

For example, BaWang Internationa has launched high-profile campaigns featuring Jackie Chan, the actor, and Faye Wong, the singer, in support of its shampoo, toothpaste and shower gel offerings.

Smaller cities are also attracting more interest, not only because they offer untapped markets, but as advertising rates can be cheaper than in hotly-contested areas such as Beijing and Shanghai.
Steven Chang, ceo of ZenithOptimedia Greater China, said "over the past few years, tier one has become so expensive that some of the clients, even the international ones, start with tier-two markets."

Data sourced from Reuters/Asia Media Journal; additional content by Warc staff