While Beijing and Washington are moving towards full-scale “trade war”, the American brands in China face an even greater threat – local competitors with innovative products and support from the Chinese government. This writes the Agency Reuters.
The dominance of the well-known American brands such as Apple, Starbucks and Pampers Procter & Gamble company, disputed. It could jeopardize hundreds of billions of dollars that American firms make in China.
According to a joint report by Bain and Kantar last year, local brands have captured almost three-quarters of the Chinese market of FMCG (Fast Moving Consumer Goods, FMCG) on 639 billion yuan ($97 billion). In 2013, they controlled two thirds of the market.
The market share of American goods such as Pampers, toothpaste and baby food Mead Johnson, over the past five years declined by about 10 percentage points. Data reflects the results of a survey of 40 thousand urban households.
At the same time, rapidly growing Chinese brands such as SeeYoung offering shampoo without silicone and Pechoin, a manufacturer of products for skin care.
In the past fiscal year, Apple earned in China $44.8 billion, P&G is about $5.2 billion, sportswear manufacturer Nike $4.2 billion.
The share of iPhone in the Chinese smartphone market remains at around 10% from 2012, show the data of the analytical company Canalys. In terms of market share of U.S. Apple bypass Chinese phone manufacturers such as Oppo, Vivo and Huawei.
Starbucks, which flourished in China against the background of the emerging coffee culture, said that the increase in comparable sales in the country slowed to zero in the second quarter of 2018, the Company cited the problem of delivery, but it also faced a growing wave of small, fast-growing local competitors in major cities of China.
Pressure due to increased competition and experience not only American, but also European brands.
In General, Chinese brands in last year received a large share of the market than foreign competitors, in 21 categories of consumer goods, such as tools for skin care, shampoos and baby food, the Bain.
Sales of local brands have jumped by 7.7% in 2017, compared with growth of 0.4% for their foreign competitors.
Meanwhile, the trade conflict between the two largest economies of the world escalates. As reported “Vesti.Economy” last week the US President Donald trump said that he had instructed U.S. trade representative to prepare a list of Chinese goods in the amount of $200 billion, against which there can be introduced an additional fee at the rate of 10%.
It happened after the state Council of China approved the introduction of an additional fee at the rate of 25% for 659 items us goods worth about $50 billion. the Actions of Beijing, in turn, were a response to the introduction of a US tariff of 25% on imports from China of products by $50 billion.
