News » China » Cosmetics giants brush off any talk of slump in China

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• Cosmetics giants brush off any talk of slump in China
• Green policies to color future world trade environment
• Sovereignty protection 'proper and necessary': FM
• Top legislator urges implementation of congress spirit
• China suspends imports of nuts from US Sunland
• N China restaurant explosion kills at least 8
• China operations for sovereignty protection "proper and necessary": FM
• Top legislator urges implementation of CPC national congress spirit
• China publishes map of Sansha
• Xi Jinping promotes PLA general
• China bans hospitals from turning away HIV/AIDS patients
• China publishes map of Sansha
• Xi Jinping promotes PLA general
• Chinese KMT Revolutionary Committee Central Committee meets
• Scenery of Tibet's 2nd largest city
• Chinese defense minister meets with Latvian counterpart
• Hangzhou's first metro line to start operation
• Xi Jinping promotes PLA general
• World's highest-altitude civilian airport to start operations in May
• Moderately prosperous China brings opportunities to world economy

Cosmetics giants brush off any talk of slump in China Posted: 23 Nov 2012 12:19 PM PST You don't need a crystal ball or an industry analyst to tell you that the 13-percent drop in imports of cosmetics into China for the first half of this year was probably a blip. True, the volume of cosmetics imports dropped heavily compared with the same period last year, according to the China Luxury Report 2012. But retail sales of cosmetics in China rose 16.5 percent in the first 10 months of the year, totaling 107.7 billion yuan ($17.3 billion), compared with the same period last year, according to figures from the National Bureau of Statistics. "The market is still growing, but just at a slower pace than in previous years," said Wang Jiajun, an analyst with China Market Research Group of Shanghai. But the strongest evidence that China's cosmetics industry is coasting, comes from the massive expansion plans being made by some of the industry's biggest international companies — such as Estee Lauder Companies Inc and Mary Kay Inc of the United States and Shiseido Group of Japan. Industry figures show there are more than 5,000 cosmetics companies in China, 90 percent of which are small or medium-size domestic brands. However, international brands have a market share of more than 80 percent, according to Global Entrepreneur, a leading business magazine in China. A recently published report, Beauty and Personal Care in China 2012, by Euromonitor International Ltd, highlights how multinationals offer more brands and products across a range of categories and prices. Estee Lauder, which sells 12 of its 28 cosmetic brands in China, is arguably making the biggest splash among those multinationals, by doing what many companies rarely attempt — introducing an entirely new brand. Known for its Estee Lauder, Clinique and Bobby Brown brands, the company has introduced a new line called Osiao, which specifically caters to Chinese consumers. Osiao was launched in Hong Kong in November and is expected to be launched in the mainland in early 2014. "China has become the company's third-largest market following the United States and Britain with a turnover of $500 million in the 2012 fiscal year that ended June 30," said Fabrice Weber, president of Estee Lauder's Asia-Pacific division, in an interview with 21st Century Business Herald. Apart from major cities such as Beijing, the company is focusing on high-end consumers in second- and third-tier cities. Since 2002, when the company established a Shanghai office, Estee Lauder products have been sold in around 60 Chinese cities. This year China surpassed Japan as the company's hottest sales region in Asia, with 28-percent growth in sales, the company said. "European and US brands are very strong in the higher-end market as they are viewed as having superior technology, such as anti-aging creams, and quality," Wang said. "Consumers trust these brands a lot more and are willing to pay high premiums for them." Another of the mainland's cosmetics mainstays, Shiseido, which has been operating in China for 31 years, is aiming to take its domestic sales revenue above 100 billion yuan by early next year. The first overseas cosmetics maker to enter the mainland market, it sells a wide variety of products ranging in price from dozens of yuan to nearly 5,000 yuan. Late last year, Shiseido began to sell its Pure&Mild brand products online, and early this year it began selling its products on Tmall.com. Estee Lauder, its biggest competitor, grew its online sales by 40 percent in China in the fourth quarter of fiscal year 2012, and is already reaching online consumers in nearly 350 Chinese cities. "Even though the online channel only accounts for a small percentage of sales, it is growing the fastest of all," Wang added. "Brands need to have a strong online store, either self-operated or through e-retailers such as Tmall and 360buy." In keeping up with market trends, Shiseido has maintained annual double-digit sales growth in China since 2004. Sales reached 89.1 billion yuan for the year ending March 31. "China now accounts for 11 percent of our global business," said Yang Yan, general manager of public relations at Shiseido China Co Ltd. Shiseido's beginnings in the mainland go back to 1981 when it first sold about 60 imported products at large retail outlets and hotels in Beijing. It launched Aupres, a brand exclusively for department stores in China, in 1994. The 140-year-old company established Shiseido China Co Ltd, a wholly owned subsidiary, in Shanghai in 2003, after starting production at its own factory and opening Shiseido China Research Center Co Ltd, both in Beijing. "We have more understanding about local consumers and have also gone ahead in creating special products for Chinese consumers," said Yang, explaining Shiseido's advantages on its competitors. Shiseido has also recently expanded its sales channels into specialty cosmetics stores that are more popular in lower-tier Chinese cities, selling mostly its Urara and Pure&Mild brands. It now has contracts with more than 5,900 stores. "It gives us a convenient way to have contact with consumers, especially in smaller cities," Yang added. "I think one very important concept that can explain the success of a brand regardless of its origin, is its sales channel strategy. "Currently, the bulk of our sales are still being made in department stores or retail outlets such as Sephora. "Asian brands are more focused on all-natural products that enhance appearance, for example, with hydrating lotions or skin-whitening creams, which are very attractive to younger consumers in the 15-30 age group who are less focused on maintaining their youthful appearance." But Mary Kay, the direct cosmetics seller, takes a different approach to building sales in China. It emphasizes customer service instead of simply expanding sales channels. "We are arriving in homes to provide a service for each customer," said Paul Mak, president of Mary Kay in China. "Faced with the burgeoning online retail market, we are competing with other companies on the one-to-one, face-to-face basis." Mary Kay established its first overseas factory in Hangzhou, Zhejiang province, in 1995. It is now working on the second phase of its manufacturing center in the city, believing that China will surpass the US to become its biggest market next year. Mak said that China has become Mary Kay's largest overseas market, adding that its sales force is crucial to its direct sales. The company's sales volume in China increased 55-fold between 1999 and 2011 and its workforce tripled. Though it is sticking to its direct sales channel and developing the strengths of its salespeople, it is also introducing innovative products to the market. "Targeting big cities, we launched the higher-end product line TimeWise Plus in July, as we realized that consumers in Beijing and Shanghai are paying more attention to premium goods as they trade up and enjoy higher incomes," Mak said. In smaller cities, Mary Kay's marketing strategy sees it sending out distinctive fleets of pink buses to introduce its product lines to consumers, which allow them to try out the products onboard. Wang Jiajun from China Market Research Group said customer service remains crucial to the cosmetics industry, He added that a big part of that involves staff training, and that cosmetics giants need to train their salespeople, or beauty assistants, in how to recommend products, and push sales. "Many purchases are still impulse purchases, and many consumers want to learn more about products," he added. "They will simply walk away if staff cannot inform them." Xu Junqian contributed to this story.

Green policies to color future world trade environment Posted: 23 Nov 2012 12:19 PM PST Nation views low-carbon rules as powerful way to gain competitive edge The booming green orientation in the global economy, including the trade in environmental goods and carbon tariffs and certification advocated by developed economies, has begun to take an increasing toll on China's foreign trade, a senior official said. Meanwhile, boosting the green sector at home has become an important step for China to develop a new competitive edge in foreign trade and is in accordance with the country's restructuring of its economic growth model as underscored in the 12th Five Year Plan (2011-15). "Low-carbon development is now having a more obvious influence on China's foreign trade," Wang Shouwen, director of the foreign trade department of the Ministry of Commerce, told a seminar during the China International Green Innovative Products & Technologies Show 2012, held earlier this month in Guangzhou. "Developed economies such as the EU and the US have actively promoted carbon tariffs and carbon certification, having an increasing potential effect on Chinese exports. In addition to the trade policies of developed economies, business activities of transnational companies will affect Chinese foreign trade as they now prefer low-carbon products in their procurement," Wang said. Though the US Congress did not pass the American Clean Energy and Security Act of 2009, it could become law in the future and entitle the government to impose carbon tariffs on Chinese exports beginning in 2020, according to Wang. It would affect Chinese exports in 46 industries including steel and nonferrous metals. EU Climate Action Commissioner Connie Hedegaard announced the suspension of the enforcement of the EU Emission Trading Scheme on all international flights to and from the EU until September 2013 to give the International Civil Aviation Organization time to find a global solution to aviation emissions. "If China paid that tariff, it would add 2,000 yuan ($321) in transportation costs to each ton of cargo and lower the profit of export businesses by about 2 percent," Wang said. In 2010, Chinese exports to the EU totaled $311.24 billion, and 17.31 percent were carried by aircraft. Zhou Maorong, deputy head of the Institute of International studies at Wuhan University, said that "the EU's strategy of seeking carbon tariffs from a specific industry will create a heavier burden to Chinese foreign trade than moves by other developed economies". "If the EU were to impose tariffs on aviation, and emission reduction into ocean transportation industries, this would surely have a great impact on Chinese exports, as Chinese exports through ocean shipping account for one-fifth of the world's total," Zhou said. However as rising costs of labor and land, and the appreciation of the yuan weakens the traditional advantages of Chinese foreign trade, the promotion of the green sector can also serve as the driving force for the country's trade to develop a new competitive edge, Wang said. "In the next step, the ministry will closely watch and analyze the developed economies' trade policies regarding the green economy and low carbon," Wang said. Yao Weiqun, associate president of Shanghai WTO Affairs Consultation Center, said China needs to enhance technological innovation to increase added value in environmental goods while importing advanced technologies to boost green sectors. The Asia-Pacific Economic Cooperation 2012 summit, held in the eastern Russian city of Vladivostok in September, saw leaders agree on a list of 54 green technologies that will be subject to import duties of 5 percent or less by 2015, which "brings new opportunities for Chinese exporters amid challenging global trade", according to Commerce Minister Chen Deming. Central and local governments have been making more of an effort to develop green sectors and boost industrial upgrading. The Ministry of Industry and Information Technology signed a cooperation agreement with the government of Guangdong province on Nov 14 to advance the green development of the province's manufacturing. The agreement includes the establishment of new industrial parks regarding resource comprehensive utilization, re-manufacturing, energy saving and environmental-protection equipment, and building up a group of clean production enterprises through cooperation with Hong Kong as well as talent training in a circular economy. Zhou, from Wuhan University, remained more cautious about green economy trade measures in developed economies, as China is at the crucial stage of industrialization and urbanization, and carbon emissions will keep growing in the near future. "We can only agree to reduce carbon emissions in relative terms, and carbon-emission reduction in absolute terms will hurt Chinese industries," Zhou said. "The key move is to restructure energy-intensive industries and upgrade the processing trade so as to reduce carbon emission in Chinese exports. A fund should also be set up to promote low carbon in China's foreign trade," he said.

Sovereignty protection 'proper and necessary': FM Posted: 23 Nov 2012 12:19 PM PST BEIJING - Actions taken by China in response to Japan's illegal "purchase" of the Diaoyu Islands are "proper and necessary," Foreign Ministry spokeswoman Hua Chunying said on Friday. At a regular press briefing, she said Japan's actions had infringed on China's territorial sovereignty. Hua made the remarks when asked to comment on the criticism from Shinzo Abe, head of the Japanese opposition Liberal Democratic Party, of China's military budget increase and its attitude on the Diaoyu Islands. Hua stressed that China has been and will always be sticking to the path of peaceful development and maintaining regional stability. She said that China was devoted to solving disputes through talks and negotiations, and had tried its best to exercise restraint. "However, using all kinds of excuses and means, Japan has grown its armaments throughout the years, which draws wide attention from regional countries and the international community. It's high time for Japan to reflect on itself," Hua said.

Top legislator urges implementation of congress spirit Posted: 23 Nov 2012 12:19 PM PST TAIYUAN - China's top legislator has urged thorough study and implementation of the spirit of the 18th National Congress of the Communist Party of China (CPC), in order to complete the building of a moderately prosperous society in all aspects. Wu Bangguo, chairman of the Standing Committee of the National People's Congress, made the comments during a five-day inspection tour to north China's Shanxi Province, one of the largest coal production bases in the country. The tour ended Friday. He called for efforts in making economic, political, cultural, social and ecological progress. During his visit to local industrial companies, Wu called for the enterprises to play a leading role in technology innovation and aspire to international advanced levels. He also praised local enterprises' efforts in ecological protection through promotion of a recycling economy. He encouraged the industrial firms to contribute to clean energy development and energy efficiency improvements. Wu visited the Shanxi provincial museum, encouraging the province to boost tourism with its unique historical and cultural resources. During his tour to urban communities and rural villages, the legislator visited residents. Wu expressed his appreciation of the province's achievements during the past 10 years. He urged further measures to implement the missions set down at the 18th CPC National Congress with efforts in economic transformation and scientific development. He asked the province to optimize its coal resources with scientific and technological progress to improve energy efficiency, as well as to strengthen its advantage in equipment manufacturing industry. He also stressed efforts to enhance the province's industrial core competitiveness and ensure safe production. Wu urged efforts to create jobs, protect the workers' legitimate rights and interests and deepen the income distribution system reform. Social services for the public, including education, health care, housing and social security, should also be strengthened, Wu said. In addition, he called for efforts to build an environment-friendly society by identifying a number of measures, including phasing out inefficient productivity, promoting energy saving and emission reduction, enhancing clean production and resource recycling as well as improving forestation work, pollution control and ecological restoration. During his inspection, Wu visited staff members of the provincial legislature and asked them to serve the country's mission to complete the building of a moderately prosperous society in all aspects.

China suspends imports of nuts from US Sunland Posted: 23 Nov 2012 12:19 PM PST BEIJING - China on Friday said it will suspend import of nuts produced by US Sunland Inc. over Salmonella outbreaks. Quarantine branches will step up checks on nuts or nut products from the United States, as well as postal goods and luggage carried by passengers, according to the General Administration of Quality Supervision, Inspection and Quarantine. Parts of nuts and nut products from Sunland Inc. have been linked with Salmonella outbreaks. Forty-one people have fallen ill in 20 US states with ten of them being hospitalized, according to the World Health Organization (WHO) international food safety network. The company has been recalling products in 200-plus production batches, including those sold through the Internet. The shelf life of the products vary with the longest being October 2013, according to the administration. The original recall initiated by the company on September 24, included peanut butter and other nut butter products. They were produced in a separate building from where raw and roasted peanuts are processed, according to the company in a statement issued by the US Food and Drug Administration. The company on October 12 extended its ongoing voluntary recall to include raw and roasted shelled and in-shell peanuts processed in its processing plant. This was because the products have the potential to be contaminated with Salmonella, the statement said. The symptoms of Salmonella infection usually appear 12-72 hours after infection, and include fever, abdominal pain, diarrhoea, nausea and vomiting. The illness usually lasts between four and seven days, and most people recover without treatment, according to the WHO.

N China restaurant explosion kills at least 8 Posted: 23 Nov 2012 12:19 PM PST TAIYUAN - An explosion at a restaurant in north China's Shanxi province on Friday evening killed at least eight people and injured another 37, local authorities said. The explosion took place at 7:52 pm and then triggered a fire at the hotpot restaurant in Shouyang County of Jinzhong, the local sources said. The injured were sent to hospital and eight of them went home after medical treatment. Police had evacuated residents near the restaurant. An investigation is conducted to determine the cause of the explosion.

China operations for sovereignty protection "proper and necessary": FM Posted: 23 Nov 2012 10:00 AM PST Actions taken by China in response to Japan's illegal "purchase" of the Diaoyu Islands are "proper and necessary," Foreign Ministry spokeswoman Hua Chunying said on Friday.

Top legislator urges implementation of CPC national congress spirit Posted: 23 Nov 2012 09:58 AM PST China's top legislator has urged thorough study and implementation of the spirit of the 18th National Congress of the Communist Party of China (CPC), in order to complete the building of a moderately prosperous society in all aspects.

China publishes map of Sansha Posted: 23 Nov 2012 05:20 AM PST China has published the first official map of the newly-established city of Sansha, located in the South China Sea. It is the first map that reflects the geological information of China's Sansha City and South China Sea islands.

Xi Jinping promotes PLA general Posted: 23 Nov 2012 05:20 AM PST Xi Jinping, chairman of the Communist Party of China (CPC) Central Military Commission, promoted Wei Fenghe to full general on Friday.

China bans hospitals from turning away HIV/AIDS patients Posted: 23 Nov 2012 03:51 AM PST China's health authorities on Friday issued a circular banning health institutions from denying medical treatment to the people living with HIV/AIDS.

China publishes map of Sansha Posted: 23 Nov 2012 03:19 AM PST China has published the first official map of the newly-established city of Sansha, located in the South China Sea. It is the first map that reflects the geological information of China's Sansha City and South China Sea islands.

Xi Jinping promotes PLA general Posted: 23 Nov 2012 01:08 AM PST Xi Jinping, chairman of the Communist Party of China (CPC) Central Military Commission, promoted Wei Fenghe to full general on Friday.

Chinese KMT Revolutionary Committee Central Committee meets Posted: 23 Nov 2012 01:53 AM PST The Eleventh Central Committee of the Revolutionary Committee of the Chinese Kuomintang (RCCK), held its sixth plenary session here on Friday, reviewing the recently concluded National Congress of the Communist Party of China (CPC).

Scenery of Tibet's 2nd largest city Posted: 23 Nov 2012 01:27 AM PST

Chinese defense minister meets with Latvian counterpart Posted: 23 Nov 2012 01:27 AM PST Defense Minister Liang Guanglie on Friday met with his visiting Latvian counterpart, Artis Pabriks, and the two sides expressed the hope to strengthen military ties between the two countries.

Hangzhou's first metro line to start operation Posted: 23 Nov 2012 01:22 AM PST The first metro line in east China's scenic city of Hangzhou will be put into service on Saturday, after more than five years of construction.

Xi Jinping promotes PLA general Posted: 23 Nov 2012 01:15 AM PST Xi Jinping, chairman of the Communist Party of China (CPC) Central Military Commission, promoted Wei Fenghe to full general on Friday.

World's highest-altitude civilian airport to start operations in May Posted: 23 Nov 2012 12:11 AM PST Daocheng Yading Airport in southwest China's Sichuan Province, the world's highest-altitude civilian airport, will start operations in May, following the success of a test flight on Friday, according to a source with the airport.

Moderately prosperous China brings opportunities to world economy Posted: 22 Nov 2012 11:45 PM PST The just-concluded 18th Communist Party of China (CPC) national congress has promised to build China into a moderately prosperous society by 2020.

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