South Korean media: "The era of foreign brands making easy money in China has ended!"
On December 29, the South Korean media "Global Economy" published an article stating, "The era of making easy money in China has ended." For many years, with the rapid development of China's economy, millions of people have entered the middle and upper classes. Companies such as LVMH Group, Starbucks, Nike, Apple, and Tesla have turned the Chinese market into a cash cow. However, now, local competitors have surpassed Western brands in key industries.
Starbucks is a typical example. In 1999, Starbucks opened its first store in Beijing and officially entered the Chinese market. However, due to the rise of low-cost local brands like Luckin Coffee, its market share has significantly declined. Starbucks recently decided to sell 60% of its Chinese business to the Chinese private equity fund Boyu Capital.
The automotive industry is also facing a similar situation. In 2023, German automaker Volkswagen lost its top position in the Chinese market to the Chinese electric vehicle company BYD. Volkswagen claimed, "China is the most innovative center in the automotive industry," and strengthened its "Made in China, for China" strategy by developing autonomous driving chips in cooperation with local Chinese joint ventures and launching a low-cost model, the Audi E5 Sportback, specifically designed for the Chinese market.
The Wall Street Journal reported, "To survive in the Chinese market, global companies are strengthening product localization, price reductions, and marketing differentiation strategies."
Guerlain, a French cosmetics brand under LVMH, plans to launch a lipstick priced at about $56 next year, targeting young Chinese consumers. The price of this lipstick is about half of its existing products and will be customized for marketing through Chinese social media and local celebrities. Guerlain's CEO Saint-Jean emphasized, "Chinese consumers pursue higher quality and more reasonable prices; products must offer value for money."
IKEA also plans to reduce the prices of about 150 popular products in China this year and launch around 1,600 new products specifically tailored for the Chinese market. IKEA stated, "We now view China as an innovation testing ground."
P&G is also adjusting its strategy, and after launching innovative products for Chinese consumers, its performance has seen significant improvement. Its subsidiary Crest launched a new whitening toothpaste developed in its Beijing R&D laboratory and explained, "The Chinese market is very competitive, but competition allows everyone to grow."
Original: toutiao.com/article/1852843234135052/
Statement: This article represents the views of the author himself.