Tang The Chinese Consumer Market

Opportunities and Risks
1. Auflage 2009
ISBN: 978-1-78063-220-9
Verlag: Elsevier Science & Techn.
Format: EPUB
Kopierschutz: 6 - ePub Watermark

E-Book, Englisch, 250 Seiten

Reihe: Chandos Asian Studies Series

The Chinese Consumer Market examines the changing consumer business environment in China and offers predictions about the evolution of the Chinese consumer market in the different sectors as well as the likely strategic implications for global consumer oriented companies. - The first book is in English made by Chinese researchers with a Chinese viewpoint of developments - Provides the management implications in different sectors of the Chinese economy - Predicts future trends

Autoren/Hrsg.

Tang, Lei

Inhaltsverzeichnis

1;Cover;1
2;The Chinese Consumer Market: Opportunities and Risks;4
3;Copyright;5
4;Contents;6
5;About the author;12
6;1 Chinese consumer trends;14
6.1;Introduction;14
6.2;Chinese traditional culture and its values;15
6.3;Some essential aspects of Chinese culture;20
6.4;The major consumer segments in China and their trends;23
6.5;Conclusion;31
6.6;References;32
6.7;Further readings;33
7;2 The Chinese automobile market;34
7.1;A history of China’s automobile industry:
three phases;34
7.2;The major Chinese automobile manufacturers;35
7.3;Local producers may copy designs, especially for spare parts;42
7.4;The current automobile market;43
7.5;Importing and exporting;47
7.6;Market opportunities and risks;51
7.7;Main regulations of the Chinese auto industry;53
7.8;The leading exhibitions of automobiles and parts in China;55
7.9;Understanding Chinese vehicle buying preference;55
7.10;Female consumer segments;56
7.11;Conclusion;57
7.12;References;57
7.13;Further readings;58
8;3 The cosmetic sector in China;60
8.1;Introduction;60
8.2;Market overview;60
8.3;Competitive situation;61
8.4;Major cosmetic players by product sectors;63
8.5;Chinese cosmetic consumers;65
8.6;Market opportunities and risks;67
8.7;Distribution channels;69
8.8;What’s the challenge for newcomers?;70
8.9;How to access Chinese cosmetics market?;71
8.10;References;74
8.11;Further readings;75
9;4 Chinese Internet consumer behaviour;76
9.1;Introduction;76
9.2;History of the Internet in China;77
9.3;Current market growth and statistics;78
9.4;Case study: main Internet companies;83
9.5;Why e-commerce works well in China?;88
9.6;Chinese Internet user characteristics;89
9.7;User behaviour and attitudes;90
9.8;China’s mobile Internet;94
9.9;Chinese Internet opportunities and risks;96
9.10;Conclusion;102
9.11;References;103
9.12;Further readings;103
10;5 The Chinese mobile value-added services market;104
10.1;Introduction;104
10.2;Current Chinese mobile VAS market;105
10.3;Mobile VAS value chain in China;107
10.4;The significant role of Ministry of Industry and Information Technology (Bernhard, 2006; Tang, 2006);110
10.5;Some main applications in the market;113
10.6;Opportunities and risks in VAS market;117
10.7;Case study: Rock Mobile (Peng Luo, 2005);117
10.8;New trend in mobile VAS market in China;120
10.9;The future of the VAS market;121
10.10;Three key factors for the future;121
10.11;Conclusion;122
10.12;References;122
10.13;Further readings;123
11;6 The Chinese media market;124
11.1;Introduction;124
11.2;Media structure in China;125
11.3;Current media market situation;125
11.4;Main factors driving growth and change;127
11.5;Advertising in transition;133
11.6;Opportunities and risks in
China’s media market;134
11.7;Is mobile television ready in China?;136
11.8;Conclusion;137
11.9;References;138
11.10;Further readings;138
12;7 The Chinese 3G market;140
12.1;Introduction;140
12.2;Current situation of 3G in China;141
12.3;TD-SCDMA: what happened exactly?;144
12.4;What is the difference between China
and Europe in terms of 3G?;148
12.5;Restructuring of Chinese telecom sector;150
12.6;Where are 3G Chinese consumers?;151
12.7;Conclusion;153
12.8;References;154
12.9;Further readings;154
13;8 The Chinese wine market Introduction;156
13.1;Introduction;156
13.2;History of grape wine in China;156
13.3;Chinese wine producers and their structure;157
13.4;Current wine market in China;159
13.5;Major wine regulation in Chinese market;161
13.6;Behaviour of Chinese wine consumer;161
13.7;How to enter the Chinese wine market;165
13.8;Constraints to selling wine in China;168
13.9;Conclusion;169
13.10;References;169
13.11;Further readings;170
14;9 The Chinese real estate market Introduction;172
14.1;Introduction;172
14.2;Current real estate market in China;173
14.3;Legal issues in real estate development and investment;180
14.4;Opportunities and risks for foreign investments;182
14.5;Conclusion;187
14.6;References;189
14.7;Further readings;189
15;10 The Chinese pharmaceutical
products market;190
15.1;Introduction;190
15.2;Development history of the
Chinese pharmaceutical industry;190
15.3;Current market situation;193
15.4;Opportunities and risks in Chinese
pharmaceutical industry;198
15.5;New consumer trends in
pharmaceutical industry;202
15.6;Conclusion;202
15.7;Note;203
15.8;References;203
15.9;Further readings;204
16;11 The Chinese tourism market;206
16.1;Introduction;206
16.2;Current situation in tourism industry;208
16.3;Chinese traveller behaviour;213
16.4;Key outbound travel segments;215
16.5;Spending patterns of Chinese travellers;216
16.6;Opportunities and risks in tourism;218
16.7;Conclusion;220
16.8;References;221
16.9;Further readings;222
17;Conclusion;224
18;Abbreviations;226
19;Index;230

Leseproben

2

The Chinese automobile market

Lei Tang

A history of China’s automobile industry: three phases

The first phase: 1956–1987

The Chinese automotive industry began as a minor part of China’s First Five Year Plan (1953–1957). A medium-sized truck manufactured in 1956 at the First Auto Works in Changchun, the capital of Jilin province, was the first indigenous Chinese automobile. For the next three decades or so, the sector remained as merely a token presence in the Chinese industrial landscape. Much of this period saw an industrial slowdown, with the total vehicle output staying below half a million units per year until the 1980s (Murray, 1994). With neither the directive nor the capacity to produce either light or heavy trucks, the industry restricted itself to producing only medium-sized trucks. Besides, the mass production of an indigenous passenger vehicle was not part of the agenda. The priorities of the essentially centrally directed economy and the economic policies of the time did not encourage development in the industry and can be a plausible cause for the slump in the sector during the period. Land reform and economic recovery to secure future economic growth were the pressing concerns in the immediate post-liberation (1949) phase.

The second phase: 1987–1994

By mid-1987, the Chinese government began seeking a much-needed revitalization of the economy, choosing the automobile sector as one of the ‘pillar industries’ of the Chinese economy. Subsequently, the industry shifted from producing medium trucks to heavy and light trucks and to eventually to private motor vehicles (PMVs). This decision saw immediate impact, with approximately 150,000 cars rolling out in the country by 1987. By 1993 that figure had risen ninefold to 1.4 million automobiles on the roads.

During this period, the Planning Authorities, influenced by the Chinese economic and demographic studies of the domestic PMV market, began pushing for massive increases in PMV production. Despite aggressive manufacturing plans, the private ownership of cars was still rare in China, with registration figures in 1994 touching only a mere 50,000 vehicles.

The third phase: 1994–2009

With the release of Ninth Five-Year Plan, more major reforms in the PMV sector were unveiled in July 1994. The Chinese government announced ambitious plans to accelerate and develop the industry over 1994–2009. Their plan to triple the 1994 production levels transformed a basically domestic industry into a global player. The PMV industry expects to consolidate over the next decade into very large and internationally competitive automotive enterprise groups, with a long-term objective to design and manufacture a completely indigenous small PMV without any imported parts or components.

The major Chinese automobile manufacturers

The “Big 3”

Shanghai Automobile Industry Company

The Shanghai Automobile Industry Company (SAIC) was restructured into a conglomerate in September 1995 and is into two major joint ventures (JVs): SAIC-Volkswagen (VW), producing the Santana and Passat, and SAIC-General Motors (GM), producing the Buick. In five years, the company hopes to double its capacity to 700,000 units and rise to significantly more than 1 million by the end of 2008. In 2007 the company sold over 1.69 million vehicles, topping all the other major auto groups in China (Table 2.1).

Table 2.1

Top 10 and sales volumes 2007

Maker

Model

Sales volumes 2007 (thousand)

Volkswagen

Jetta

20.11

Hyundai

Elantra

12.03

Chery

QQ

13.02

Buick

Excelle

19.68

Honda

Accord

11.80

Volkswagen

Santana

20.31

Ford

Focus

12.50

Hainan-Mazda

Family

11.37

Toyota

Camry

17.03

Tianjing FAW

Xiali

13.25

Source: http://www.caam.org.cn.

The VW–SAIC, a 50–50 JV, came into effect in March 1985. Production currently focuses on four products: the Santana, Santana 2000, Passat and Polo. VW plans to introduce its LT Commercial vehicle, Touran, a compact minivan, and Transporter in the coming years. Competition from Honda (Honda Accord) and SAIC–GM (Buick) notwithstanding, VW still has a strong position with market share above 30 per cent (or over 50 per cent, if including the First Automative Works [FAW] and VW partnership). This appears to be very profitable.

SAIC–GM is a 50–50 JV between SAIC and GM since June 1997. The Buick G, Buick GL8 and the Buick Sail compact car, which were introduced in June 2001, are GM’s main offerings.

First Automotive Works

FAW was the first Chinese company to produce automobiles in 1953. It is a diversified maker of quality light, medium and heavy-duty trucks; municipal buses and luxury tourist coaches and the like, with total sales in excess of 7 million vehicles worldwide.

FAW has 27 wholly owned subsidiaries and controlling interest in 20 partially owned ones. Among these are FAW Jiefang Truck Co. Ltd. and FAWER Automobile Parts Co. Ltd., which are wholly owned subsidiaries, FAW Car Co. Ltd., Tianjin FAW Xiali Automobile Co. Ltd. and Changchun FAW Sihuan Automobile Co. Ltd., whose shares are traded on the stock exchange, and FAW–Volkswagen Automobile Co. Ltd. and Tianjin FAW Toyota Motor Co. Ltd., both of which are Sino-foreign joint ventures. The FAW–VW JV was established in 1991. Production of this venture is based around the Audi A6 and VW Jetta (Figure 2.1).

Figure 2.1 FAW: Sales and income 2003–2007 Source: http://www.faw.com.

DongFeng Motor Corporation

Founded in 1969 and originally named the Second Automobile Works, the DongFeng Motor Corporation (DFM) formally came into being in 1981. The company is involved in two car JVs, DongFeng Dragon, with Peugeot–Citroen in 1992, (for details see ‘Foreign original equipment manufacturers [OEMs] operating in China’) and Feng Sheng Motor, with Taiwan Yurong in 2000.

The DongFeng–Peugeot–Citroen production is based around Citroen ZX, Elysee and Picasso. DFM has also set up a larger JV with Nissan, with production having started in 2001 (Figure 2.2).

Figure 2.2 Automobile market share for 2000 and 2005 Source: China Automotive Industry Yearbook (2006).

As of 2007, DFM has gained an annual output of 1,137,000 vehicles, a sales income of RMB 1,648 billion and market shares of 12.94% in the Chinese auto market. (http://www.dfmc.com.cn)

The smaller producers

Tianjin Automotive

Toyota, which is a recent entrant (2005) to the Chinese market, has recently signed an agreement with Tianjin Automotive to produce compact cars. Whether Toyota can pick up the volumes in the Chinese market remains to be seen. The annual production has been estimated at 100,000 to 150,000 vehicles towards the end of 2009.

ChangAn Automotive

Suzuki signed a deal with ChangAn in 1993 and now has a good foothold in the Chinese market. ChangAn Ford Automobile Corp. was founded jointly by ChangAn Automobile Group and Ford Automobile Corp. on April 25, 2001. The main models are Ford Fiesta and Ford Mondeo, besides some others. The total production is estimated over 120,000–200,000 units in 2008.

Guangzhou Automobile Group

Honda, which established a partnership with Guangzhou Automobile Group in 1998, entered the Chinese markets ahead of Nissan and Toyota. The total production has been around 2950,000 units in 2007 and is expected to attain 1 million by the end of 2008.

Beijing Automotive

Beijing Automotive has a JV with Daimler–Chrysler (DCX) for the production of the Jeep Cherokee. It also has a JV with the Korean firm, Hyundai Motors, with an investment of US $1 billion. The current total production is 500,000 units per year, which is estimated at 600,000 units by the end of 2008.

Nanjing Automobile Group

Nanjing Fiat Automobile Co. Ltd is a 50–50 JV between Fiat SPA and Nanjing Automobile Group and was established in 1995. The Yuejin Motor (Group) Corporation that owns Nanjing Automobile Group, now has two JVs, both with the Fiat group.

One is Naveco Ltd. jointly established with Iveco in 1995, with an investment of US $425 million. The other, established in 1999, is Jiangsu Nanya, based in Nanjing, with the total investment of US $282 million. The main models are Palio, Palio Weekend and Siena. The total production is 200,000 units per year.

Foreign original equipment manufacturers (OEMs) operating in China

VW: The first to arrive and the dominant market player

VW enjoyed the first-mover (1985) advantage and continues to dominate market share. It has a comprehensive range of products from the old Santana to the Audi A6 (the governmental official car of choice) and is aiming to introduce most of the VW range....