On November 25th, Japan Kao and Shanghai Jahwa announced strategic cooperation. According to industry insiders, this cooperation is also a “salvation move” in which Japan’s Kao is not satisfied with China’s waters and has suffered losses for many years.
Japan Kao has entered the Chinese market for 18 years and its performance has been poor. Statistics from Euromonitor's information show that in the fiscal year ending March 2011, Kao's sales in China in 2010 were 2.4 billion, while P&G Group's sales in China in 2010 reached RMB 26 billion. BNP Paribas analyst Moen said that Kao’s annual loss in China was more than 1 billion yuan. “only 1% of Kao’s sales come from China and rely on washing supplies.”
Corresponding to the poor performance, the management of Kao China is chaotic. Kao, the chairman of Kao China, told Junyi Finance that Kao's products are basically imported from Japan. However, the relevant person in charge of the Kao China Headquarters Office stated that “the products sold by Kao in China except for the cosmetics Sufina series imported directly from Japan, all other brands are produced in China.” However, for the producer, who is the manufacturer and Kao China’s relationship, the staff of the Kamen China General Manager’s Office said “unclear”.
Kao loses or exceeds 1 billion in China
At the China-Japan CEO Forum, Mr. Ping Feng, the chairman of Kao China Investment Co., Ltd., told Netease Finance that “there is a poor sales performance of Kao in China”.
Japan Kao Diaper
s are the world's fourth largest co
nsumer goods company and the largest daily chemical products brand in Asia. Last year, global sales were a
bout $15 billion, second o
nly to Procter & Gamble, L'Oreal and Unilever.
Kao established Shanghai Kao Co., Ltd. in China as early as 1993. Since 1995, it has set up factories in Shanghai and Zhongshan City, Guangdong Province, and gradually realized the local production of Kao chemical raw materials. In 2002, Kao China Investment Company was established as Headquarters, sales brands in China include Birou, Shifen, Jialibao, Leya and so on.
Statistics from Euromonitor's information show that in the fiscal year ending March 2011, Kao's sales in China in 2010 was 30 billion yen (equivalent to about RMB 2.4 billion), while P&G Group's sales in China reached 2010. 26 billion yuan.
Zhang Honghui, a senior day-to-day marketing person, told Netease Finance that compared with China's localized daily brands, annual sales of 2.4 billion yuan may not be a small number, but compared to international daily chemical giants such as P&G and Unilever who also entered China. The amount of sales, this figure is too "a lot of money."
In the 18 years of entering the Chinese market, Kao’s performance in the Chinese market has been unsatisfactory. Moen, an analyst at BNP Paribas in Tokyo, said that “Kana’s entire overseas business is disorganized and disappointing. Especially in China. Kao started to start the diaper
business in China not long ago. So far, no products have been produced locally in China.” He particularly emphasized that Kao’s annual loss in China was more than 1 billion yuan. “o
nly 1% of Kao’s sales come from China and rely on washing supplies.”
Kao Shiro, Chairman of Kao China Investment Co., Ltd. said that Kao currently has a loss in the Chinese market, but he did not disclose the specific amount of the loss.
Regarding the statement that “Kana’s annual loss in China is more than 1 billion yuan”, relevant personnel of the General Manager Office of Kao China Investment Co., Ltd. told Netease Finance that this data does not match the facts. However, for the specific sales performance of Kao in China in recent years, Kao said that due to Kao China's non-listed companies, they have never separately published or published specific sales performance data. They are not clear about the specific sales situation in China.
NetEase Finance found that the Japanese official website data of Japan Kao did not involve the sales situation in the relevant Chinese market. In this regard, Kao China explained to Netease Finance, “The sales performance of Kao China is incorporated into the performance of Japan’s Kaodong (microblogging) South Asia. , not listed separately."
Unclear strategy, management confusion or loss main cause
Some media reported that in August this year, Kao invested 1 billion yuan in Hefei to establish China's largest family daily necessities project production base officially started, covering an area of about 125,000 square meters, scheduled to officially put into operation in 2012. This is another time that Kao has established a new production base in China after setting up a production base in Shanghai.
However, Kao’s chairman of China, Mr. Hirohiko Hiroyuki, told Netease Finance that Kao China has nearly ten brands including Birou and Shifen. Previously, Kao’s products were mainly imported from Japan and will be developed into imports and production in China. Half of the situation.
Contrary to the statement of Hiroshi Ichiro, the staff of the Kamen China General Manager’s Office told Netease Finance that “the products sold by Kao in China except for the cosmetics Sufina series imported directly from Japan, all other brands are produced in China.” Regarding who the manufacturer is, the relationship between the manufacturer and Kao China, the staff of the Kamen China General Manager's Office said that due to the relatively large changes in Kao China's internal personnel in recent years, it is not clear about the relevant products.
Netease Finance found in a Wal-Mart store in Beijing that sells Kao products. All the Kao products sold in the supermarket are marked by the bottom manufacturer: Shanghai Huawang Co., Ltd., and the company is a Sino-Japanese joint venture with the address in Shanghai. City No. 333 Huawang Road. However, according to NetEase Finance, Kao China has never said that Shanghai Kao Co., Ltd. is a Sino-Japanese joint venture, and the company’s official website on Shanghai Kawang Co., Ltd. is: The company was established in August 1993, Japan Kao established a production base in China, mainly engaged in the production of household items under the Kao family.
Netease Finance visited a number of large supermarket chains in Beijing and found that there were no sales of Kao's products, such as Wumei and CP Lotus. Most of the daily chemicals sold by these large supermarkets are mainly products of P&G and Unilever. According to feedback from the chain supermarket group, many large supermarket chains have cancelled cooperation with Kao.
Mr. Hirao said to Netease Finance that Kao's current products are mainly located in the coastal cities of southeast China, and will gradually deploy other cities in China in the future. At the same time, he stressed that although Kao's current performance in China is not good, Kao will not give up the first-tier cities in China.
It is understood that the gross profit margin of detergents is around 10%-20%, and the gross profit margin of cosmetics will be higher, reaching more than 50%. Zhang Honghui, a senior Japanese marketing person, said, “Like the products of Kao, compared with the products of P&G and Unilever, the gross profit is not much different, but Kao’s products are not mature in entering the Chinese chemical products market, and the brand influence The power is not big, consumers do not agree with the product, the channel is squeezed, and the loss is a natural problem."
Kao entered China For the past 18 years, most of the seniors in Kao China are still Japanese. Li Guijun, a brand expert, said: “How can these Japanese people understand the needs of Chinese consumers? And Kao’s investment is too cautious, and the localization of brands in China is not the main reason for the dissatisfaction of Kao’s Chinese market.”
Kao join hands to strengthen or strengthen channel cooperation
On November 25 this year, Japan Kao and Shanghai Jahwa announced strategic cooperation. The first step of the cooperation is to integrate the distributor channel resources owned by Shanghai Jahwa to promote the personal care products and household products business of Japan Kao. According to industry insiders, this cooperation is also a “salvation move” in which Japan’s Kao is not satisfied with China’s waters and has suffered losses for many years.
In fact, as early as 2001, Kao of Japan had worked with Chinese chemical companies. Kao chose to cooperate with Zhejiang Chuanhua for strategic cooperation. He hoped to establish a strategic reorganization through this cooperation and use Zhejiang Chuanhua's channel to promote its own brand products.
At that time, Japan Kao has been insisting on taking the high-end route in the world, and Zhejiang Chuanhua has a large share in the rural market of China's daily chemical products. At the beginning of the cooperation, the Japanese Kawang is faced with insisting on the high-end route or the choice of rural development. Awkwardly, "the cooperation between the two sides has not found a common goal."
It is reported that the cooperation between the two sides began soon, and the high-level members of Zhejiang Chuanhua Group revealed that “a joint venture will lose money and a loss of 30 million in 2004.” In addition, Zhejiang Chuanhua has repeatedly stated that it is in the market. The development strategy is passive everywhere, because Kao's China strategy is not clear, we have been greatly affected."
After experiencing the failed cooperation with Zhejiang Chuanhua, the cautious Kao chose to cooperate with Shanghai Jahwa. However, this cooperation has caused doubts in the industry. Japan Kao and Shanghai Jahwa have great overlaps in product categories, and there is a horizontal competition, and Kao has not formed a national brand in China, which may produce a second. The birth of a transfiguration flower king.
Li Guijun said that for Kao, Shanghai Jahwa is responsible for dealer channels, so Kao China has always been criticized by the outside world for its sales ability is not strong, or will be alleviated. After all, Shanghai Jahwa's dealer network in more than 1,000 cities across the country has great appeal to Kao.
Kazuo Co., Ltd. Chairman Ozaki said that it will take advantage of Shanghai Jahwa's wholesale and sales network, and hopes to push Kao's Baby diaper
s, Sanitary napkin
s, laundry products and other products into third- and fourth-tier cities. In 90 cities, the sales revenue of 10 billion yen has been expanded to 650 cities and 50 billion yen, and sales of 100 billion yen have finally been achieved.