China’s sports brands are getting squeezed, just like I predicted in this column. The fact is that more consumers are wearing smarter clothes instead of shell suits, and there have always been too many bad sports brands around. Li Ning is getting a particular pummeling, on the street and in the market – and the company deserves it. The “Make the Change” ads are terrible. Doing yoga in Li Ning? Forget it – hardly anybody does yoga nowadays, the fad has passed. The mighty Nike took a wobble a few years back after mixing up images of performance sports with trendy fads like yoga. Consumers were left confused. Now Li Ning is repeating the mistake.
Talking of advertising, I’d be fascinated to know how consumers are responding to one of IKEA’s new ads. Worryingly, they may like it. Here’s the plot: Regulation Chinese white-collar family (mum, dad, little emperor) come home from the shops. The kid tries to hang up his water bottle but the hook is too high. He has to jump but he’s so fat he can’t reach. Eventually he throws his bottle on the floor, angry and exasperated. And what do his parents do at this display of tantrum throwing? Redecorate the house to suit the chubby little brat! The messages about the current state of Chinese middle class thinking, doting parents and S-generation brats to be gained from this ad are indeed legion.
IKEA is doing well these days, but like Tesco and Jusco they’ve not found many friends in the mall development community. Local developers basically all go high-end – malls your mistress would design with the requisite Louis Vuitton flagship, overpriced Italian scoff, slippery marble floors… you know the type. So Jusco and Tesco have struck out on their own, building malls with themselves as anchor tenants, and now IKEA is following. (Whether the malls will be self-assembly, the instructions in Swedish and come with millions of little Allen keys, I really don’t know.) The canny Swedes have lined up some good partners – French grocer Auchan, Chinese appliance king Suning and cinema operator Jin Yi Film for three new malls in Beijing, Wuhan and Wuxi. It seems the DIY kings are now doing it themselves in China. Practice what you preach, as they say.
If I had a dollar for every time I’ve read a “Unliever targets China growth” story in the last 20 years I’d be a rich man. Apparently, opportunities for brands like Knorr and Hellmann’s abound. Really? Does China need more chicken stock? Has a Chinese shopper ever bought mayonnaise except by accident? According to Alan Jope, Unilever’s Greater China chairman, interviewed in the Financial Times, “The soup market is 100 billion liters a year and that’s all made from scratch.” Is it? My local shops are full of stock cubes. One also wonders just how dim Jope thinks FT readers are… “Hefei, Shenyang and Chang-chun possess tremendous promise. These are all growing like a weed. And most of your readers have probably never heard of any of them.” The many FT readers who have heard of these places might be rather alarmed at anything that grows like a weed. Expect another Greater China chairman and another “Unilever targets China growth” story along in a year or so.
But didn’t Unilever sell a lot of shampoo after inflation scares saw mad consumers clearing shelves! My tip – avoid shampoo inflation completely by adopting the bald look. Sell any leftover shampoo to some idiot queuing up to buy gallons of it at Tesco.