Petrol-flavored Oreos

It’s a summer tradition in China that new products are launched to grab the casual spend of consumers over the school holidays when parents’ wallets may be a little easier to pry open. And every year there’s a major disaster – a product that is so ill-thought-out, tastes so awful and is so preposterous that it’s doomed to fail. Past failures included Kit Kat’s (Nestle; NESN.SIX) watermelon-flavored chocolate bar and Bright Dairy’s (600597.SH) ill-conceived chocolate-flavored cheese. The worst product of summer 2010? Oreo’s (Kraft Foods; KFT.NYSE) ice cream-flavored cookies – an idea that probably worked on paper but in reality was the equivalent of a mouthful of crunchy toxic waste ("petrol and rotten cheese," was the verdict of one brave 10-year-old). And so they remain piled high in every supermarket and convenience store I visit.

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A major European supermarket chain looking to launch in China – too late and missed the boat, or sensibly cautious and avoiding the mistakes of others? We may soon know; UK grocer Sainsbury’s (SBRY.LSE) is looking to open a branch in Shanghai. Sainsbury’s seriously lags market leader Tesco (TSCO.LSE) in the UK, so it will be interesting to see the two go head-to-head in China. We know two things about Chinese grocery shoppers: One, they are cost-conscious and like to get plenty of bang for their buck; two, they like to try new retailing concepts when they come along. So it will be the battle of the slogans: Tesco’s "Every Little Helps" versus Sainsbury’s "Try Something New Today."

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Cadres have a lot of power to interfere in everybody’s life and business but they are not necessarily paid that much (technically). They work for the people (supposedly). So the perks are really, really important – assigned housing, plenty of trips, envelopes under the table and, perhaps most important, an assigned car. Just a dozen years ago a mere black Volkswagen (VOW.FWB) Santana would have been sufficient for a cadre. Then it was an Audi A6 with blacked-out windows. Then the stakes got higher – a GM, a Merc, a Beemer. Now there is a new cadre-most-wanted vehicle – the Range Rover. Visiting a high-end cadre-filled housing complex in Shanghai the other week, Range Rovers, and a few Land Rovers, were ubiquitous. One low-paid but high-rolling cadre told me that anything less is a sign of demotion these days. Good news for India’s Tata Motors (TTM.NYSE, 500570.BSE), Range Rover’s new owner.

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Everybody’s going "high end" in China these days, even those who make a perfectly good living from regular products. Take Holiland, a decent bakery chain from Shenyang that spread nationwide to include a thousand shops in 70 cities. I always liked the boss of Holiland, Luo Hong, who made his money and then disappeared off around the world following his hobby of photography. Holiland’s upmarket offerings include the "Black Swan" series – priced around RMB500 (US$74) – and a cake that costs RMB10,000 and is delivered in a Rolls Royce.

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I mentioned before UNIQLO’s (9983.TYO) claim that it would open 1,000 "large stores" in a decade, or one new outlet every three days – a rate no one else has come anywhere near matching. It appears to have been, as predicted, PR hype. With the glittering opening ceremony of the Shanghai flagship store now over, UNIQLO has reduced the target number by two thirds. Let’s hope those journalists who unquestioningly wrote up the 1,000 stores in 10 years tale will report this scale-back. Unlikely, though.