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Unilever divides China into "several markets"

8 Jun, 2010

Unilever, the FMCG giant, is treating China like "several markets" in an effort to meet the diverse needs of consumers throughout the country.

The company first entered China 87 years ago, when it was known as Lever Brothers, and Lux soap resumed its role as one of the firm's best-selling brands after it returned to the market in 1986.

Lipton tea is among its other leading offerings in the world's most populous nation, where food lines such as Wall's ice cream are also gaining ground.

Despite the enormous potential available in China, Zeng Xiwen, vice president of Unilever's domestic operations, said adopting a nuanced approach is essential to making an impact.

"The market situation in China is more complicated ... than any other country. As China is such a large country, people have different shopping habits in different areas," Zeng suggested.

More specifically, the Chinese retail sector is distinctive both when compared with Europe and when measured against other emerging economies on a similar trajectory, such as India.

"In India, our products are mainly sold in small shops and in Europe [they are sold] in supermarkets," said Zeng.

"But in China, in some areas the main selling method is by supermarkets, other places [it is by] ordinary shops and in some areas [it is] a mix of both."

This complexity is also observable in the preferences of shoppers, a trend that applies particularly strongly to food but also extends to other categories where Unilever has a presence.

"In the past, we considered the Chinese market as one single market. Now, we divide it into several markets," said Zeng.

"We make deep studies of each market and analyse the different spending habits of different consumers. And we're constantly developing new products to meet changing tastes, lifestyles and expectations."

In an effort to achieve this latter goal, Unilever established a research and development centre in Shanghai in 2000 in order to make targeted additions to its portfolio.

These have included a new "slimming tea", a shampoo based on traditional Chinese ingredients which is said to prevent hair loss, and another haircare range using black sesame seeds.

Elsewhere, Unilever has also sought to enhance its local expertise by recruiting 90% of its senior managers from the Chinese workforce, rather than deploying executives from overseas.

Its other strategies have involved shifting its Chinese manufacturing hub in the country away from Shanghai to Anhui, which offers lower labour costs as well as helping it bring economic growth to an under-developed part of China.

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