While consumer based industries in China are still winning, the does not count for all. Some of the winners of the past lose out, while others keep their strength, observes advertising guru Tom Doctoroff in Dow Jones. “It’s about accessible aspiration.”
Not all the news is good. Passenger-car sales have fallen from a year earlier in three of the past four months, and have risen a disappointing 2.8% in the first nine months of the year, hit by China’s stock-market slump and new limits on car buying in several cities.
Nor are all consumer-focused businesses thriving. “It’s about accessible aspiration,” said Tom Doctoroff, Asia Pacific chief executive of advertising agency JWT, pointing to brands like KFC, which entered China in 1987. Once considered cool and modern here, the fried-chicken chain has struggled as companies like Starbucks have followed, with menus featuring pastries and sandwiches. KFC owner Yum Brands Inc., Hershey Co. and General Mills Inc. and other companies that target a broader range of consumers have hit speed bumps.
Yum’s same-store sales in China for the quarter ended Sept. 5 rose just 2% from a year earlier, short of the 9.6% analysts expected. Last month the company said it would shed its China operations. By contrast, Starbucks last week said it opened 1.5 stores a day in China during the third quarter, and plans to open 900 Asia-Pacific region stores next year.
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