- Starbucks' CEO Discusses Q1 2012 Results – China Highlights
- US to continue anti-dumping duties on furfuryl alcohol from China
- Pollution sparks panic water buying in China
- Mixing High and Low in Beijing
- Best dive bars in Shanghai
- Wine on the wane: Fake vintages undermine market in China
- McDonald's in China undergoes European makeover
- Online supermarket Yihaodian develops new e-commerce model
- Officials punished in Chinese milk scandal given new jobs
Friday, January 27, 2012
What's Happening...
Starbucks' CEO Discusses Q1 2012 Results – China Highlights
In China and Asia-Pacific or CAP, the strong momentum that built throughout 2011 continued in the first quarter of fiscal 2012. Net revenues increased by 38%, driven largely by rapid new store growth, along the same-store sales growth of 20%. The strong comps were comprised of a 15% increase in transactions and a 5% increase in average ticket. All 4 of our company-owned markets in CAP posted double-digit comps, with China leading the way at 28%.
We have now recorded greater than 20% comps for 6 consecutive quarters in China. Consistent with results across our global store base, the holiday platform produced very solid results as well. Additionally, we're gaining traction on our loyalty program, with nearly 250,000 My Starbucks Rewards members already signed up in China. Strong holiday merchandise sales contributed to the higher average ticket.
Operating income in CAP was also strong, increasing 26% to $58 million in the first quarter. Operating margin contracted 350 basis points to a still outstanding 34.6%, resulting from higher performance-based compensation, higher costs necessary to fuel our expansion in this region, as well as 200 basis points related to higher commodity costs. While store operating expenses and costs increased, we saw solid leverage on occupancy and depreciation from the additional sales.
Given the consistency of strong results in China/Asia-Pacific, we're going to continue to accelerate growth in the region. We opened 121 net new stores in Q1, the highest of our 3 retail regions. The growth came from 48 net new stores in mainland China, where we continue to see extremely strong returns that are surpassing our initial projections. Sales to investment ratio in mainland China is more than 2.5:1, and first-year, cash-on-cash returns are the highest in our system. Better store growth contributors in CAP in Q1 included South Korea, where we opened 24 net new stores and Japan with 15 net new stores.
Question-and-Answer Session
Michael Kelter - Goldman Sachs Group Inc., Research Division
I wanted to ask about China. First off, China ticket was up 5%. Does that represent a price increase to offset inflationary pressures? Or is there some sort of a change in the way consumers are interacting with the brand in China? And then also in China, the acceleration in unit growth which you're now actually starting to see, curious if you're bumping into any internal or external bottlenecks, and what you're finding you have to tweak as you accelerate the trajectory there?
Howard D. Schultz
This is Howard and we've got John Culver here, the President of that region. So John?
John Culver
Yes, I would say that -- I mean, what we're seeing in China is on the ticket side, there's no impact from pricing. So we have not taken pricing in China. So what you're seeing is real. The comp growth is mainly being driven by transaction. We continue to accelerate the new store growth across all the markets. We now sit in 41 cities across the country. We opened our 500th store this quarter, and this past quarter, we opened 5 new cities, all right. So what we see is continued acceptance of the Starbucks brand and the Starbucks Experience. And in terms of any kind of bottlenecks or barriers, clearly, we are ramping up the investment around the infrastructure, and back-in-the-house systems. So IT systems, as well as supply chain systems and distribution capabilities, and then also, continuing to accelerate the advancement around hiring ahead of the curve, particularly around store operations, as well as with the store development teams. To help drive the growth, we're also accelerating the ability to design stores in market. So we've made significant investment from a store development standpoint of shifting the resources back here in Seattle, and pushing that out into China, into markets of the world much closer and much quicker in the market. And then we've also added additional investment in China around research and development to really capture the consumer trends in China, and to drive innovation that really is going to be impactful for the Chinese consumer.
US to continue anti-dumping duties on furfuryl alcohol from China
WASHINGTON - The US government said on Friday that it will continue to maintain the existing anti-dumping duties on furfuryl alcohol from China, despite Beijing's repeated calls for Washington to drop protectionism.
The US International Trade Commission (ITC) said in a statement that revoking the existing anti-dumping duty order on furfuryl alcohol from China would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
As a result, the existing order on imports of this product from China, which was widely used in organic chemistry, will remain in place. The duty ranges from 43.54 percent to 50.43 percent.
Under the Uruguay Round Agreements Act, the US Department of Commerce has to revoke an anti-dumping or countervailing duty order, or terminate a suspension agreement, after five years unless the department and the ITC determine that revoking the order or terminating the suspension agreement would be likely to lead to continuation or recurrence of dumping or subsidies and of material injury within a reasonably foreseeable time.
Trade tensions with China are a particularly sensitive issue at a time when the US and other Western economies want to boost exports to revive economic growth and cut unemployment.
The Chinese Commerce Ministry has repeatedly urged the United States to abide by its commitment against protectionism and work together with China and other members of the international community to maintain a free, open and just international trade environment.
Pollution sparks panic water buying in China
SHANGHAI — Pollution in China's southern region of Guangxi sparked panic buying of bottled water this week after a mining firm dumped toxic cadmium into a river, according to state media.
Residents in Liuzhou city filled shopping carts with boxes of bottled water, as the government sought to reassure people that the drinking water supply was safe, Shanghai's Oriental Morning Post reported.
Authorities found waste discharged into the Longjiang river by the Jinhe Mining Co caused excessive levels of cadmium some three times the government's accepted limit, the official Xinhua news agency said.
The pollution was originally detected on January 15 after it killed a "small number" of fish, but measurements on Wednesday showed elevated levels of cadmium further downstream, it said.
The Liuzhou government could not be reached for comment Thursday, a public holiday for the Chinese Lunar New Year.
Authorities had dispatched officials to ensure ample supply of bottled water at shops and prevent price gouging, Xinhua said. State media showed pictures of shelves at one supermarket almost stripped bare of bottled water.
However, Liuzhou officials said water quality in the area was "safe". Over the past week, firefighters had dumped chemicals aimed at neutralising the cadmium into the river.
According to the World Health Organization cadmium is a carcinogen which can seriously damage the kidneys, bones and respiratory system. It has several industrial applications, ranging from steel to batteries.
Three decades of rapid economic growth and lax enforcement of environmental protection laws have caused most waterways in China to be heavily contaminated with toxic waste from factories and farms.
A toxic algae bloom -- likely caused by pollution such as chemical fertiliser -- on Taihu Lake in eastern China contaminated water supplies for more than 2.3 million people in 2007.
Pollution by individual factories has also sparked protests in China as residents, who fear for their health, show a rising awareness about the environment.
In a recent case, hundreds of people living near a plant making solar panels in eastern China protested in September last year, forcing authorities to temporarily shut the Jinko Solar factory.
Mixing High and Low in Beijing
Single-malt, 18-year-old Scotch mixed with bottled green tea, anyone?
The concoction — the subject of many a nightlife horror story by visitors to China — isn’t as popular as it used to be, but it remains an apt metaphor for Beijing’s nightlife, which prefers its high with a splash of low.
That distinguishes the city from the more Westernized Shanghai. “In Shanghai, it’s about how much money you can spend,” says Leon Lee, a San Franciscan who owns bars in both Shanghai and Beijing.
“Beijing is edgier, a little rough around the edges,” he adds. “It’s more fun to go out in Beijing.”
As money and mixologists have streamed into the city, its upscale options have grown. Start by checking out Sanlitun, Beijing’s preeminent drinking district. Once a sweaty Babylon where shadowy figures tried to beckon male visitors to “lady bars,” Sanlitun is now home to Nali Patio, a six-story, Mediterranean-themed courtyard complex that houses several bars and restaurants.
Here, the main attraction is Apothecary, a sleek, third-floor speakeasy. Run by Mr. Lee, its extensive drinks menu doubles as a cocktail-history textbook and includes an expertly executed Old Fashioned (with optional bacon-infused bourbon) and an Earl Grey martini made with handcrafted bitters and topped with whipped egg whites. Prices are reminiscent of Manhattan, but so is the quality.
Other Nali Patio options include Enoterra, a welcoming wine bar on the fourth floor, and Migas, a Spanish restaurant and bar with an industrial-chic dining room and an expansive rooftop patio.
For a quieter night out, go east of the Third Ring Road to an entertainment district known as Lucky Street. There you’ll find Mokihi, an unassuming Japanese whiskey bar located on an upper floor along the southern end of the street. Bypass the main room for the back area, where bartenders ply their trade in a room lined with bottles of single-malt whiskey and infused liquors. If you’re hungry, order a plate of Wagyu sashimi from K’s Kitchen next door, and pair it with a wasabi martini.
To go deeper into Beijing’s soul, head inside the Second Ring Road to Dongcheng. An older part of the city, Dongcheng is one of the last repositories of the city’s beloved hutong — maze-like alleyways where history, politics and culture brush up against each other to fascinating effect.
Few nightlife spots epitomize that better than Yugong Yishan, a music venue inside a complex that once housed the government of warlord Duan Qirui. It hosts everything from punk rock shows to film screenings to underground rebel bingo and keeps its patrons well lubricated with cheap Tsingtao.
A few kilometers away is Gulou Dongdajie, a street teeming with pubs, guitar shops and vintage clothing stores that serves as Beijing’s answer to San Francisco’s Haight Ashbury neighborhood. In a courtyard house tucked away in an alley, you’ll find Amilal, one of the favorite haunts of the city’s expatriate literati. Run by a Mongolian photographer who uses the space to host exhibitions of his friends’ work, it’s an excellent place to decompress after taking in a live show.
Another hutong option is Mao Mao Chong, a five-table bar that does a steady trade in China-themed mixed drinks such as the Maojito, a gingery take on the Mojito, and the Jing Fling, a cocktail based on China’s not-for-the-faint-of-heart baijiu liquor.
If you’re still going strong at midnight, two after-hours destinations, Lantern and Haze, beckon. Lantern, run by Beijing electronic-music label Acupuncture Records, ministers to heaving weekend crowds. Haze caters to hipsters and offers the added late-night challenge of being located at the bottom of one of the city’s most perilous staircases.
Apothecary, Third floor, Nali Patio, 81 Sanlitun Beilu, Tel.: 86-10-5208-6040
Enoterra, Fourth floor, Nali Patio, 81 Sanlitun Beilu, Tel.: 86-10-5208-6076
Migas, Sixth floor, Nali Patio, 81 Sanlitun Beilu, Tel.: 86-10-5208-6061
Mokihi, Third floor, C12, Lucky Street, Tel.: 86-10-5867-0244
Yugong Yishan, 3-2 Zhangzizhong Lu, Tel.: 86-10-6404-2711
Amilal, 48 Shoubi Hutong, south 66 Gulou Dongdajie, Tel.: 86-10-8404-1416
Mao Mao Chong, 12 Ban Chang Hutong, Tel.: 86-10-6405-5718
Lantern, 100 meters north of Workers Stadium West Gate, Tel.: 86-135 0134 8785
Haze, A101, Guanghua Lu SOHO, 22 Guanghua Lu (basement of On the Corner Cafe), Tel.:86-10-5900-6128
Best dive bars in Shanghai
You could hit the Bund every night and order bottle service or sip on RMB 80 cocktails. But the glitterati lose their sheen quickly and at some point, the only bottle you want in your hand has the word "REEB" or "Tsingtao" on it.
Although some locales live up to the cigarette butts and harsh fluorescent lighting image conjured up by the words “dive bar”, the best ones are places that simply keep the concept of a cheap drink, sans frills, close to the heart.
Here are eight of the best Shanghai dive bars in no particular order.
C's
Who you'll see there: Chinese bouncing to “Empire State of Mind”
What you'll drink there: A pint of Carlsberg for RMB 15, or Tiger for RMB 20
Best deal you'll find there: RMB 40 Jagerbombs
The grandfather of places that smell like your grandfather, C’s is a maze of crowded, sweaty rooms in the basement of an office building that are completely covered in graffiti.
Imagine that the wall art is an enormous tramp stamp and this place makes perfect sense.
We can’t go back because somebody in our party decided to start breaking light bulbs, which didn’t seem all that out of place at the time.
This is one of those places where there’s always somebody to talk to or hook up with.
Don't leave without: Writing something stupid on the wall.
C's, 685 Dingxi Lu, near Yanan Xi Lu 定西路685号, 近延安西路, +86 21 6294 0547, Sunday-Thursday: 7:30 p.m.-3 a.m.; Friday-Saturday: 7:30 p.m.-5 a.m.
Harley's Bar
Who you'll see there: Older Americans, Chinese working stiffs lookin’ to kick off the Sunday shoes
What you'll drink there: Beam. Neat.
Best deal you'll find there: RMB 25 pints of Tiger, RMB 45 Heinekens, and RMB 50 Murphy's
In a basement next to an Internet cafe in Xujiahui, Harley’s takes its name and decor from the bar mat of Americana.
There aren’t any specials, the bartender is darped in a leather vest, and the pool table’s felt is torn and frayed. You got a problem with that?
Don't leave without: This might ruin the “Roadhouse” described above, but they have a really nice cat. Pet the cat.
Harley’s Bar, 265 Nandan Dong Lu, near Caoxi Bei Lu 南丹东路265号, 近漕溪北路, +86 21 5424 7317, 6 p.m.-2 a.m.
Windows Too
Who you'll see there: Sassy Filipino waitresses who reprimand you for speaking to them in Chinese. Don’t try Spanish either -- trust us.
What you'll drink there: Coors. They used to be RMB 10, but are now RMB 15
Best deal you'll find there: Other than the Coors? RMB 25 coronary in a Philly Cheese Steak costume.
Windows Scoreboard has better ambiance and view; Windows Underground provides a better assortment of degenerates selling chemical and flesh; but the Jing’an Windows branch is remarkable because it’s so damn unremarkable.
By not intruding with any hip music or decor (except that marvelous “Madagascar” mural), Windows Too allows drinkers to concentrate on the all-important union of beer and liver.
Don't leave without: Asking the manager to put on the new Gift Skateboards video.
Windows Too, 2/F, City Plaza, 1618 Nanjing Xi Lu, near Huashan Lu 南京西路1618号久光百货2楼, 近华山路 +86 21 6288 9007, 10 a.m.-4 a.m.
Helen's Cafe
Who you'll see there: Someone saying, “That’s what I love about these study-abroad girls. I keep getting older, and they stay the same age.”
What you'll drink there: They haven’t yet figured out how to water down the booze, so enjoy the RMB 15 shots
Best deal you'll find there: A free bottle of Tsingtao for the first five customers every Wednesday
If, in penance for some sin committed in another lifetime, you find yourself wandering the streets of Yangpu, grab a beer at this place.
Stupid backpacker accoutrements here aside, the place is brimming with students (from Tonji, Fudan, and Shanghai University of Finance and Economics) who are, in turn, brimming with cheap beer.
Don't leave without: Trying the cheeseburger (RMB 26, or RMB 16 before 6 p.m.)
Helen's Cafe, 49 Wuchuan Lu, near Wan'an Lu 武川路49号, 近万安路, +86 21 6536 8669, 5 p.m.-2 a.m.
Dada
Who you'll see there: Girls with sidebangs and outfits lifted from the set of "Global Guts." Check thecobrasnake.com if you don't know what we mean.
What you'll drink there: Almost all drinks hover around RMB 30, so take your pick
Best deal you'll find there: Chinglish Cocktail for RMB 25.
Dada barely made this cut. A dive cannot abandon earnestness, that's all it has. And Dada, at its root, is a hipster bar, one built on irony.
It's a little too smooth, the playlists too perfect to be a dive, but for some reason, it still is, and we love it.
Don't leave without: Checking out the Sub-Cinema Movie Night on Tuesdays (movie starts at 9:30 p.m.). Free popcorn, woohoo!
Dada, 115 Xingfu Lu, near Fahuazhen Lu 幸福路115号, 近法华镇路, +86 150 0018 2212, 8 p.m.–2 a.m. (weekend till later)
Not Me
Who you'll see there: Swedes, chicks with sidebangs and dudes outside asking for change
What you'll drink there: Standard drinks and brands you can spot in most Shanghai bars
Best deal you'll find there: RMB 80 all-you-can-drink deal and RMB 15 beers on Thursday
In the gutted carapace of a former talking-girl bar, Not Me shows that booze barns in Shanghai have second acts.
You won’t be drinking top-shelf booze, but it’s not like you deserve it.
A revolving schedule of theme nights and dance parties (electroclash and the like) keeps the place interesting. It’s hip, but not self aware enough to become a hipster bar.
Don't leave without: Talking to the San Franciscan owner, Sam Liem.
Not Me, 21 Dongping Lu, near Hengshan Lu 东平路21号, 近衡山路, +86 21 6433 0760, 8 p.m.-2 p.m., www.not-me.com
I Love Shanghai
Who’s going: People with tourist visas
What you'll drink there: Surprisingly overpriced beer (RMB 35 for a Tiger)
Best deal you'll find there: Strong Island (RMB 50)
If dive is defined by lack of posturing, then this Jing'an institution doesn't fit the bill. But, if a dive is thought of by how little it changes over the years -- I Love Shanghai has it made.
With the perpetual adolescence of a frat house, "I <3 Shanghai" (as it is also known) embraces the seedy, mediocre side of Shanghai's nightlife that is quickly evaporating like so much spilled Carlsberg. The beers are too expensive, and the lights too bright, but this place is still bizarrely popular and is still considered a dive. Don't leave without: Adding a tallymark to the absinthe shot bar. I Love Shanghai, 2/F, 1788 Xinzha Lu, near Jiaozhou Lu 新闸路1788号, 近胶州路, +86
Mokko's
Who you'll see there: Hip Japanese, people who love ska but hate Bob Marley, and anyone else who happens to wander down the random alley it's on
What you'll drink there: Shochu
Best deal you'll find there: RMB 35 for wheat shochu and grapefruit juice
The first time we went to Mokko's, the bartender walked up to the table and said, “I’ll be your menu.”
He wasn’t kidding, they have no menu, so have faith in your waiter or you're S.O.L.
The tight-knit waitstaff know their stuff though, so you’re in good hands, allowing you to relax as you sip, listen to old Trojan records and be content.
“We love ska with shochu, they’re both so smooth,” says Kanoko, our waiter, part of the tight-knit waitstaff, whose service is so unpretentious you can only experience it at a dive.
Although it’s odd to think of a Japanese bar like this making a dive bar list -- this tiny, clean and tidy bar still does even though it hides it dive-y aspects well.
Take the bathroom for instance. Look past the graffiti to the Japanese toilet. Look at all those kinky functions. Pure dive, only the best way.
Don't leave without: Asking La Mu (拉姆), the Tibetan woman behind the bar, to sing you a song.
Mokkos, 1245 Wuding Xi Lu, near Wanhangdu Lu 武定西路1245号, 近万航渡路, +86 21 6212 1114, 7 p.m.-2 a.m., (closed on Tuesday)
Source: CNN Go
Although some locales live up to the cigarette butts and harsh fluorescent lighting image conjured up by the words “dive bar”, the best ones are places that simply keep the concept of a cheap drink, sans frills, close to the heart.
Here are eight of the best Shanghai dive bars in no particular order.
C's
Who you'll see there: Chinese bouncing to “Empire State of Mind”
What you'll drink there: A pint of Carlsberg for RMB 15, or Tiger for RMB 20
Best deal you'll find there: RMB 40 Jagerbombs
The grandfather of places that smell like your grandfather, C’s is a maze of crowded, sweaty rooms in the basement of an office building that are completely covered in graffiti.
Imagine that the wall art is an enormous tramp stamp and this place makes perfect sense.
We can’t go back because somebody in our party decided to start breaking light bulbs, which didn’t seem all that out of place at the time.
This is one of those places where there’s always somebody to talk to or hook up with.
Don't leave without: Writing something stupid on the wall.
C's, 685 Dingxi Lu, near Yanan Xi Lu 定西路685号, 近延安西路, +86 21 6294 0547, Sunday-Thursday: 7:30 p.m.-3 a.m.; Friday-Saturday: 7:30 p.m.-5 a.m.
Harley's Bar
Who you'll see there: Older Americans, Chinese working stiffs lookin’ to kick off the Sunday shoes
What you'll drink there: Beam. Neat.
Best deal you'll find there: RMB 25 pints of Tiger, RMB 45 Heinekens, and RMB 50 Murphy's
In a basement next to an Internet cafe in Xujiahui, Harley’s takes its name and decor from the bar mat of Americana.
There aren’t any specials, the bartender is darped in a leather vest, and the pool table’s felt is torn and frayed. You got a problem with that?
Don't leave without: This might ruin the “Roadhouse” described above, but they have a really nice cat. Pet the cat.
Harley’s Bar, 265 Nandan Dong Lu, near Caoxi Bei Lu 南丹东路265号, 近漕溪北路, +86 21 5424 7317, 6 p.m.-2 a.m.
Windows Too
Who you'll see there: Sassy Filipino waitresses who reprimand you for speaking to them in Chinese. Don’t try Spanish either -- trust us.
What you'll drink there: Coors. They used to be RMB 10, but are now RMB 15
Best deal you'll find there: Other than the Coors? RMB 25 coronary in a Philly Cheese Steak costume.
Windows Scoreboard has better ambiance and view; Windows Underground provides a better assortment of degenerates selling chemical and flesh; but the Jing’an Windows branch is remarkable because it’s so damn unremarkable.
By not intruding with any hip music or decor (except that marvelous “Madagascar” mural), Windows Too allows drinkers to concentrate on the all-important union of beer and liver.
Don't leave without: Asking the manager to put on the new Gift Skateboards video.
Windows Too, 2/F, City Plaza, 1618 Nanjing Xi Lu, near Huashan Lu 南京西路1618号久光百货2楼, 近华山路 +86 21 6288 9007, 10 a.m.-4 a.m.
Helen's Cafe
Who you'll see there: Someone saying, “That’s what I love about these study-abroad girls. I keep getting older, and they stay the same age.”
What you'll drink there: They haven’t yet figured out how to water down the booze, so enjoy the RMB 15 shots
Best deal you'll find there: A free bottle of Tsingtao for the first five customers every Wednesday
If, in penance for some sin committed in another lifetime, you find yourself wandering the streets of Yangpu, grab a beer at this place.
Stupid backpacker accoutrements here aside, the place is brimming with students (from Tonji, Fudan, and Shanghai University of Finance and Economics) who are, in turn, brimming with cheap beer.
Don't leave without: Trying the cheeseburger (RMB 26, or RMB 16 before 6 p.m.)
Helen's Cafe, 49 Wuchuan Lu, near Wan'an Lu 武川路49号, 近万安路, +86 21 6536 8669, 5 p.m.-2 a.m.
Dada
Who you'll see there: Girls with sidebangs and outfits lifted from the set of "Global Guts." Check thecobrasnake.com if you don't know what we mean.
What you'll drink there: Almost all drinks hover around RMB 30, so take your pick
Best deal you'll find there: Chinglish Cocktail for RMB 25.
Dada barely made this cut. A dive cannot abandon earnestness, that's all it has. And Dada, at its root, is a hipster bar, one built on irony.
It's a little too smooth, the playlists too perfect to be a dive, but for some reason, it still is, and we love it.
Don't leave without: Checking out the Sub-Cinema Movie Night on Tuesdays (movie starts at 9:30 p.m.). Free popcorn, woohoo!
Dada, 115 Xingfu Lu, near Fahuazhen Lu 幸福路115号, 近法华镇路, +86 150 0018 2212, 8 p.m.–2 a.m. (weekend till later)
Not Me
Who you'll see there: Swedes, chicks with sidebangs and dudes outside asking for change
What you'll drink there: Standard drinks and brands you can spot in most Shanghai bars
Best deal you'll find there: RMB 80 all-you-can-drink deal and RMB 15 beers on Thursday
In the gutted carapace of a former talking-girl bar, Not Me shows that booze barns in Shanghai have second acts.
You won’t be drinking top-shelf booze, but it’s not like you deserve it.
A revolving schedule of theme nights and dance parties (electroclash and the like) keeps the place interesting. It’s hip, but not self aware enough to become a hipster bar.
Don't leave without: Talking to the San Franciscan owner, Sam Liem.
Not Me, 21 Dongping Lu, near Hengshan Lu 东平路21号, 近衡山路, +86 21 6433 0760, 8 p.m.-2 p.m., www.not-me.com
I Love Shanghai
Who’s going: People with tourist visas
What you'll drink there: Surprisingly overpriced beer (RMB 35 for a Tiger)
Best deal you'll find there: Strong Island (RMB 50)
If dive is defined by lack of posturing, then this Jing'an institution doesn't fit the bill. But, if a dive is thought of by how little it changes over the years -- I Love Shanghai has it made.
With the perpetual adolescence of a frat house, "I <3 Shanghai" (as it is also known) embraces the seedy, mediocre side of Shanghai's nightlife that is quickly evaporating like so much spilled Carlsberg. The beers are too expensive, and the lights too bright, but this place is still bizarrely popular and is still considered a dive. Don't leave without: Adding a tallymark to the absinthe shot bar. I Love Shanghai, 2/F, 1788 Xinzha Lu, near Jiaozhou Lu 新闸路1788号, 近胶州路, +86
Mokko's
Who you'll see there: Hip Japanese, people who love ska but hate Bob Marley, and anyone else who happens to wander down the random alley it's on
What you'll drink there: Shochu
Best deal you'll find there: RMB 35 for wheat shochu and grapefruit juice
The first time we went to Mokko's, the bartender walked up to the table and said, “I’ll be your menu.”
He wasn’t kidding, they have no menu, so have faith in your waiter or you're S.O.L.
The tight-knit waitstaff know their stuff though, so you’re in good hands, allowing you to relax as you sip, listen to old Trojan records and be content.
“We love ska with shochu, they’re both so smooth,” says Kanoko, our waiter, part of the tight-knit waitstaff, whose service is so unpretentious you can only experience it at a dive.
Although it’s odd to think of a Japanese bar like this making a dive bar list -- this tiny, clean and tidy bar still does even though it hides it dive-y aspects well.
Take the bathroom for instance. Look past the graffiti to the Japanese toilet. Look at all those kinky functions. Pure dive, only the best way.
Don't leave without: Asking La Mu (拉姆), the Tibetan woman behind the bar, to sing you a song.
Mokkos, 1245 Wuding Xi Lu, near Wanhangdu Lu 武定西路1245号, 近万航渡路, +86 21 6212 1114, 7 p.m.-2 a.m., (closed on Tuesday)
Source: CNN Go
Wine on the wane: Fake vintages undermine market in China
The price of Chateau Lafite Rothschild plunged sharply in China from the second half of last year due to a glut of fake imitations, which caused many investors and collectors to suffer losses.
A report from the Beijing Daily said the price of the wine had skyrocketed 30% yearly in the past few years as growing incomes stimulated demand, making it a hot investment target for Chinese collectors.
Yet Chateau Lafite counterfeits have become rampant in the world's second-largest economy. The biggest vendor of Chateau Lafite Rothschild in Beijing told the local Beijing News that he imported poor-quality wine from France, rebottled it as Chateau Lafite en route and sold these counterfeits for thousands of yuan a bottle.
Chinese wine expert Zhu Linong told the Beijing News that buying Chateau Lafite Rothschild in China is always a riddle. The vineyard produces 200,000 bottles a year, of which only 40,000 bottles are exported to China. Yet far more than this amount is consumed in China, meaning much of it is fake.
According to data from Liv-ex in London, a global marketplace for wines, a major drop in the price of Chateau Lafite Rothschild has been seen since the second half of 2011, especially the 2008 vintage, which saw a 45% reduction in price compared with the highest price in March.
It was the first time in eight years that the price of Chateau Lafite Rothschild slumped in China and many investors faced heavy losses.
At a Sotheby's auction in early Oct. 2011 in Hong Kong, the sale of 59 lots of 821 bottles of wines was cancelled, the first time this had happened since 2009.
Some investors told the newspaper that the incident showed the passion for wine collecting in China is on the wane.
McDonald's in China undergoes European makeover
Global fast-food chain McDonald's has been actively transforming its restaurants in China into European-style outlets in order to attract young people in urban areas. In 2011, 100 McDonald's outlets underwent such transformation and 80% of the outlets in China will undergo the renovation by 2013.
The new European style is intended to reflect simplicity, in contrast to the American restaurant's traditional style that reflects a high-tempo lifestyle.
"We want to attract young people and make them loyal supporters of the simple and happy lifestyle," remarks Zeng Qishan, CEO of McDonald's China.
Last year, several outlets in Beijing and Shanghai installed independent coffee corners. The ongoing renovations involves more fundamental change, including the arrangement of seats, artwork and lighting.
Since its entry into the Chinese market, McDonald's has embraced the company's classical yellow and red colors in the decor of its outlets, winning over many children, their parents and other people who like bright colors. Now McDonald's wants to tap the potential for business meetings and gathering of friends. Its new target customers are young people aged 18-28.
In order to poach customers from coffee chain Starbucks, McDonald's will offer free Wi-Fi internet access service at its outlets in Beijing, Shanghai, Guangzhou and Shenzhen starting in April.
McDonald's has launched a new slogan: "Reserve some space for happiness," stressing the slow pace of drinking coffee, in sharp contrast with their old mantra, "I'm lovin' it!"
To support the transformation, McDonald's increased capital outlay by 35% in 2011 and will boost the outlay by 40% more in 2012. So far, the company has invested 7 billion yuan (US$1.1 billion) in China. A majority of the expenditures have been in opening new outlets and upgrading corporate image.
McDonald's has more than 1,000 outlets in China, compared with more than 3,000 KFC restaurants. However, its profit margin is five times that of Yum! Brands, which operates KFC and Pizza Hut in China.
McDonald's plans to further step up its investments in China in order to tap the market potential resulting from the further urbanization of the Chinese population. China's urban population is set to top 700 million in five years. To capitalize on the trend, McDonald's plans to establish 1,000 additional outlets in China by 2013.
Online supermarket Yihaodian develops new e-commerce model
The young Chinese online supermarket Yihaodian, which got its start in 2008, has exploded onto the e-commerce stage after tweaking and experimenting with new business strategies.
Annual sales leapt from 4.17 million yuan (US$660,000) during the supermarket's first year, to 805 million yuan (US$127 million) in 2010 and to 2.72 billion yuan in 2011 (US$431 million). Yihaodian has won capital investment from global retailing giant Walmart and has become the subject of a case study course at the American retailer's MBA program.
Yihaodian — meaning "No. 1 Store" — was co-founded by current chairman Yu Gang, who formerly served as a senior supply chain executive at Dell and Amazon, and his former Dell colleague Liu Junling, who is now the online retailer's CEO.
Instead of adopting a fancy or flamboyant business format, Yihaodian has chosen to "bring people a better lifestyle." It sets as the core of its business model "providing one-stop home shopping solutions for customers who need not step outside." Yihaodian currently offers 150,000 products, about six times that offered by Walmart or Carrefour brick-and-mortar stores. Average prices are 3-5% lower than in traditional supermarkets, according to the Chinese-language Economic Observer.
The company has five large warehouses — in Shanghai, Beijing, Guangzhou, Wuhan and Chengdu — with more than 130 of its own distribution centers in 34 major cities. It aims to expand its distribution network to 100 cities by the end of 2012. What's more, it is set to increase the number of products offered to 500,000 by the end of December. Yihaodian also provides services such as flight booking and bill payment. Medical services and pharmaceutical supplies are also available at its website.
After leaving Dell in 2007, Yu and Liu rented a small room in Shanghai's Pudong area, using it as an office in which they mapped out their business plan. They launched the Yihaodian website in July 2008.
The pair pays careful attention to customer service. The company is constantly conducting market surveys to solicit customer feedback, and assigns specific teams to carry out improvements based on suggestions from clients. Employee performance is evaluated mainly on service to customers.
After establishing an efficient logistics network, Yihaodian is able to offer overnight delivery to most cities in the Yangtze and Pearl River delta regions in coastal China. Deliveries to top-tier cities like Shanghai and Beijing can be completed in just half a day. Logistics is one area in which the supermarket has reacted to suggestions, now offering "three deliveries in one day" service and delivery at designated times and locations, both requested by customers.
Yihaodian, dissatisfied with software products available on the market, has also invested in building its own team to develop software that can efficiently process the wide range of information that goes through its system.
The company allocates 30-40% of its investment capital for expanding warehouse and delivery networks, 30% on IT development, and less than 10% on advertising and marketing, much lower than average for the e-commerce industry. Chairman Yu explained that Yihaodian sticks to the principle of cost-effective spending with a focus placed on more essential operations.
Officials punished in Chinese milk scandal given new jobs
The Hong Kong-based Sing Tao Daily reports that all officials who were punished in a toxic milk formula scandal in 2008 which poisoned 300,000 children in China have since resumed government posts.
Zhao Lianhai, a representative of the victims of the melamine incident, has expressed his disgust at this latest development.
The scandal emerged in July 2008, when 16 infants in China's northwestern province of Gansu were diagnosed with kidney stones. All of them had been fed milk powder produced by the Sanlu Group of Shijiazhuang city in northern China's Hebei province.
Government inspections found that the milk formula had been adulterated with melamine, an industrial chemical which had been added to boost the apparent protein content of the milk. In addition to Sanlu, products made by 21 other brands including Mengniu, Yili and Yashili were also found to be tainted.
Seven officials in Shijiazhuang, including then mayor Ji Chuntang, were fired or forced to resign due to the scandal. However, according to the Sing Tao Daily, Ji has taken up the post of deputy director of the Hebei industry and information technology department.
Zhang Fawang and Zhao Xinchao, two deputy mayors of Shijiazhuang who were also dismissed after the scandal, also made recent returns to government posts. To avoid public criticism, related government websites deliberately deleted these officials' backgrounds and information.
Ji confirmed his reinstatement to the newspaper and asked that his new assignment not be reported.
According to the Chinese health ministry, by November 2008 an estimated 300,000 children had suffered poisoning due to melamine-tained milk, of whom six died from kidney damage and 860 were hospitalized.
The issue revealed the problems of food safety and political corruption in China and damaged the reputation of the country's food exports. At least 27 nations including Taiwan stopped all imports of Chinese dairy products and the domestic industry has yet to recover, with many in China still insisting on imported foreign brands of milk formula despite its higher price.
A survey by state broadcaster CCTV in 2011 found that at least 70% of China's public still did not dare to buy domestic milk some three years after the scandal.
Friday, January 20, 2012
What's Happening...
- Brands Like Nescafe Are Tapping Rebellious Figures in China
- SABMiller launches China trial for Miller Genuine Draft
- Baijiu Shows Premium Sector is Not All About Imported Cachet
- Kweichow Moutai 2011 preliminary profit up 65%
- Ban Moutai at official banquets, says deputy
- Chinese New Year spikes Remy Cointreau nine-month sales
- Starbucks Management Call Provides an Overview of New Reporting Segments- China Highlights
- Nestle, Coca-Cola to end joint venture in China
- Celebrating the Year of the Dragon
- Out of the Gate, Wine Auctions Disappoint
- Having the bottle to invest in red wine
- Pricey counterfeit labels proliferate as China wine market booms
- Accolade spreads its wings in China
- Carrefour to Speed up China Store Openings in 2012
- McDonald's Opened 200 Restaurants In China In 2011
- Drink makers look to cut waste, emissions
- Orange juice safe, makers say
Brands Like Nescafe Are Tapping Rebellious Figures in China
Brands in China are looking for more rebellious figures to create aspirational messages for their affluent young white-collar targets. The recent collaboration between Nescafe and popular writer, blogger and social critic Han Han is an interesting example of this dynamic.
Nescafe coffee competes with Kraft Foods' Maxwell House and a plethora of ready-to-drink products. Until recently, both leading brands focused on championing heroic office workers and their dreams of advancement in a ruthlessly competitive job market. Maxwell House led the charge with Wang Luodan, the lead actress of the hit TV series "The Diaries of Du Lala," which celebrates the triumph of a poor village girl who becomes the head of an international company.
Nescafe countered with literary bad-boy superstar Han Han, an idol to a well-educated generation whose lives have been defined more by opportunity than restriction. The move appears to be a calculated risk for both the brand and the celebrity.
Despite their jobs in an international, professional environment, white-collar workers in China have private lives and media behaviors that are relatively devoid of participation or debate. Aggravating the situation is the Chinese government's recent effort to curb "excessive entertainment" on local television.
With an ambitious, optimistic generation feeling stifled by limits on conversation and content, brands are realizing that associating with outspoken figures is an effective way to differentiate themselves.
Nescafe's decision to work with Mr. Han is a conscious attempt to tap this sense of frustration. In the OgilvyOne Beijing ad campaign, "Live Out Your Boldness!" Mr. Han, who is also a semiprofessional race-car driver, is cast as a Steve McQueen-type hero on a motorbike who sips coffee from a red Nescafe mug. On a road trip, he encourages everyone -- from paraplegic racers to musicians -- and helps communities build schools as a veritable "rebel with a cause." The digital campaign hosted on Sina.com encourages Nescafe consumers to post examples of brave acts they have committed.
Mr. Han enjoys enormous popularity for his prolific literary talent as well as his willingness to challenge social and political norms. His blog has registered more than 300 million hits, according to a New York Times profile of Mr. Han, although content is sometimes deleted.
While not an out-and-out democratic crusader, Mr. Han is politically disruptive and on the government's watch list. His commercial success and international exposure as one of Time magazine's 100 Most Influential People in 2010 afford him more leeway than his less fortunate creative peers. (Time described him as "a willing participant in a process that channels the disaffected energy of youth into consumerism.")
Between politics and a wish to maintain his credibility, Mr. Han has until recently been reluctant to commercialize his special appeal among China's post-1980s cohort.
His first foray as a commercial ambassador was in 2010 for apparel brand Vancl, whose ads always end with the tagline "I am Vancl." Mr. Han's ad read "Love internet. Love freedom. Love racing, love waking up late. Love late-night snacking, I also love 59RMB canvas shoes. I'm not a trendsetter, I'm not anyone's representative. I'm Han Han, I only represent myself. I'm the same as you. I am Vancl."
He was also the centerpiece of Johnnie Walker's "Sentimental Journey" campaign, blogging his interpretation of dreams and encouraging consumers to break down barriers in a locally nuanced expression of the Diageo brand's global "Just Keep Walking" platform.
Mr. Han's partnership with Nescafe suggests a watershed in commercial communication in China, where a brand can leverage social criticism and controversy to create intimacy with younger consumers. And his allure makes him a safer bet than in the past.
SABMiller launches China trial for Miller Genuine Draft
China Resources Snow Breweries Limited ("CR Snow"), its joint venture with China Resources Enterprise Limited ("CRE"), is launching a trial of SABMiller's international premium brand, Miller Genuine Draft, in the Zhejiang region of China.
The introduction of Miller Genuine Draft into the Zhejiang market gives the company the opportunity to test the potential for its international brand with a premium beer imported from the USA.
The joint venture has achieved significant growth for local brand ‘Snow', which is both the largest beer brand in China and in the world by volume. CR Snow had a 21% share of the Chinese beer market with sales of more than 92 million hectolitres (1 hectolitre = 100 litres) in 2010.
CR Snow is the exclusive importer and will utilise its existing infrastructure to service the market, with Miller Genuine Draft initially available in Hangzhou and Wenzhou following a launch event to be held in Hangzhou on 16th January.
Ari Mervis, SABMiller's Managing Director, Asia Pacific, said: "This is an exciting opportunity to introduce one of our international brands into the fast-growing premium segment in China in a way which takes advantage of CR Snow's strong market position in the region."
Zhejiang is one of the largest markets in Central China and its capital, Hangzhou, has one of the highest GDPs of the provincial large cities.
About SAB Miller
SABMiller plc is one of the world's largest brewers with brewing interests and distribution agreements across six continents. The group's wide portfolio of brands includes premium international beers such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch, as well as leading local brands such as Aguila, Castle, Miller Lite, Snow and Tyskie. SABMiller is also one of the world's largest bottlers of Coca-Cola products.
In the year ended 31 March 2010, the group reported US$3,803 million adjusted pre-tax profit and group revenue of US$26,350 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.
About China Resources Snow Breweries Limited
China Resources Snow Breweries Limited was established in 1993 and became a joint venture with SABMiller plc in 1994. It is engaged in the production, sales and marketing of beer in China. Its shareholders are China Resources Enterprise, Limited and SABMiller Asia Limited, a subsidiary of SABMiller plc. China Resources Enterprise, Limited has a 51% interest in China Resources Snow Breweries Limited while SABMiller Asia Limited holds the remaining 49% interest. In 2010, it operated over 70 breweries in China with a total beer sales volume of about 92 million hectolitres. It is the largest beer company in China by sales volume.
About China Resources Enterprise, Limited
China Resources Enterprise, Limited is listed on the Hong Kong Stock Exchange and is one of the constituent stocks of the Hang Seng Index in Hong Kong. The Group focuses on the consumer businesses including retail, beer, food and beverage in China.
Research in Focus - Baijiu Shows Premium Sector is Not All About Imported Cachet
Given the rapidly developing consumer economy in China, it is hardly surprising that the premium spirits sector has been such a growth area. What is rather more surprising is that, in contrast to many developing markets, China's domestic spirit, baijiu, more than holds its own at the pinnacle of the spirits pyramid, in spite of the cachet of international brands.
In fact, a recently-published report from The IWSR asserts that "the widespread impression among Western companies that the Chinese consider foreign spirits as being of superior quality to their home produce is completely untrue: baijiu is by a distance the largest super/ultra-premium/prestige spirits category in China."
According to The IWSR Baijiu Report, in contrast to most other developing countries with a large domestic spirits production, baijiu is not always synonymous with low price. Moreover, the ultra-premium/prestige baijiu category has been growing faster than the standard/low-priced sector over the past five years.
Sales of ultra-premium/prestige baijiu are dependent on consumption and gifting by Chinese government officials, so much so that any government directive asking for restraint in public expenditure affects ultra-premium/prestige baijiu sales and prices. The report estimates that as much as 30% of super-premium baijiu is purchased directly by the Government for distribution among Communist Party members.
Interestingly, however, baijiu is rarely consumed in bars, nightclubs or ‘KTV’ karaoke lounges. In contrast, baijiu is drunk with meals and banquets. Indeed, the report suggests that this may be a consumption occasion which represents a considerable opportunity for Western-style spirits, as only wine and Cognac have made any inroads in this area and, even then, in only two provinces.
So, on the face of it, baijiu, which is a clear, a grain-based distilled spirit, typically at 40% to 60% abv, should be an interesting investment opportunity for international spirits companies. However, the report warns that the conventional advantage of gaining distribution clout and a route-to-market for imported products from such an acquisition does not exist in China.
Not only does the product have little or no presence in the modern on-trade outlet (MOT) sector, The IWSR points out that the distribution channels for baijiu and Western-style or imported spirits are different. "Any Western company hoping to gain distribution muscle for its Western-style spirits portfolio in the short term by acquiring (in whole or in part) a baijiu company, will be disappointed," the report states.
There are, however, "less tangible" benefits. "The advantage of buying a share in a baijiu company will be less tangible and more long-term: to better understand how the Chinese consumer’s mind works and how distribution channels work."
Such insight may alone justify the investment, but gaining full control of a baijiu brand is not possible for foreign companies. The government protects baijiu companies for heritage reasons. Only joint ventures with foreign groups are allowed, while the top baijiu companies are not permitted to accept foreign capital.
For this reason, foreign investment in baijiu companies has been very limited.
Diageo was the first international drinks group to buy into a baijiu producer and, not surprisingly, chose a brand with strong premium credentials. While Shui Jing Fang is far from being one of the largest producers by volume and ranks just inside the top 20 by value - if only the ultra-premium-plus baijiu segment is considered -Shui Jing Fang would be among the top five. The other international groups with an interest in the sector are Pernod Ricard, LVMH and ThaiBev.
In terms of scale, the baijiu sector is, by any reckoning, impressive. If all baijiu produced in 2010 was consumed, it would represent over one-third of all traceable spirits consumption on the planet. Production has almost doubled over the last five years to reach its current base of almost 1bn cases.
Baijiu is drunk at almost all occasions in China where alcoholic beverages are consumed, from daily residential consumption to family or business gatherings, while the primary gifting occasions are the Chinese New Year and Mid-Autumn Festival. Brand marketing is focused on heritage, age and provenance with packaging generally finished in red and gold, colours which have positive connotations in Chinese culture. More expensive variants come in oversized external packaging with a relatively small bottle.
However, while baijiu may have a presence in the premium spirits market not enjoyed by national spirits in some other developing markets, it faces a challenge not unfamilar to traditional spirits.
The IWSR report points to baijiu's ageing consumer base and the lack of affinity with younger consumers, with whom Western-style spirits carry much more appeal.
"Baijiu’s popularity, coupled with the scale of China’s consumerism, gives the industry colossal momentum, which could take decades to slow," the report states. "However, when you consider that most baijiu consumers are male and aged 30-plus, and the fact that the culture of baijiu is not being readily adopted by the new 18- to 25-year-old generation of drinkers, it appears that baijiu may yet face a significant decline in the years to come."
This may necessitate some radical new thinking on the part of established brands that rely more on their cultural position in the marketplace than on the type of innovation characterised by Western-style and imported spirits. As the report concludes: "In the long term, traditional brands are going to have to do something quite drastic to maintain their market dominance."
Kweichow Moutai 2011 preliminary profit up 65%
BEIJING - Kweichow Moutai Co, China's most prestigious white liquor producer, said Tuesday that its 2011 preliminary net profit will rise more than 65 percent year-on-year.
In a brief statement filed to the Shanghai Stock Exchange, Kweichow Moutai attributed the robust profit growth to rising prices and sales volumes.
The company raised its prices by at least 20 percent in 2011. The ex-factory price of 53-degree Feitian Moutai, a high-end white liquor in the company's product range, had risen to 1,800 yuan (about $286) per bottle by the end of last year.
Kweichow Moutai ranked fourth on the 2012 list of the Top 10 World Luxury Brands released by Hurun Report Inc, following Louis Vuitton, Hermes and BMW.
The company's net profit hit 5.05 billion yuan in 2010. Earnings per share stood at 5.35 yuan, according to the statement.
The company's shares climbed 1.71 percent to close at 180.44 yuan on Tuesday.
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