02/25/15

Permalink 11:02:04 am, by dacare, 445 words, 150 views   English (US)
Categories: News of China

Amway sales dip in largest market


An outlet of Amway Corp in Yichang, Hubei province. The company's revenues fell 8 precent to $10.8 billion in 2014.

Amway Corp, the world's largest direct sales company, announced its revenues fell 8 percent to $10.8 billion in 2014 due to a dip in Chinese mainland sales and fluctuations in currency exchange rates.

A survey by China Knowledge Economy's Direct Selling magazine found that Amway's revenue in the Chinese mainland decreased from 29.3 billion yuan ($4.72 billion) in 2013 to 28.7 billion yuan last year, but the Chinese mainland still remained the company's biggest market.

It is the first decline for the Amway in the Chinese mainland after growth rates hit 27 percent over the previous five years and 45 percent for the decade, according to company reports.

"Sales in 2014 reflect the significant efforts by Amway business owners and employees who continue to do well around the world despite challenging operating environments found in several nations that are major markets," said Amway Chairman Steve Van Andel.

"We continue to see great strength globally as select markets hit record sales numbers and others show resilience that point to strong results in 2015," he said.

Some of the company's most-mature markets, including South Korea and Taiwan, registered strong growth in 2014. Sales in Brazil, Mexico, Argentina, Costa Rica, Guatemala, Chile, Panama, Italy and Spain saw double-digit growth, while markets influenced by political unrest and economic slowdowns?Russia, Thailand and Ukraine?showed resilience and produced solid results, according to the company.

Amway's top 10 markets in 2014 were the Chinese mainland, South Korea, Japan, the United States, Thailand, Russia, Taiwan, India, Malaysia and Ukraine.

The company's sales were concentrated in nutrition, beauty, durables and home care, with nutrition products continuing to lead the way, accounting for 43 percent of direct sales revenue.

Beauty products contributed 25 percent, followed by durable products at 19 percent and home care products at 8 percent.

Amway President Doug DeVos said the company is optimistic and well-positioned for growth in 2015 and beyond as it opens five new manufacturing facilities, many new Amway experience centers and improves the online experience.

According to Direct Selling magazine's survey at the end of January, 49 companies had direct sales permits on the Chinese mainland and 46 were operational. Together they generated 159.91 billion yuan in total sales, a 24.3 percent increase over 2013.

The increase shows steady progress in the direct sales industry in the country, said the survey, as domestic companies catch up with foreign peers.

Following Amway, Malaysia-based Perfect China Co Ltd ranked No 2 in China with 28 percent growth in sales to 22.3 billion yuan last year. Herbal health product maker Infinitus China Co Ltd soared 37.5 percent on sales of 16.5 billion yuan. Revenues for skin care and nutrition product maker Nu Skin declined from 6.4 billion yuan in 2013 to 4.4 billion last year.

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02/16/15

Permalink 08:33:44 am, by dacare, 310 words, 305 views   English (US)
Categories: News of China

Property developers’ sales revenue slumps in Jan

Shanghai-listed property developer Gemdale Corp announced over the weekend its sales volume fell by 19.8 percent year-on-year in January, making it the latest of a long list of developers which reported declining sales performance in the first month of 2015.

Gemdale Corp said Friday in a statement posted on the Shanghai Stock Exchange that its transaction area fell by 8.6 percent in January from a year earlier, while sales revenue also decreased by 19.8 percent year-on-year.

The announcement came after statistics showed that the total sales revenue of China's 10 leading property developers, including Vanke Co and Poly Real Estate Group Co, fell by 5 percent year-on-year in January and decreased by 58.4 percent from the previous month, according to a report from news portal caixin.com released on Thursday.

Vanke Co, the country's second-biggest developer by sales, registered sales revenue of 23.2 billion yuan ($3.7 billion) in January, falling by 16.1 percent year-on-year.

The slump in transaction areas and sales revenue in January is due to strong purchases from consumers in December under preferential home prices, which reduced the demand for housing in January, Liu Yuan, a senior research director at real estate consultancy Centaline Group in Shanghai, told the Global Times on Sunday.

Most of China's property developers experienced a hard time last year amid a slowing economy and offered price concessions in December in order to reduce the inventory pressure facing their companies, Liu said.

"According to our statistics, transaction areas in 40 major Chinese cities dropped nearly 30 percent in January from a month earlier, but the slump is temporary," Liu said.

The transaction areas and sales revenue are both expected to rebound slightly this year following a raft of forecasted loosening measures such as a potential interest rate cut, which will help to reduce the financing costs of housing loans, Zhang Xu, an analyst with Homelink Real Estate Agency in Beijing, told the Global Times on Sunday.

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02/15/15

Permalink 10:51:09 am, by dacare, 218 words, 116 views   English (US)
Categories: News of China

Xiaomi aims to bite Apple on its turf

Xiaomi Corp will initially start small by selling products like smart wristbands and mobile power chargers when it opens an online store in the United States, the Beijing-based company said yesterday.

The store marks the first step for the start-up Chinese smartphone vendor to penetrate the US market, and key products like smartphones and tablets won't be sold initially, said Xiaomi.

The new US online store, called Mi.com, will sell products such as bands, chargers and headphones, Xiaomi said at its first press conference in the US yesterday.

"We will bring more exciting software and hardware products to more consumers in overseas markets," Lin Bin, Xiaomi's president, said in a statement.

Xiaomi currently sells its products in China and seven other markets, including Singapore and India.

By the third quarter of last year, it ranked the No. 1 smartphone vendor in the Chinese market, the world's biggest.

Xiaomi yesterday also said that a total of 100 million users globally are using its MIUI operating system.

Xiaomi expects to sell 100 million phones this year after it sold 61.1 million units last year, a 227 percent jump from 2013, beating its annual target of 60 million units.

In 2014, Xiaomi's revenue surged 135 percent to 74.3 billion yuan (US$11.91 billion).

After the firm raised US$1.1 billion in December, privately-owned Xiaomi is said to be valued at US$45 billion.

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02/13/15

Permalink 09:27:07 am, by dacare, 664 words, 154 views   English (US)
Categories: News of China, Manufacturing & Industry

Manufacturing sector reaches critical juncture

Closures, overseas investments illustrate plight facing local factories

Now is not a good time to be a Chinese factory owner. According to recent media reports, a growing number of local manufacturers are opening plants in the US as they seek to avoid the badge that comes with selling "Made in China" products.

Meanwhile, many other local factories are struggling with labor shortages, rising costs, overcapacity problems and thinning demand. In response to such pressures, low-end manufacturers are increasingly investing in Southeast Asia, where production costs are more competitive.

Both of these trends signal the need for change in China's manufacturing sector. Over recent decades, Chinese factories have become synonymous with low-quality, low-value-added products. Local manufacturers need to shake off this image by moving up the production chain. And with China's GDP slowdown weighing on the country's industrial sector, the need to advance is more pressing than ever.

According to reports, several of China's largest and historically most successful manufacturing enterprises have not been immune to the challenges brought by changing times. Silitech Technology Co, a major supplier for Nokia, has suspended production since November. At its peak, the Suzhou-based company had more than 10,000 employees, but has reportedly struggled since Nokia sold off its handset division to Microsoft last year.

In December, United Win Technology Co, also in Suzhou, Jiangsu Province, announced its closure due to a financial crisis. It had previously been a major supplier for Apple Inc and had also cooperated with Chinese smartphone brand Xiaomi. The company's closure is said to have left more than 2,000 workers unemployed.

Similar shutdowns are also said to be plaguing many of China's traditional manufacturing hubs - including Dongguan, Guangdong Province, and Wenzhou, Zhejiang Province.

Of course, not all of the worries facing factory bosses are bad. Improvements in Chinese labor laws have made workers more willing to fight for better pay and conditions. For instance, upwards of 2,000 workers at Yue Yuen, a shoe factory in Dongguan, reportedly protested recently in front of the company's gate for greater social security benefits. Yue Yuen is an assembler and producer for a host of big-name global brands, including Reebok, New Balance, Puma and Timberland.

But while China's manufacturing sector has been expanding at a rapid clip for decades, most local factories remain at the bottom of the technological food chain, where they subsist on rock-bottom unit pricing and outdated technologies. Without upgrades and reforms, producers will become even more marginalized. Those who cannot adapt will be weeded out by the market.

Chinese planners have suggested that the country's path toward a "new normal" pattern of development will necessitate greater innovation in the manufacturing sector. In a report issued Tuesday, research firm IDC described the agonies facing Chinese factory owners, while also putting forward predictions for the year ahead. During 2015, analysts at IDC foresee - among other things - the rise of intelligent factories, cloud computing and industrial robots (the latter of which could soon put many low-skilled Chinese workers out of jobs).

Chinese manufacturers will have to pursue these and other technological innovations if they want to stay in business. Fortunately, China is rapidly emerging as a research powerhouse. In 2012, the country overtook the European Union in terms of research spending as a percentage of GDP, according to a report issued in 2014 by the Organization for Economic Co-operation and Development.

The need to transform through innovation and research is particularly great among manufacturers focused on the highly competitive consumer market. If given the choice, many Chinese will purchase Japanese or South Korean-made goods. Such products typically carry high-price tags but are widely seen as being of higher quality than Chinese-made equivalents.

Chinese manufacturers need to focus especially on technologies that will help them become more specialized. They must also build brand value through higher-grade products. Ultimately, companies will have to choose development models that conform to their own conditions. Finding the right path forward won't be easy, but sitting still in changing times is a surefire way to fail.

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02/12/15

Permalink 10:01:14 am, by dacare, 181 words, 129 views   English (US)
Categories: News of China

Chinese phone makers welcome Qualcomm fine

Chinese cellphone makers on Wednesday expressed their support of a record anti-trust fine levied on U.S. chip maker Qualcomm.

The National Development and Reform Commission (NDRC) ruled Qualcomm had abused its market dominance and charged discriminatory fees in the Chinese market when licensing mobile chip technology. The company was ordered to pay 6.09 billion yuan (994 million U.S. dollars).

Telecom giant Huawei told Xinhua that the NDRC's decision would benefit telecom product manufacturers and Chinese consumers, as well as improve intellectual property protection.

Huawei said the decision would create a fairer competitive environment and would prompt domestic research.

ZTE also welcomed the anti-trust ruling as it would have a significant effect on the global telecom industry.

The NDRC's investigation began in November 2013. The watchdog said the fine would stop the company's monopolistic practices, safeguard fair market competition and protect consumers' interests.

It said Qualcomm improperly bundled unrelated licenses with baseband chip sales, forcing Chinese customers to pay for licenses they did not need.

San Diego-based Qualcomm said in a statement that it would honor the fine and modify its licensing practices.

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02/11/15

Permalink 10:55:57 am, by dacare, 113 words, 124 views   English (US)
Categories: News of China, Manufacturing & Industry

China's machinery sector continues to grow in 2014

China's machinery industry continued to expand in 2014 but at a softer pace due to sluggish domestic demands and piling inventories, new data showed on Wednesday.

The added value of the sector increased 10 percent year on year in the last year, slightly down from 10.9 percent in 2013, data from the China Machinery Industry Federation (CMIF) said.

Chinese machinery enterprises posted combined revenues from main businesses at 22.2 trillion yuan (3.62 trillion U.S. dollars), up 9.4 percent from a year ago. The revenues grew 13.8 percent in 2013.

Chen Bin, executive vice president of the CMIF, said the industry, still plagued by overcapacity, will likely continue to slow as they are confronted with weakening demands and fierce competition at home.

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