Recruiting in China

Sales of domestic fast moving consumer goods grew 4.4 percent last year, twice as fast as global brands in China, according to a latest report yesterday.

The domestic brands, unlike their global counterparts, managed to capture more effectively trends such as consumers pursuing higher-end products, the OC&C Strategy Consultants' annual Global 50 report said.

"Increased average household incomes and a growing middle class boost consumer demand for better-quality products, which explains why many FMCG categories are going after high-end products, especially those related to health and quality of life," said Jack Chuang, partner of OC&C Strategy Consultant in China's mainland, Hong Kong and Taiwan.

"Domestic players have better relationships and expertise managing distributors and it is easier for them to tailor to local tastes and innovate faster," he added.

Two Chinese companies, WH Group and Tingyi, took the 18th and 47th spots respectively in the top 50 ranking, the report said.

Switzerland's Nestle was No. 1 by grocery sales, followed by Procter & Gamble, PepsiCo and Unilever.

The slowdown in the Chinese economy is having an impact on the whole industry, with alcoholic drinks falling 6.1 percent in 2015 in China.

Annual sales grew for 70 percent of all domestic FMCG brands, compared with 50 percent of global brands operating in China.

A man makes scented candles shaped in the form of pine trees at Dalian Talent Gift Co Ltd's exhibition hall in Dalian.

Dalian Talent Giftis peddling its decorative candles across the globe even as it brightens the domestic market

At the exhibition hall of Dalian Talent Gift Co Ltd, visitors are treated to sights of scented candles in various forms like yellow lemons, chocolate pine nuts and reindeers carrying gifts.

Wang Lixin, chairman of Talent, said every year the firm makes billions of candles at its factories at Dalian in Northeast China's Liaoning province, Chiang Mai in northern Thailand, and Zabno in southern Poland?the world's only candle maker with a global footprint.

One of China's top three candle makers, Talent said the overseas market contributes 90 percent of its annual sales.

Now, it is establishing a global R&D center at Cannes in France, aiming to recruit top perfumers for the design, research and development of fragrant products like scented candles.

"France boasts the world's best manufacturing bases and human resources for perfumes. It is easier to find seasoned perfume makers to work with us," said Wang.

The R&D center is expected to better serve the company's mission to produce fragrant products and high-end candles to beautify homes and signify evolved lifestyles. Wang said Talent is committed to environmentally friendly and sustainable growth.

So, although Dalian is an important petrochemical base in China, and Talent is only 60 kilometers away from its paraffin supplier, the company decided to avoid dependence on fossil energy, and turned to vegetable oil.

Vegetable oils such as soybean oil and palm oil have superseded paraffin wax as the main raw material in Talent's candles. It buys only certified ISPO (Indonesia Sustainable Palm Oil) and rejects those that may cause illegal deforestation.

The renewable oil now accounts for more than 85 percent of its raw materials. "If making money is at the expense of environment, it is worthless," Wang said.

With its high-quality products and pro-green policy, Talent has established long-term and stable cooperation agreements with global retail giants such as Germany's Metro AG, Sweden's Ikea Group and America's Wal-Mart Stores Inc.

That is commendable for a company that was established as a craft workshop in 1997 at a village in Dalian. Ever since, overseas markets have been key to its success.

But the United States and the EU imposed anti-dumping sanctions on China's candle manufacturers in 2006 and 2009 respectively.

China's candle industry was hit seriously as sanctions continued for several years. More than 1,500 Chinese candle makers used to export to the EU before the sanctions. No less than 100 of them had annual export volume exceeding 1,000 tons. However, when the anti-dumping measures were lifted last September, their number had dwindled to only 10, said Wang.

Amid all this, Talent thrived. Wang believes sanctions helped Talent grow by leaps and bounds. For, it adopted a creative response to them.

"Thanks to the allocation of global resources, we not only avoided (the adverse impact of the sanctions) but upgraded our products," he said.

That's not all. It opened new plants in the ASEAN region and the EU, changing unfavorable factors into advantages.

First, the subsidiary in Chiang Mai was founded in 2007. As an ASEAN member, Thailand offers its handicraft industry convenient logistics. More importantly, it is immune from the trade barriers of European and American markets, said Wang.

Next, in the same year, Talent imported advanced automated assembly lines from Germany. The annual output soared to 25,000 tons and exports reached $60 million, ten times that of 2002.

Then, in 2009, in response to the EU's sanctions, Talent took over a candle factory in Poland, a major European candle manufacturing base.

It hired more than 200 local workers and made it one of the biggest manufacturing firms in Zabno. It is now expanding the facility.

It is not easy to set up a factory in another country due to challenges like different languages and cultural backgrounds. But buying out an existing firm worked well for Talent.

"We need not stick a label of our nationality. International vision and international attitude will help a lot to participate in local economic and social development and life," said Wang.

This year, sales volumes are expected to increase by 20 percent, said Wang. What's more, the European and American markets are stable.

According to the National Candle Association of the US, candles are used in seven out of 10 US households. Annual retail sales of candles in the US are estimated to be around $2 billion.

The domestic market is not exactly thriving. But it is growing with more Chinese people starting to use fragrant products like scented candles.

For instance, Shang Wanning, 29, has been using scented candles for several years now. When she comes home from work in the evening, she usually lights a candle and plays some light music.

"The room becomes more comfortable and cozy. It's really a good choice for relaxation and stress reduction," said Shang.

She usually buys candles from Ikea, online stores or from stores abroad.

"There's no difference. Wherever I come across beautiful candles, I bring them home," she said.

Wang of Talent said attempts to satisfy the olfactory sense are innate to human physiological needs. When people are satisfied with vision and taste, the demand for fragrance arises, he said.

International investors have a growing appetite for office buildings in China's key cities like Beijing and Shanghai due to bullish demand, a survey from international real estate service provider CBRE showed on Thursday.

About 35 percent of investors surveyed showed their interest in office buildings in the country's first tier cities this year, compared with 20 percent in 2015. A total of 25 percent showed their interest in the residential sector, 25 percent in the logistics sector and 12 percent in the retail sector.

"Though international investors have more competition from domestic ones, China remains one of the most popular investment destinations in the Asia-Pacific region, following Australia and Japan," said Gran Ji, executive director of capital markets for northern China at CBRE Group,

Meanwhile, with public awareness of environmental protection increasing and green building initiatives on a clear government agenda, the green building concept is increasingly gaining the spotlight in China's commercial building market.

In the 10 select cities CBRE observed, rental premiums of LEED-certified Grade A office space in most cities is in the range of 10-30 percent, compared to non LEED-certified samples. LEED-certified office projects enjoyed higher average rental performance and were in a better position in a weak downward market.

Tencent Holdings Ltd has announced that it will fully open up its big data platform and machine learning technology in a move to build a "sharing economy" based on cloud services.

Enterprises will be able to use a set of big data analysis tools developed by Tencent, helping them gain a better understanding of their clients and improve their products.

The Shenzhen-based internet giant, which owns instant messaging tools QQ and WeChat, has years of experiences storing and analyzing huge amounts of data.

The opening of its core technologies is part of Tencent's efforts to develop cloud services, an area which many other big companies including Alibaba and Baidu are also tapping into.

"Development of a sharing economy is closely related to cloud services" said Ma Huateng, chairman of Tencent. "Like transportation, accommodation and many other areas, cloud services are also a kind of sharing economy."

He said cloud computing has become one of the key areas Tencent focuses on and the company is dedicated to opening its IT resources and technological capabilities to outsiders.

"In the past, enterprises were only users of internet technology. Now, as they engage themselves in the cloud, they are becoming a part of the internet ecosystem," Ma said at the 2016 Tencent Cloud Summit held in Shenzhen this week.

Cloud technology has achieved greater importance in recent years as more and more Chinese enterprises integrate themselves deeper with the internet. However, it remains difficult for companies, especially smaller ones, to build their own data center because it involves large capital investment and a waste of resources, said Dowson Tong, senior executive vice-president of Tencent.

Cloud services help enterprises get access to more resources while reducing their operating costs, Tong said.

According to the 2016 Internet Trends report, services provided by Tencent are the most commonly used by Chinese internet users. More than 50 percent of their time on the internet is spent on Tencent services.

"We are not offering cloud services as a separate business. Instead, it is a part of Tencent's entire strategy. Enterprises will be able to get access to all Tencent platforms by using its cloud services," Ma said.

Joe Weinman, a leading cloud computing strategist, said Tencent has a good background in offering cloud services. The company owns a huge amount of consumer data and knows what consumers need. This will enable it to do better in user experience and improve availability of its products, he said.

Business activity in China's service sector expanded slightly in June, a private survey showed Tuesday.

The Caixin China General Services PMI (Purchasing Managers' Index) came in at 52.7 in June, up from 51.2 in May, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media Co. Ltd.

A reading above 50 indicates expansion, while a reading below 50 represents contraction.

China remains the most competitive country in the manufacturing sector, but it will be replaced by the U.S. by 2020 because of shortcomings in human resources, innovation, resources policies and infrastructure, a report released on Saturday noted.

Considering its relatively low labor costs and strong infrastructure policy, China was ranked No.1 in manufacturing competitiveness, according to a global survey of more than 500 companies, Guangzhou-based newspaper 21st Century Business Herald reported during the weekend.

The survey was part of a report released jointly by Chinese think tank ChinaInfo100 and multinational professional services provider Deloitte.

The report said China has established an ecosystem to encourage innovation, partially because research and development spending has increased significantly in recent years, according to the media report.

In some areas, China has already surpassed the U.S. -- for example, the Tianhe-2, a supercomputer developed by China's National University of Defense Technology, is the world's fastest supercomputer, it said.

However, global economic growth will continue to slow in 2016, which will depress industrial output. China is lagging behind the U.S. in several aspects such as human resources, innovation and the legal environment, the report said.

By 2020, the U.S. will become the most competitive country in manufacturing, followed by China, the report predicted. Germany will remain No.3.

In China, labor costs have increased about 150 percent in the past decade, which has become a major concern for manufacturers, the report said, adding China's aging society also worries many investors.