Baby Formula in China: Foreign Brands Coming In, Advertising Going Out

Several months ago I shared a story of a young man who occasionally makes a long trip to Macau from his home in mainland China so he can purchase baby formula produced in New Zealand. He does this because of previous milk-safety scandals in China, and he wants to be sure that his cousin's infant receives a genuine non-Chinese baby formula. He is not alone in his concerns, and foreign brands of baby formula are well aware of the demand in China for their products. In Buy Buy China, Dror Poleg reports that this combined with Chinese taxes leads to significantly higher prices for foreign baby formula:

The brands, in turn, make the most of their captive market [in China] and mark up prices up to 4 times their level in the US or Europe. A tin of foreign baby formula ranges from around RMB 200 to RMB 400. Some high end products – such as Wyeth’s Illuma, Nestle’s NAN H.A., and Mead Johnson’s Enfagrow - cost even more. China now levies a 10% tax on imported baby formula in an effort to promote domestic alternatives. But demand driven by safety concerns is inelastic, meaning Chinese consumers absorb the extra costs while foreign brands continue to grow their market share. Similar, if more moderate, dynamics can be seen in the market for other baby products.

The higher cost of some products in mainland China is yet another reason why the Macau-Zhuhai border is a key point in a grey market sales network.

Chinese brands are of course also aware of the situation and hope to improve their image. But it may seem surprising that one well-known Chinese brand is attempting to do this through advertising not only in China, but in London as well. In fact, Londoners themselves are confused. As reported by Boruo Chen in Asia Society:

Yili, a Chinese milk company based in Inner Mongolia, recently launched an ad campaign on London's iconic double-decker buses that had locals scratching their heads. The ad shows Chinese men and women, none of whom are recognizable celebrities or athletes, alongside the brand's logo, in Chinese. No Yili products are for sale in London, and few clues on the buses hint as to the significance of these people.

Is this a sign Yili has made a huge marketing blunder? Maybe not. Poleg claims in another article on Buy Buy China that Yili's main goal for its London advertising is not influencing British perceptions. Instead, Chinese consumers are the target:

On closer inspection we found the London campaign is part of a broader effort to restore Yili’s reputation back in China, following its implication in scandals involving Mercury- and Melamine-tainted milk formulas. The campaign is orchestrated by Ogilvy & Mather and includes a cooperation with Youku, China’s leading video site, and a domestic advertising campaign as well. The London ads are used to appeal to Chinese Olympic visitors and serve as fodder for a PR push in the Chinese media, trying to portray Yili as an international brand that is well accepted beyond China’s borders (here, for example, in Chinese).

Poleg is skeptical that such a campaign will be successful. However, Darren Wee in the Financial Times expresses reason for optimism (article is behind a paywall but can be read in full if you click its entry on Google, Bing, Yahoo!, etc. -- do a search on one of the sentences below to find it):

Chinese consumers love western brands, so Chinese companies have begun to advertise in the west to build a reputation at home.

Sales of Yili Shuhua milk rose 12 per cent when it featured in the 2011 Transformers  film.

This result suggests that Yili knows what it is doing, even if Londoners are baffled.

It is fascinating to consider how advertising in a far away country may prove valuable at home for Yili. And not only does it suggest some of the ways in which businesses based outside of China can profit even when a Chinese company is targeting Chinese consumers, it is also an example of how evaluating the quality of a design, whether a marketing campaign or a mystery beverage vending machine, requires understanding its purpose.

If the campaign proves to be a success for Yili, it is possible even more Chinese companies will attempt a similar strategy. Could Londoners soon find themselves regularly puzzling over Chinese ads?

At least for the short term*, London's advertising sales agents probably hope so.




*The question of whether it would be good for them in the long term raises some interesting issues I would want to further consider before commenting.

Mystery Beverage Vending Machine in Macau

A mystery beverage vending machine in Macau -- which one would you choose?

I came across the above canned beverage vending machine a couple of years ago at the Macau Fisherman's Wharf -- a theme park that "includes over 150 stores and restaurants in buildings built in the style of different world seaports such as Cape Town, Amsterdam and Venice, six rides, a slots hall, a 72-room hotel, and a casino" (one visit was more than enough for me). Fortunately for anyone who hopes to profit from beverage sales, the machine did not appear to be common elsewhere in Macau. I would expect that in most cases people have little desire to pay for a randomly-selected drink (in this case, some may not have even realized/understood that a drink could be purchased).

But maybe such a machine is appropriate at an entertainment area in a city full of gambling and some people enjoyed the risk or surprise it offered. Maybe not profit but instead amusement was the goal -- anything sold was a bonus. Or maybe the hope was that it would catch people's attention and cause them to more closely examine the Coca-Cola products if offered.

Whatever the case, it certainly caught the attention of me and several other passersby. Though, I did not see anyone make a purchase.

Hong Kong Versus China in the Olympics

As can be apparent in sports such as keirin (a cycling event) and table tennis (ping pong), Hong Kong fields an Olympics team that is distinct from China's team. China permits Hong Kong to do this under a right detailed in Chapter VII, Article 151, of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China:

The Hong Kong Special Administrative Region may on its own, using the name ""Hong Kong, China"", maintain and develop relations and conclude and implement agreements with foreign states and regions and relevant international organizations in the appropriate fields, including the economic, trade, financial and monetary, shipping, communications, tourism, cultural and sports fields.

Not only does Hong Kong compete in the Olympics, it came close to facing off with China for the gold medal in this year's table tennis team event. However, Hong Kong lost in the semifinal and will compete for the bronze medal while China will face South Korea in the gold medal match. [Update: China won the gold medal in both the men's and women's team event. Hong Kong lost to Germany in the men's bronze medal match.]

If the idea of Hong Kong competing against the rest of China in the Olympics seems peculiar, things get only more complicated when considering who is on Hong Kong's table tennis team. According to the AP:

Hong Kong’s three players were all born in mainland China and moved to Hong Kong when they could not make China’s national team.

This may raise questions about whether the Hong Kong team provide a double opportunity for some mainland Chinese to compete in the Olympics. As reported by Reuters, the Hong Kong table tennis players tried to explain their situation:

"We are definitely loyal to Hong Kong, otherwise we would be playing for China," said Hong Kong's Chu Yan Leung.

But then his team-mate Tang Peng pointed out: "We are playing for Hong Kong but there is no difference between Hong Kong and China, we are in the same country."

Their words seem to raise more questions than answers. For example, what are the implications of Cheung's "loyalty" to Hong Kong? And the claim of "no difference" further highlights Hong Kong's unusual situation. Although Hong Kong is part of China, Hongkongers enjoy more freedoms than mainland Chinese and there are numerous other differences which exist. There is even a border between Hong Kong and mainland China which can make it easier for someone from India than someone from China to be allowed entry into Hong Kong.

One might think that a Hong Kong team could create a distraction for China that it would prefer to avoid. But I suspect China has no interest in dissolving it. The reason has nothing to do with Hong Kong's laws or providing some Chinese two opportunities to compete in the Olympics.

Instead, the reason has much to do with another team in the Olympics that China would prefer not to stand out too much and may want to send a signal.

Chinese Taipei.

Mr. & Mrs. Kidney Potatoe on a London Bus in China

I have no plans to write about the Olympics, but yesterday in China I did see something that made me think about London. At the Coco Park shopping center in Shenzhen, Guangdong province, I stumbled upon this section of a children's play area:

For a price, the small train ride would circle around and the bus ride would lightly bounce. The front of the bus listed locations in London, not unexpected given its red double-decker design and the nearby "England Train".

Seeing a London-ish scene in China added a little twist to my day. But what threw me for a loop were the images on the bus of what appear to be Mr. & Mrs. Potato Head, the toys that recently celebrated their 60th anniversary, labeled as "Kidney Potatoes" with the small print "Laugh With Amusement......" below.

Mr. & Mrs. Potato Head were designed in the U.S., so it seemed curious to me that their images would be used on a British-themed ride. Why not display an image of something more British? And why would Mr. & Mrs. Potato Head be incorrectly labeled as "Kidney Potatoes"?

Maybe someone sought an alternative name for Mr. & Mrs. Potato Head in the hope of avoiding a copyright/trademark problem. Maybe this is a promotion for a knock-off product being sold in Shenzhen. Maybe the designer believed that kidney potatoes were particularly British and then searched for potato images that would be appealing to children. Maybe the designer thought that Mr. Potato Head looked British. Maybe there was a Mr. & Mrs. Potato Head fad in London. I can think of many other possibilities as well. Some may seem more likely than others, but researching this could lead to surprising and unexpected answers.

At the risk of disappointing, I must say that I do not plan to make any investigations (nonetheless, if you have something to add I would be interested to hear about it). Instead, I will later touch on several design and research related issues raised by this example. For example, although it caught my attention, I doubt any of the kids playing there were concerned about the "Kidney Potatoes" label.

But I did hear some of them laughing in amusement.

Chinese Temples on the Macau Peninsula

Although the Portuguese influence is unmistakable, much traditional Chinese culture can still be found in Macau. To capture just a sliver of it, I will share some photos from three of the more well-known temples on the Macau Peninsula. Unlike many temples in mainland China, none of them charge an entrance fee (a topic for another day). The first four photos are from Kun Iam Temple, the next four are from A-Ma Temple, and the final two are from Lin Fung Temple. They include a variety of scenes, including monks offering their prayers as a woman (not visible) burns paper replicas of various items, such as a car, so they can be sent to her parents in the afterlife.

The Julliard School Betting on Artistic Growth in China

Chengcheng Jiang in Time reported on the Julliard School's plans to open a campus, its first outside of the U.S., for pre-college & pre-professional students in Tianjin, China. Some of the reasons for Julliard's new campus highlight the different directions that China and the U.S. are headed in their commitment to the arts:

The Juilliard brand is landing in China at a time when interest in — and money for — the arts is on the rise. As part of President’s Hu Jintao‘s plans to build the nation’s soft power, the central government has established ambitious targets for the development of what it calls China’s ‘cultural industries.’ In the current Five Year Plan, the government’s blueprint for growth, for instance, 2 billion RMB, or about $315 million, has been earmarked for a national arts fund.

This level of enthusiasm and funding is a welcome change for American educators who are used to dealing with dwindling audiences and funding cuts. “The tradition of government funding of the arts has never existed in United States,” [The president of the Julliard School, Joseph Polisi,] told TIME on a recent visit to China to announce the new campus. “What has supported the arts for most of the 20th century in America was the value system where the public educational system saw the arts as being important as part of an overall education.” That, of course, has changed. But in China, he says, parents and school systems increasingly value music. “I see Chinese students, I see Chinese faculty members, I see Chinese educational administrators, who are all working towards an environment that is supportive of the classical arts.”

Like the aviation industry, the development of the arts could be representative of broader changes in China. And similar to some other fields, if the U.S. shoots itself in the foot and does not continue to support the arts, America could decline in a field where it now shines regardless of what China does.

Another set of issues raised by Julliard's plans relate to censorship. Julliard will be joining a variety of other American institutions of higher education with campuses or with plans to build campuses in China. They have had to consider how to best foster open learning in China. Isaac Stone Fish in The Daily Beast reported on the degree to which American universities have adjusted to China's censorship and how it is not easy when it is sometimes not clear what is off-limits:

Rowena He left China in the 1990s and is currently teaching 
courses at Harvard University about the 1989 Tiananmen Square movement
 and its aftermath—a course that she could not teach in China. “The 
problem is, we don’t know where the line is and what the punishment
 would be. That’s where fear and self-censorship comes from,” she says.

It would seem, though, that Julliard may have fewer challenges in this regard and may be less likely to have professors barred from China. Although there are many popular music songs which are banned in China, I am not aware of any cases where the style of music typically studied and performed at a school such as Julliard has been banned. However, there are certainly pieces which have the potential to be considered sensitive [if you are aware of any such pieces being banned, I would be curious to hear about it].

Regardless of the challenges that may be ahead, I think it is wonderful that Julliard is pushing forward in China. It will help to further spread the arts and creative expression in China. It will also provide Julliard a valuable mechanism to funnel talented and trained musicians to its main campus. Like other leading schools, it continues to draw many talented people to the U.S.

Whether the U.S. appreciates how valuable that can be and works to ensure it continues is another question.

I [Kid] You Not: A Chinese Name Lost in Transcription

Although some Chinese adopt a foreign name to accomodate those who speak other languages, others stick with their Chinese name in all situations. When writing in another language such as English, mainland Chinese will typically use pinyin -- the official method in several countries to write Chinese words in a Latin script. For example, the full name of the Chinese artist 艾未未 is Ai Weiwei in pinyin, and the full name of the retired Chinese basketball player 姚明 is Yao Ming. Some Chinese names, such as Xiaoxin or Cuiping, can be particularly challenging to pronounce, write, or remember for people who are not familiar with the pinyin system. Otherwise, using the pinyin form of a Chinese name is straightforward -- usually...

Yesterday, after exchanging several emails in English with a Chinese acquaintance who prefers not to use a foreign-language name, I noticed that she would always write her family name in pinyin or her given name in Chinese characters. Not once had she ever written her given name in pinyin.

As I started to ponder whether there might be an interesting story explaining this curious pattern, I replied to her most recent email.

Her given name is 诗婷. Typing it or saying it in Chinese never previously struck me as odd in any way.

But after I finished typing her name in pinyin for the first time, I paused and stared at the result: Shiting.

Mystery apparently solved.

Although not a word in English, her name in pinyin closely resembles an English word that most people would not want as a name. I could appreciate why she might want to avoid it. But her current strategy might not be practical if she were to work in a multinational setting or live in a non-Chinese-speaking country. Such are the occasional challenges of using one's original name in a foreign language.

What would you do if you were Shiting?

The Narrow Streets and Alleys of the Macau Penisula

Far (in Macanese terms) from Macau's Coloane Village, the northernmost region of Macau sits on a peninsula connected to the Chinese city of Zhuhai. Macau Peninsula includes a number of casinos and historical areas frequented by visitors, including Guia Hill, but I most enjoy meandering through its numerous narrow streets and alleys. Based on where I have been in the past, sometimes they can feel somewhat like Tapei and othertimes somewhat like Madrid. However, its mix of Cantonese and Portuguese cultures, which can be felt in so many ways, sets Macau apart from anywhere else. It is simply a Macanese experience.

Scenes of Coloane Village, Macau

Since I recently enjoyed some blue skies in Macau, I will take a break from Shanghai and share several series of photos from a special city with a fascinating mix of Cantonese and Portuguese culture. Below are a handful of scenes from Coloane Village which is in the southernmost portion of Macau -- about an hour away by bus from Macau's border with Zhuhai. The buildings provide a taste of old Macau which feels rather different from Macau's new immense casinos. At least when I visited on a weekday in March it did not feel overwhelmed with tourists, and it maintained a small village charm.

Homes

Where I had a Macanese lunch

At Old Tin Hau Temple

Quiet lane

More homes

Famous Lord Stow's Bakery

One of Macau's delicacies from Lord Stow's -- a Portuguese egg tart

Looking across the water at Zhuhai's Hengqin Island

The Future Intercity Railway Station at the Macau-Zhuhai Border

[Update at end]

In February I wrote a post about the variety of transportation methods I used to travel from Guangzhou to Zhuhai to Macau. The trip began with a subway ride to the large Guangzhou South Train Station (see the post for photos of some impressive architecture) and ended with me in Macau after having walked across its border with Zhuhai. One of the highlights of the trip was the high-speed train on the Guangzhou-Zhuhai Intercity Railway. Unfortunately, at the time it only reached as far as northern Zhuhai, and a long taxi or bus ride was needed to get to more central locations.

Someday the line will extend to Zhuhai border with Macau at Gongbei Port in central Zhuhai. Although some online sites currently claim this extension will open this month, I think I have some good evidence from last week that more time will be needed for its completion:

A section further away from the Gongbei Port border crossing

An opportunistic photo closer to the Gongbei Port (security soon explained I was in a restricted area)

Although it is not yet open, progress appears to be continuing on what should be a convenient transportation method for some of the people traveling to Macau -- even if all they want to do is buy safe baby formula, gamble large amounts of money, or eat good Portuguese food. And it is yet another sign that China's infrastructure is continuing to grow.


Update (March 4, 2013): The Zhuhai Train Station is now open. See the more recent post "The Good and Bad of the Extended High-Speed Guanzhou-Zhuhai Intercity Railway".

The Fate of the Android Store in Zhuhai, China

Update at end

More than four months have passed since I first posted about the "Android store" I stumbled upon after I took a random bus trip in Zhuhai, Guangdong province. One issue some people raised was whether its days were numbered due to possible actions from Google. But I assumed that the store, like many unauthorized Apple stores in China, would not face any immediate interference.

Last week I happened to be in Zhuhai, so I returned to its Nanping district to checkup on the now semi-famous store. At first glance, it did not appear much had changed:

Still there

The inside of the store was also mostly the same as before. One difference was that there were no Apple computers for sale -- only iPads and iPhones were available (see here for earlier photos from inside the store). Another difference also caught my eye. The staff were wearing store shirts:

She was happy to have her photograph taken.

Sorry, the shirts are not available for purchase.

The Android robot is displayed on the front of the shirt, Apple's logo is on the right sleeve, and Android, Windows Phone, Symbian, and iOS are on the back of the shirt. Given the store's sign, it seems fitting that Android is the most prominently featured brand, even in the shirt's color. It is worth nothing that what appears to be the name of the store on the shirt is the same as the Chinese words which appear underneath the Android logos on the store's main sign.

Although finding that the store still existed did not surprise me, there was something else I was less sure about. Would the store inspire others?

I found the answer at another store just down the street. Here it is as I saw it several months ago:

One of the many stores in the area with a Nokia sign

But the store has since undergone a bit of a makeover:

The large Nokia sign on the outside of the store has been replaced with the Android robot and what is presumably the store's Chinese name (which is similar to the other store's Chinese name and also does not include the Chinese word for "android"). The Nokia sign on the inside of the store has been replaced with a Samsung sign. Another outside face of the store is now partly in the Apple style, but it curiously includes the Android logos on the middle column. However, this mix of Apple and Android may not be so surprising since this same store previously had an ad for the iPhone that included a singing Android robot.

I will refrain from any deep commentary. I simply wanted to share that not only does the original Android store remain, but it appears to have an imitator.

And now I wonder if more will soon appear.



UPDATE: A little over a year later, much had changed. See "The Fate of the Android Store in Zhuhai, China: Part II" for more.

Shark-Friendly Soup in Macau

Andrew Sullivan recently shared several pieces about shark fin sales covering topics ranging from the dispute over its ban in California to its strong market in Hong Kong. The eating of shark fins is an issue that has garnered much attention due to the practice of shark finning, where the fin is removed and then the shark is dumped back into the water still alive. However, not all shark fins are obtained through this process, and Sullivan mentions that "scientists and conservationists support managed fisheries over all-out legislative bans".

In a land rife with fake products, I have wondered how much of the shark fin soup sold in China actually includes genuine shark fin. So while walking around Macau last week this pot of soup sitting outside a restaurant caught my attention:

The value of advertising artificiality

Regardless of whether customers primarily order the soup due to concerns about the welfare of sharks or a desire not to pay the higher price for genuine shark fin soup, this seems to be yet another potential way to reduce shark finning.

Chickens may have some objections though.