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The Coca-Cola Company Message Board

  • Novalis_97 Novalis_97 Sep 7, 1998 8:33 PM Flag

    Coke owns 30% of China's carbonated drin

    Coca-Cola aims for China's non-fizzy drinks
    market

    SHANGHAI, Aug 31 (AFP) - With 30 percent of
    China's carbonated drinks market under its belt,
    Coca-Cola is now aiming for the non-fizzy segment, telling
    Chinese their tea drinking habit is "hip," a company
    official said Monday. Mickie Leong, vice president and
    general manager, China brand, of the the US company, told
    AFP ready-to-drink tea is one of the segments where
    Coca Cola aimed to be the market leader. The company
    now has just under one percent of the Chinese
    non-carbonated beverage market which makes up 60 percent, of the
    entire beverage market of 62.4 billion cans. "We have
    come to the conclusion that the tea segment will grow
    rapidly and become an important segment in the coming
    years," Leong said. "Tea drinking is becoming hip. It's a
    new drink that is going to thrive." Growth for
    Coca-Cola's China brands, which include Tianyudi tea, mineral
    water and fruit juices and Smart carbonated fruit
    juices, would be 10-fold this year and next year, Leong
    said. Coca-Cola enjoyed a 26 percent growth in sales of
    all its products in China in the first half of the
    year but expects the summer's floods to affect
    production and consumption in the third-quarter. For the
    entire year, the company has forecast strong double
    digit growth. Leong said the company was happy with its
    30 percent share of the fizzy-drinks market but
    could do better in a growing market. Mainland Chinese
    consumed just six servings of cola a year compared to 150
    servings in Hong Kong and 400 servings in the United
    States where Coca-Cola had a 43 percent market share,
    Leong said. "The Chinese market has incredible
    potential," he said. To launch its Tianyudi brand of Oolong
    and Jasmine tea, Coca-Cola has signed on Hong Kong's
    top Canto-pop singer Jacky Cheung. The teas, which
    were recently launched in trend-setting Shanghai and
    Hangzhou, an important tea producing area, were targetted
    at young Chinese aged 16 to 35 who were on the go
    and health conscious, Leong said. Leong said the
    company would succeed in a country where tea-drinking was
    a way of life but also where 99 out of 100 new
    products fail. "We believe we are going to be successful,"
    Leong said. "A lot of it has to do with identifying an
    opportunity and understanding the market, its competitors and
    consumers."

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    • U.S. giants riding out overseas storms -
      multinationals mostly immune to economic crises, so
      far

      WASHINGTON (CBS.MW, 9/4/98) -- While many U.S.-based
      multinational companies have seen their business in Asia and
      Latin America catch a chill from the economic viruses
      in those regions, few seem concerned about the
      potential for full-blown pneumonia...international
      companies have lots of experience with overseas turmoil and
      know how to adjust. Take Coca-Cola (KO), the world's
      largest maker of soft drinks. Even though sales fizzled
      in Japan, Indonesia and Thailand in the second
      quarter, the company's saw overall volume jump a healthy
      10 percent. And the Japanese slump can be traced to
      the first price increase in that country in years,
      said Bill Hensel, a company spokesman.

      Hensel
      said the economic troubles in Asia, which accounts for
      23 percent of Coca-Cola's sales, and Latin America,
      which accounts for 11 percent, have their benefits,
      too. Since Coke tries to buy most raw materials in the
      countries in which it operates, it pays less for
      sweeteners, packaging, advertising and the like when local
      currencies decline against the dollar.

      Coke has also
      taken advantage of the decline in currencies to step up
      investment in many of the more than 200 countries in which
      it hasoperations.

      "We've had a lot of
      experience," Hensel said. "We've got a pretty good handle on
      how to do this."

      Indeed, after the peso crisis
      in 1994-95, which led to a sharp devaluation, Coke
      took a series of steps aimed at reducing the cost of
      its drinks with the goal of retaining the loyalty of
      Mexican consumers whose incomes had fallen. Since then,
      the company has boosted its share of the Mexican
      market to 68 percent from 57 percent.

      • 1 Reply to Novalis_97
      • Interesting article about Indonesia in today's
        New York Times.

        "Rice currently sells at the
        market for 17 cents a pound, more than double the
        Government's target price. For a family of five to buy 22
        pounds of rice per capita each month, it would cost
        $18.70. About 40 percent of Indonesia's families earn
        less than that, meaning that nearly half the
        population cannot afford even a minimum supply of rice.
        "

        "People are in survival mode. They're not interested in
        buying designer jeans. They're interested in buying the
        next kilo of rice."

        I don't reckon they are
        interested in buying too many Coca Cola's
        either.

        TOOHIGH2WIN

 
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