Business and Finance

Business Briefs: Super Girl sponsors and Shanghai news

Super Girls play Super Girls on TV

It's been a while since we've mentioned the Super Girl program here on Danwei; fortunately for all you true-believers, we were afforded the opportunity when Super Girl sponsor Mengniu swapped places with Tsingtao at CCTV. There are also some photos floating around this week of a Super Girls-inspired TV drama, but since it's scripted, something doesn't sit quite right.

No domain name controversies this week, but online retailer Dangdang's troubles moved offline when traditional retailers, angered at Dangdang's low prices, convinced a supplier to cut off supplies of a popular sofa-bed.

And we turn our attention to Shanghai, where KFC is finding drive-through business slow, but international corporations are arriving in droves to set up headquarters.

Mengniu on CCTV

Super Girl's network lost a sponsor this week, as Mengniu dropped local Hunan TV for greener pastures at CCTV. Tsingtao Beer, on the other hand, walked away from its partnership with CCTV to sign a three-year contract with Hunan TV. Tsingtao had been the sponsor of the state-owned alternative to Super Girl, "Dream China," so this is an endorsement swap of truly Nicholas Tse-like proportions.

It's seemed that lately Mengniu hasn't really been sure whether it likes CCTV or can't stand it. After it was passed over for Olympic sponsorship in favor of fellow Mongolian dairy Yili, Mengniu had a case of sour grapes and bid just 80 million yuan at the CCTV advertisers' auction, less than half of what its rivals spent. But then this deal came, in which Mengniu will sponsor a new show on CCTV, and VP Sun Xianhong stressed that Mengniu had no plans of ticking off CCTV by funding local programming.

We wait with bated breath for the new product Mengniu will introduce in its CCTV ads. Can anything top Sour Yogurt drink? Can any spokesperson out-dia Zhang Hanyun?

Enthusiasm slow to build for KFC drive-thru window

The first 50 days of KFC's drive-thru window in Shanghai have been slower than the industry average. In the US, drive-thru windows account for roughly two-thirds of the sales of a fast foot outlet, but KFC's first window in China contributes only 30% to its host restaurant. Yum Brands is getting the word out to China's drivers by running promotions with auto clubs in Shanghai.

KFC also said that it hasn't suffered as a result of the bird flu scare, which, as you may vaguely remember, reportedly caused a panic among journalists last month. Though sales dipped slightly at the beginning of the hoopla, they quickly returned to normal levels. KFC did introduce a new, non-poultry item this week - shrimp balls.

Suppliers under pressure in the battle between online and traditional retailers

Dangdang, formerly an online bookstore and now some sort of e-retailer cum auction house, has been selling a sofa-bed for 290 yuan through its website. The list price was 1398 yuan; brick-and-mortar retailers felt the pinch and banded together. They convinced the supplier to cut off Dangdang in order to force it to raise its price. Dangdang remained defiant, and claimed it had sufficient inventory to cover orders temporarily.

Shanghai: Headquarters Central

Despite the many charms of Beijing's CBD, and the joys of working closely together with the government and the government's massive corporations, Shanghai has pulled away as China's most attractive city in which to locate a regional headquarters. In 2004, Beijing had 30 international corporate headquarters to Shanghai's 86, and by June, Shanghai's number had risen to 104.

This trend, according to IT Time Weekly, begain after China's accession to the WTO in 2001; Beijing is seen as constrained by the government and conservative culture, while Shanghai is competitive and forward thinking. A survey of multinational companies considering setting up regional headquarters in China (92% of the total) saw Shanghai favored 2 to 1 over Beijing, with Shenzhen a distant third. Shanghai may not rival New York, Hong Kong, or Singapore quite yet, but it seems clear that it has the desire.

Also in the news this week:

  • At least 25 new compact cars will go on the market in China next year, as vehicle manufacturers respond to consumer trends and changes in government policy.
  • December 1 marked the start of legal drug sales over the Internet, bringing hospitals closer to producers, and causing headaches for the nation's 7445 drug wholesalers.
  • Coke sued the trademark office over rejection of its application for recognition of its Fanta bottle design.

These summaries were collected from the The China Perspective, which covers major business news and trends in the China marketplace.

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