Monday, March 16, 2015

Interview of Bong Dan, Intern in market research firm

Interview of Bong Dan, Intern in market research firm

Q: Can you tell us more about yourself? Education? Experience?
Shanghai University of International Business and Economics
Major:International Economics and Trade (Senior)
Minor&University English (Shanghai International Studies University)
Student Entrepreneurship Center
2011.09-Now Vice general manager & Director of Promotion and Publicity Dept.

SXL Group (Shanghai)(Consulting Company)
2013.07-2013.09                Project Assistant
GMAC-SAIC Automotive Finance Co,.Ltd.
2014.05-2014.09                Marketing&Sales

Q: Can you tell us more about the city where you come from in China in terms of culture, economy and history?
I am from Shanghai. Throughout the past century, Shanghai has had numerous name tags attached to it; like "Paris of the Orient" and "Pearl of China". Images of Shanghai more than any other Chinese city, are bountiful in the west. A visit here therefore, is naturally tainted to some extent, with a preconception of how the city will be. And As the largest and most prosperous city in the nation, Shanghai is the economic, financial and cultural center of China.

Q: What brought you to Daxue Consulting?
I want to learn more about Consulting Company, and learn about different methods of solving problems. Furthermore Daxue is a famous consulting company in my school.

Q: Can you tell us about the biggest change you have been witnessing in China over the last 10 years?

The biggest change I have witness in China is the the fast development of Metro. Not only in Shanghai, but also in many small cities.  For Shanghai 10 years ago there were only 3 Metro lines but now there will be 22 lines in Shanghai.

Q: China has changed so quickly. What is your vision of China in 10 years?
China will still change much but the speed of change will be lower than before. Maybe there will be another crisis about national economy. But from my view, this will be a big chance of China to become a developed country.

Q: How do you see yourself in 10 years?
I may have a good job, maybe not a high salary job but a job I liked, after learning enough knowledge. And live a happy life with my family.

Q: What do you do in your free time? Why? What for?
I surf on the internet in my free time. Surfing on the internet let now what is happening now all around the world and many comments about it. Also can learn much knowledge that our teacher will never told us.

Q: What is special about you? Cooking? Playing an instrument? Sport? Painting? Own story? Etc.
Hand writing. I started to learn it from 4 years old. And stopped it at 15 years old because some physical reasons.

Monday, February 2, 2015

Pork market in China

Pork market in China

A huge Chinese demand for pork

Chinese rising middle class consuming a big quantities of pork is responsible for the increasing demand over the last decades. Pork is definitely Chinese people favourite meat. In 1975, average annual pork consumption per capita was around 8 kilograms in China and 25 kilograms in the USA. Today, Chinese people consume about 39 kilograms pork a year whereas American consumption remains stable with 27 kilograms of pork in 2014. Following this booming demand, suppliers increased production significantly. China is today the world's largest pork producer. Half of the global pork population is “living” in China. Pork accounts for 67% of Chinese production in retail weight. In 2013, China's output reached 53.8 million tonnes corresponding to half of the global pork output. A major part of this production is for domestic consumption and this trend is likely to last. Indeed, China only exports about 70000 million tonnes a year to Hong Kong, Macau, South Korea and Albania, with Hong Hong accounting for 80% of the pork shipped abroad.

Imports in addition to domestic production

This huge domestic production is not enough to satisfy the Chinese demand. Consequently, China imports pork. Canada and the USA are among China pork suppliers. However, those imports were interrupted after ractopamine, a growth stimulant was discovered in the meat.
Chinese people are more and more concerned about the safety of the food they purchase. When they can afford it (and the number of consumers who can afford it is increasing), they do not hesitate to buy imported meat whose brand they trust. Italian and Spanish ham, namely available in restaurants are popular in China. French pork companies also intend to conquer a share of the Chinese pork market: France and China signed an agreement this year so that France provides China with pork.

Enhancing local pork supply genetic quality

China is determined to get a large slice of the Chinese pork market-share and intends to increase its production. Over the last decades, it has shifted to a large scale production. The number of farms producing porks declined and the number of meat produced by the remaining farms significantly increased about ten fold.  However, to satisfy the requirements of Chinese consumers, China is willing to use a strategy based on long term quality rather than short term increase of quantities. It consequently plans to enhance the genetic quality of Chinese pork.
In 2013, China and the UK agreed on a 73 million dollar export deal so that the British pig breeding companies provide China with British pig semen. According to a Chinese government source, this will help China “increase the efficiency of its production while minimising the environmental impact of increased production”.

Government influencing the pork market-share

The pork prices play an important role in the Chinese economy and Beijing has sometimes to regulate it, either to prevent it from soaring and harming consumer consumers purchase power or declining and harming producers in rural areas. China maintains a reserve of frozen pork corresponding to less than 1% of the Chinese annual pork consumption. This reserve is a powerful weapon when Beijing wants to increase or decrease pork prices. This year, in May, the second round of purchase from this reserve, was the occasion to make prices increase and protect farmers by making hog prices reach six times the price of grain.

Tuesday, December 9, 2014

Focus group on timber Industry in China

Focus group on timber Industry in China

Background-PEST analysis

With the development of economic, acceleration of civilization and improvement of infrastructure, the relative timber industry in China is going through its prosperity. Wood is essential for the development of national economy and people’s life. Timber is widely-used in construction industry, furniture industry, paper-making industry and energy industry etc. However, since China joint WTO and carried out the policies of natural forests protection, the timber resource is extremely scarce. At the same time, the price of raw material is incessantly rising, the processing technology is undeveloped while the remarkable steady growth of people’s living standard and resident disposable income is present. The sharp conflict between supply and demand is inevitable. Obviously, timber industry is facing both development obstacles and new opportunities in recent years.

Current Situation of Timber Market in China

Timber industry is a general name, which refers to take the wood for the main processing objectby using of physical, chemical processing means, and then processing wood into various wooden forest products manufacturing. Wood is green and renewable, environment-friendly materials, wood industry based on wood material have become the development of social economy in the national economy, which occupies the irreplaceable position in evergreen industry. Since with the development of reforming and opening up, Chinese timber industry has achieved rapid development, China has become the world literally timber industry superpower. On the account of low forest coverage rate and the protection of forest district, businesses are gradually banned logging in virgin forests to maintain harmonious ecological environment, especially the Xing'an Mountains region. The timber field is significantly reduced and hard to satisfy the demand of the market. Under the circumstances, China strengthens the efforts to import timber. Data shows that the total import volume reached 45.159 million cubic meters with the amount of $9.32 billion. As the increasing volume of timber import and the fluctuation of the demand forms, timber industry is gradually changing as well. China imports timber 11.5 million cubic meters from New Zealand, about 25.47% of the total. New Zealand becomes the biggest timber import state in China.

Influencing Factors on Demand and Supply of Timber Market in China

Objective Factor
Over recent decades, China’s per capita disposable income goes up with year-on-year growth of about 9 percent. It means the people’s life mode transfer from subsistence mode to enjoyable mode. People are pursuing the high quality living standard which will immensely promote the timber demand.
Subjective Factor
Besides the objective factor, customer preference is also a significant aspect. People can choose their wanted product as their wishes. Consumer demand for the goods is positively correlated with the degree of preference. Chinese would like to purchase the timber if their degree of preference is high.

Timber Industry SWOT Analysis

focus group China timber industry

In order to give more detailed information about china timber industry, there is a SWOT analysis according to the strengths, weaknesses, opportunities and treats.
In China, endogenous financing ability of wood industry in light industry is weak. In 2008, the cost profit margin of the rankings in 14 light industries of China, wood processing industry ranks the fifth, while papermaking and paper products industry rank the seventh, furniture manufacturing ranks eleventh. Among them, except wood processing cost slightly is higher than the national industrial average profit margins, the costs of profit margins furniture of manufacturing, papermaking and paper manufacturing are below the average of national industry.
Due to the imperfect of capital market, debt financing China timber industry is one of the main channels to raise funds. But China timber industry liability structure is unreasonable, which cause industry facing larger financing risk, therefore, optimizing liability structure is the important problems must be solved for industry. Enterprise should reduce the proportion of current liabilities into a reasonable range, in order to reduce the financing risk. In determining the proportion of current liabilities, enterprises should take cash flow as the criterion. Enterprise's short-term debt should pay eventually by producing in the enterprise management, based on cash flow of current liabilities, it is reasonable to ensure the level of current liabilities. In determining the enterprise debt structure, enterprise should repay the debt within one year less than or equal to the period of the business cash flow, So, even in the difficulty time of financing enterprise, it also can ensure the cash flow generated with business to return due debts, that is to say to ensure adequate solvency.
China's imports of logs, lumber, woodchips and pulp hit record levels in 2011, when its timber supply deficit surged more than 30% to an estimated 152 million m3. Similarly, demand for timber in other wood deficit countriesis also on the rise. While some countries clamber for wood resources, concerns about deforestation have caused an increasing share of the world's native forests to be set aside for conservation.

These global trends are increasing the market's dependence on man-made forest plantations. Not surprisingly, an increasing number of players in the timber industry are interested in developing tree farms - often in new regions and with relatively unproven species. This type of investment requires analysis that incorporates political and economic factors, as well as, direct costs and biological growth rates.

Conclusions of the focus group

This report focuses on the background-pest analysis, current situation of timber market in china, influencing factors on demand and supply of timber market in china, timber industry SWOT analysis. It aims at providing a better understanding about China timber industry. 

By Daxue Consulting
See also:

Tuesday, December 2, 2014

What is focus group market analysis?

What is focus group market analysis?

In order to provide you with clear and actionable recommendation questionnaire
Market analysis in China is conducted for the purpose of understanding the opportunities and risks presented by an existing market in different regions. Each analysis involves a comprehensive set of research methods, both quantitative and qualitative. Marketanalysishelpsyourcompany to identify:
  • Size of the market
  • Rules and regulations imposed in the regional market
  • Trade rules and regulations
  • Socio-economic development surrounding the market
  • Production areas and points of sale
  • Market segmentation
  • Existing key players and potential competitors in the market
  • Performance of existing players or the requesting clients themselves
  • Cost and profitability
  • Global market trends
  • Viable marketstrategies

For example, if an owner seeks to open a wine shop in Hong Kong, he/she has to make use of market analyses to grasp the necessary information on his/her competitors within the region, their locations, sizes, targeted clients, wine-drinking culture of the region, income level of the people as well as the advertising, need for promotion, etc. All thesecannotbedonewithoutmarketanalysis.
Depending on the purpose and the objectives of the market analysis, the scope of the study varies significantly and directly determines the research methods that are adopted.

Methodologies of a market analysis

Included below are some of the most common research methods.
  • Secondary research: collection of information through libraries, bookshops, the internet, university's resources
  • Primary research: any analysis requests a primary research which can be done through interviews, visits or data-mining
  • Survey: a survey aims at asking questions to a screened sample of people through closed and open questions

Delivery of a market analysis by Daxue Consulting

There are multiple ways of delivering for a market analysis including:

  • Analysis of the existing market with the existing rules and regulations
  • Analysis of the main volumes, main figures, main directions of the market without going too deep in the numbers
  • Analysis of the competitors and screening of them through their results, marketing (qualitative and quantitative screening)
  • Executivesummary or summarysheets
  • Analysis of the duplicable market strategies
  • Benchmark of companies' metrics and go-to-market strategies

Thursday, October 2, 2014

Focus group shows bad relationship between China and Japan

Focus group shows bad relationship between China and Japan

Focus group hold in China and Japan

focus group China
We knew the diplomatic relations between China and Japan are execrable. A focus group hold in Japan reveals the scale of the disenchantment between their respective citizens, a deterioration mainly connected to territorial disputes between both Asian powers.
More than half Chinese glimpse even the possibility of a military conflict in the future, against 29 % Japanese side, according to this focus group led by the Japanese independent think tank Genron NPO and the newspaper of State China Daily.
For the last year, the perception of the Japanese towards the Middle Kingdom degraded. From now on 93 % of them have a "unfavorable" impression of it, against 90,1 % previously, what already represented a record since the implementation of the focus group in 2005.
In cause, «the hegemonic attitude " of China, which the actions are judged «incompatible with the international law ". It claimed will to monopolize the natural and energy resources is also pointed.
The Chinese are on their side 86,8 % not to be thought of the good of Japan, that is a slight improvement with regard to the 92,8 % recorded in 2013.

Many reasons for this bad feeling

The heart of the problem is the nationalization by Japan two years ago exactly of three of the islands of the small uninhabited archipelago Senkaku, at the origin of a deep diplomatic quarrel between both countries. These territories situated at sea by oriental China are administered by Tokyo but claimed by Beijing under the naming Diaoyu.
Other reason called by the questioned member of the focus group in China: the historic vision of Japan which has difficulty in recognizing the exactions of its soldiers during the war.
But in the end, this dark image bases on no concrete experience, because the direct interaction between both peoples is very low. Few questioned by Japanese focus group visited China (14,3 %), and very few Chinese focus group respondent did so in Japan (6,4 %). As a result, their feeling bases itself widely on the information brought back by the media of their own country.
Most of the people sounded in both countries (between 70 and 80 %) consider however that this situation is not bearable and that it is necessary to bring to her a solution quickly.
In the same direction, China Daily qualified this poll of "worrying", calling the Sino-Japanese managers to meet as quickly as possible. It said it before adding: «the ball is in the camp of Japan ".
Since their coming to power at the end of 2012, the Japanese right Prime Minister Shinzo Abe and the Chinese president Xi Jinping have never held bilateral summit, in spite of the numerous calls of Mr. Abe. He «has to prove by concrete acts that he wishes sincerely an improvement of the relations ", insists the everyday life.
The focus group was realized in July and August from the answers of 1.000 Japanese and 1.539 Chinese of 18 or more years old.

focus group China

More information here and here

Thursday, August 14, 2014

How to register an high-tech company in China

How to register an high-tech company in China

The American Office of the statistics (Census) created a category "advanced technologies" which corresponds to products answering the following criteria: the used technology has to stand out from a high-technology recognized sector (for example the biotechnologies, the information technologies) and must be state-of-the-art.

Register as high-tech Company in China

In China, according to SJ Grand, a company cannot register as "high-tech" and to be certified as such as if it enters the categories mentioned above and if she answers the following conditions: at least 30 % of his staff has a level of studies upper or equal to the first university cycle; more than 5 % of the income of its sales is dedicated to the search and to the development (R*D); and more than 60 % of its sales concerns technological services and high-tech products.

register high-tech in China

Chinese statistics on the business of high technologies

Until 1998, the Chinese statistics on the business of high technologies included the computing and the telecommunications, the life sciences, the aerospace industry and the aeronautics, the electronics, the armament, the industrial automation, the nuclear technologies, the biotechnologies, and the state-of-the-art materials. Since then, the armament and the nuclear technologies do not appear there anymore, but appeared a new category - " other technologies " - which is most probably the combination of the armament and the nuclear technologies.
Not high-tech category could be subdivided into various levels, according to the technological intensity, and to the profit and to the added value which result from it, according to Daxue Consulting leader, Matthieu David. Let us take the example of computers: the first level is the central processing unit and the operating system, dominated by the model Wintel (microprocessors of Intel, operating system and main applications of Microsoft). The second level, which includes elements-keys as integrated circuits, memory chips and screens, presents a higher level of risk but also profit.
Daxue Consulting
Daxue Consulting is a firm which support foreign high-tech investor in China

The lowest third and level is the one of the assembly and the manufacturing of finished products; the technological level is lower whereas the logistic costs are higher, the advantages consist of economies of scale, sales and located services. Apparently, China is essentially limited at this lowest level.
Mysimax is a China-based company looking to provide high-tech in emerging country. Its founder, JX Paulin, who is also an expert on China high-tech landscape, told us the complexity to register a high-tech company in China.

See also: here and here and here

Thursday, July 10, 2014

Focus group shows increase of advertising in China

Focus group shows increase of advertising in China

The advertising in China amounts to the 3rd world rank, since 2007. The advertising market is very dynamic: in 10 years, advertising spending increased fourfold showed focus group in China.

Advertising in China

advertising in China

The market is nevertheless unbalanced: approximately 50 % of the investments are always realized in Beijing, Shanghai and in the province of the Guangdong.
The advertising market in China is dominated by small local agencies. Focus groups count more than 140 000 companies of advertising and communication, offering very heterogeneous services.
Attracted by the potential of this gigantic market, the big international advertising agencies are present in China for more than 10 years. Their number moreover doubled in 2006, further to the opening in 2005 of this market to companies of capital 100 % foreigners. These international agencies are in competition with the more successful, local Chinese companies, which benefit from strong local networks.
However, 5 of the first 10 advertising agencies are foreign and some are specialized in focus group in China.

Focus group and Store Check in China

store check in China

Since November, 2008, the foreign advertising agencies have to have a governmental authorization to exercise focus group and store check in China. These new regulations of the Chinese government, concerning the companies of advertising with only foreign investments, came into effect in November, 2008. It is same for store check in China.
Advertising agencies with foreign capital will have to, from now on; obtain an official authorization, before making a commitment in any conception, production, and publication in the sector of the advertising in China, as well as focus group.
A Sino-foreign joint-venture can be created only on condition that the shareholders are companies of the sector and in service since more of 2ans.
To create a company of advertising with capital foreign 100 %, the investor will have to be a company the advertising of which is the main "business purpose" and in service since more of 3ans.
A company of advertising, in foreign capital, cannot ask to establish a subsidiary in China only if its capital is completely freed and that sound THAT annual is equal or upper to 20 million RMB (2 million Euros).