Procter & Gamble and the China Market

Essay by KortEvanUniversity, Bachelor'sA+, August 2004

download word file, 6 pages 5.0

The Chinese market today is one of the hottest emerging markets in the world. After many years of isolation, China has finally decided to open up to the world and let foreign investors in. Inspired by the new opportunities in China and the tremendous growth of China's economy during the last few years, investors from U.S. and other countries are rushing to take positions in the Chinese markets.

China has become a mass market, and Procter & Gamble is winning the race to dominate it. Originally created as a partnership that manufactured soap and candles, Procter and Gamble has greatly expanded its operations, now employing some 99,000 people in over 60 countries. Procter and Gamble markets a broad range of laundry, cleaning, paper, beauty care, food and beverage and health care products in more than 140 countries.

The Cincinnati Company is prospering amid a swarm of government-owned competitor's, buying out many and stamping out others.

Its nationwide distribution system may be the best in the country. Until recently, makers of cosmetics, beverages, shampoos, soap and other daily goods considered China a frontier outpost, a place to test the waters with small joint ventures and limited distribution. Now, P&G, invest lavishly and deem anything less than nationwide sales a failure.

What China has to offer and why Procter & Gamble entered this market are, it's the largest consumer market in the world; has a stunning economic growth; privatization; and availability of cheap resources and market restructuring.

Today China has the largest population in the world. Its population is approximately 1.2 billion and continues to grow at a constant rate of 1.5 percent a year. In addition, Chinese population is literally starving for Western goods and services. During the years of isolation, Chinese markets were flooded with low-quality, short-lasting Chinese goods. Western...