The primary reason, it is often argued, that China is an important market for many large U.S. companies is that its population has doubled since the early 1960s. But the whole picture is actually more complex than that. China’s real appeal to American corporations is that the huge population growth has been coupled with a sharp expansion of the middle class. As a result, the Chinese market probably will become more important to consumer goods and technology companies in the next few decades than the U.S. is today.

1. KFC
> Market share: 40% (Yum! Brands)

KFC has become a sensation in China. Since the first restaurant opened in Beijing in 1987, the chain has grown to more than 3,200 locations in 650 cities, according to Bloomberg. McDonald’s (NYSE: MCD), the second most prominent fast food chain, operates 1,100 locations. McDonald’s commands only 16% of market share, while Yum! Brands (NYSE: YUM), which owns KFC, has 40%. KFC is so hugely popular that the company’s target is to increase its number of restaurants in China to 20,000. China accounted for 29% of Yum! Brands’ measured-media ad spending and 36% of its worldwide revenue in 2010, according to Ad Age. While McDonald’s restaurants in China have an almost identical menu to those in the U.S., KFC offers local patrons a number of more familiar dishes, such as Chinese-style porridge for breakfast.

2. General Motors
> Market share: 12.8%
> Competition: BYD, Toyota

General Motors passed Toyota Motor (NYSE: TM) in the first half of 2011 to become the largest automaker in the world. It is also the top-selling brand in China. GM’s presence in the country is still expanding. In the first half of 2010, the company sold more vehicles in China than in the U.S. for the first time ever. At that time, China accounted for a quarter of the company’s global sales, according to the New York Times. Since 2000, the company’s market share in China has grown from 3.4% to 12.8%. Last year GM sold more than 104,000 LaCrosses, one of its most popular models in China. GM operates in China through joint ventures with a number of Chinese companies, such as SAIC Motor.

3. Microsoft
> Market share: 99.3%

Microsoft dominates the PC operating systems market in China. According to web analytics company Baidu Tongji, the company has about 99.31% of market share. Apple’s Mac OS and Linux have virtually no representation. Due to rampant piracy, however, Microsoft only makes a fraction of the revenue it would make if everyone in China bought software directly from the company. Nearly 80% of PC software is pirated in China. According to Microsoft CEO Steve Ballmer, the company’s revenue in China will only be about 5% of what it is in the U.S., despite almost equal sales of personal computers in the two countries, the Wall Street Journal reports.

4. Boeing
> Market share: 52%
> Competition: Airbus, Embraer, Bombardier

Boeing currently has more than 50% share of the Chinese market for commercial aircraft, according to Forbes. The company’s presence in China most likely will increase in the coming years. Air passenger trips in China have increased 16% from 2010. Boeing expects the aviation market in China to more than triple over the next 20 years, requiring an increase of about 5,000 planes valued at $600 billion. Boeing and China have a two-way relationship. According to Boeing-China President David Wang, speaking to CNC World, “China is already Boeing’s biggest customer outside of the United States and Boeing is the largest purchaser of made-in-China aviation parts and components.”

5. Nike
> Market share: N/A
> Competition: Li Ning, Adidas

Nike is China’s leading manufacturer of sportswear. It is followed in market share by Chinese company Li Ning, which holds one-third of the market, and Adidas, although some research puts Adidas in second place. In June Nike reported annual revenue of $2 billion in Greater China, according to Reuters — double the amount made by the company in 2007. Although Chinese companies currently hold a significant market share, they are locked in heated competition to keep up with the expansion of foreign rivals. Concerning sportswear in China, HSBC noted in a report that, “Local brands will lose more market share to imported brands over the next 12 months as the former struggle with inventory issues, while the latter benefit from consumers trading up.”

6. Coca-Cola/Sprite
> Market share: 61.5%/26.9%

Sprite is the number one soft drink in China, with 26.9% market share, according to recent data from Nielsen. Sprite’s manufacturer, Coca-Cola (NYSE: KO), holds a total 61.5% share of the soda market. It is followed by PepsiCo (NYSE: PEP), which has 29%, according to London-based researcher Euromonitor International. Coca-Cola currently has more than 40 factories in China, and it plans to invest $4 billion in bottling plants and delivery trucks over the next three years, according to Bloomberg.

7. Procter & Gamble
> Market share: 55% (all P&G hair care)

Consumer goods company Procter & Gamble (NYSE: PG) has a firm grasp on 55% of China’s market for hair care products, including shampoos and conditioners, according to China Daily. Its best-selling product is Head & Shoulders. “Last year,” the paper reports, “P&G announced it would invest at least $1 billion in China over the next five years and also launched an innovation center in Beijing with an investment of $80 million.” There is huge potential for growth in China. As of 2009, per capita spending on hair care products in China was only $1.79 a year, according to Datamonitor Industry Market Research. Research firm RNCOS says the hair care market is expected to grow at a compound annual growth rate of 15.5% by 2013. P&G may not realize its maximum potential profits for some time, however. Another China Daily article states that the “Chinese government has asked P&G and Unilever to delay their raising prices in China, because Beijing is determined to keep soaring consumer prices under control.”

8. Intel
> Market share: 14.9%
> Competition: Samsung, Hynix

Intel (NASDAQ: INTC) is the world’s largest semiconductor chip maker by revenue. China accounts for more than one-third of the world semiconductor market. It therefore makes sense that Intel is the leading semiconductor supplier for China. According to PwC, Intel had 14.9% market share as of 2010. In that year alone, Intel made nearly $20 billion in revenue in China. This was an increase of more than 26% from 2009, when the company was also the market leader. For the second quarter of 2011, PC shipments in China grew to 18.5 million, according to IDC, surpassing the U.S. for the first time.

9. Starbucks
> Market share: 70%

Starbucks (NASDAQ: SBUX) is the world’s largest coffee chain by sales. In China, the company has a nearly 70% market share, according to Euromonitor. Things are poised to get even better for the coffee company. “Coffee sales climbed 9% [in China] last year to 4.6 billion Yuan ($694 million),” the Wall Street Journal reports. Starbucks currently has 450 stores in mainland China and has plans to open a thousand more. In 2010, the company finalized an agreement with the Chinese province of Yunnan to establish its “first-ever coffee-bean farm in the world to cater to a rapidly growing population of coffee drinkers in China,” according to the Wall Street Journal.

10. Apple
> Market share: 51%

While Apple effectively has zero presence in China’s operating system market, its smartphone market share is not bad — fourth in the country, according to Reuters. But the company really shines in China’s tablet market. According to consulting firm iResearch, Apple’s iPad has a market share of 51%. Lenovo and Samsung are in second and third place, with 13.8% and 9.8%, respectively. A whopping 80% of consumers who are considering buying a tablet say their first choice is an iPad, reported TabTimes. According to Apple, the company’s China sales for the quarter ended June 2011 increased six times from the same period the year before.

Douglas A. McIntyre, Charles B. Stockdale

Read more: The Most Popular American Companies in China – 24/7 Wall St. http://247wallst.com/2012/01/03/the-most-popular-american-companies-in-china/#ixzz1iR2TZY7o

January 5, 2012
Categories: News you can Use, Technologies, Vendor News . Tags: China, studio systems group . Author: MyMotorways . Comments: Leave a comment