P&G and Bawang Adopt Different Approaches to Explore Rural Market

A change has occurred recently in the statistics of spending on daily chemicals in coastal and inland areas: the retail volume of cosmetics in 2008 in Guangdong decreased by 5.5%, while up 24.2% in the first quarter of 2009 in Hubei, 34.8% in January and February in Anhui, and 19.6% in the first quarter of 2009 in Sichuan. In the rural market that has a population of 800 million, a mere increase of RMB10 in spending by each person will have an amazing impact on the consumption of cosmetics in China.

Many daily chemical enterprises have perceived the great potential of the rural market in China for daily chemical consumption. Among these, domestic brands such as Diao brand, Qiqiang and Libai are early players in the rural market. These domestic ones, with delicate marketing approaches, have established good consumer relations and credibility in the washing products market in the rural areas of China. Bawang develops the rural market by celebrity endorsement and large numbers of advertisements; P&G is committed to developing daily chemical products adapted to the characteristics of rural areas. According to the official data of P&G, 30% of the company’s R&D personnel in the Greater China are specific to the rural markets; 30% of its R&D budget toward low-end markets, a 50% increase from five years ago.