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Tencent launch partnership with Chinese coffee start-up Luckin

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(China Plus) Tencent, one of the largest internet and technology companies in the world, has launched a partnership with a coffee startup to bring everybody their favourite drink even quicker.

As of September 3, Luckin, a coffee and bakery-chain, has sold 26 million cups of coffee across its 1,003 stores across China.

"We hope the cooperation with Luckin coffee will create a new lifestyle of 'smart retail' through tie-up on user traffic, technology exploration, application scenarios and management abilities," said Lei Maofeng, deputy general manager of Tencent's payment platform WeChat Pay.

The move is said to be in response to Alibaba's partnership with Starbucks in August to deliver coffee straight to the doors of coffee-lovers. It is expected that the partnership, which will begin in Shanghai and Beijing, will cover 2,000 Starbucks outlets by the end of the year.

Daniel Zhang, Chief Executive Officer of the Alibaba Group, said: "Alibaba is thrilled to expand our existing partnership with Starbucks by leveraging our cutting-edge New Retail infrastructure and digital power to enable an unprecedented experience for consumers."

It's unsurprising that the two groups announced partnerships with coffee chains as we enter into the new academic year.

Coffee is a passion that is echoed across the globe and students in the UK are particularly addicted.

Coffee specialists, Bibium, have put together six reasons why they think students can't stop drinking coffee.

1. With 9 am lectures and non-stop deadlines, it keeps students just awake enough to make it through the day.

2. Forget having a gossip over a water-cooler, the coffee machine is the best place to socialise.

3. Students love to procrastinate, so taking time to make and drink a cup of coffee keeps them from writing their essays.

4. There's nothing worse than being stuck in a library with freezing cold air-con, coffee quickly warms them up.

5. Coffee keeps them productive, it's a little morning routine that gives a quick boost of caffeine.

6. It's a hangover cure-all - studies suggest coffee protects you from liver diseases caused by alcohol.

"Coffee has become a popular drink for young people nowadays and there are more coffee industry practitioners," said Maofeng.

Source: China Plus

Fonterra sets up green farming program

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(China Daily) Fonterra Co-operative Group Ltd, a global dairy exporter and manufacturer from New Zealand, has developed a green program to strengthen sustainable farming in the Chinese animal husbandry industry.

The company launched the strategic cooperation between the two countries on Aug 29 at the Sino-New Zealand Animal Husbandry Green Development Forum held in Beijing.

"We plan on carrying out a number of activities to promote exchanges between government and industry experts and companies in China and New Zealand, and contribute to the revitalization of China's dairy industry," said Hans Berghorst, vice-president of China farms and manufacturing at Fonterra.

"The Eco-Win program is an important step for us to implement and practice sustainable dairy farming in China."

The program will introduce the comprehensive utilization of effluent, practice a circular economy model with farming and cropping, and build a sustainable ecosystem.

The company said it plans to promote extensive and in-depth exchanges and cooperation among all parties, explore sustainable development models for large-scale dairy farming, and drive structural reform, transformation and development of the agricultural supply side.

"It is a key priority for Fonterra to contribute to the development of the Chinese dairy industry, and we believe there is a lot to be gained by both New Zealand and China through the sharing of knowledge, research and dairy expertise," Berghorst said.

The purpose of the forum was to discuss the utilization of livestock and poultry manure, and how to find sustainable solutions for the utilization of farming byproducts.

It was jointly organized by Fonterra and the Ministry of Agriculture and Rural Affairs' National Animal Husbandry Station, China Feed Industry Association and National Livestock and Poultry Breeding Waste Resource Utilization Technology Innovation Alliance of China.

Berghorst said Fonterra is committed to integrating into the Chinese dairy industry, and providing safe and quality dairy products for Chinese customers and consumers.

Fonterra cares about the communities they work in and alongside, he said.

"We attach tremendous importance to establishing strong links with local businesses and communities, and doing our best to support local communities," said the vice-president.

"We want to help create a better future for the families, communities and industries we work with.

We applaud the great efforts by the Chinese government to promote the use of livestock and poultry manure as resources," he said. Fourteen years ago, Fonterra and the National Dairy Industry Technology System of the Ministry of Agriculture and Rural Affairs jointly established the Sino-New Zealand Dairy Exchange Center, to support the sustainable development of the dairy industry in both countries.

The New-Zealand company has implemented experimental programs in Ying County of Shanxi province and Yutian County in Hebei province.

The company expects to utilize 100 percent of livestock and poultry manure by 2020 in all of its farms in China.

Source: By Wang Zhuoqiong | China Daily

China's Top Hotpot Chain Attracts Hillhouse to $963 Million IPO

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(Bloomberg) Haidilao International Holding Ltd., China’s biggest hotpot restaurant chain, is seeking to raise as much as $963 million in a Hong Kong initial public offering.

The Beijing-based firm is offering 424.5 million shares at HK$14.80 to HK$17.80 apiece, according to terms for the deal obtained by Bloomberg on Monday. Cornerstone investors including Chinese investment firm Hillhouse Capital and Morgan Stanley have agreed to buy a combined $375 million of stock in the offering, the terms show.

Haidilao’s IPO price range values the company at 25.1 times to 30.2 times its estimated 2019 earnings, people with knowledge of the matter said. The figures assume a so-called over-allotment option isn’t exercised, according to the people, who asked not to be identified because the information is private.

A Hong Kong-based external representative for Haidilao declined to comment.

Any deal would add to the $24.5 billion of first-time share sales in Hong Kong this year, more than double the $9.2 billion of deals during the same period in 2017, data compiled by Bloomberg show.

Meituan Dianping, the Chinese restaurant review and delivery giant, started taking orders last week for a Hong Kong IPO that could raise as much as $4.4 billion.

Haidilao’s restaurants are known for serving spicy broths and providing attentive customer service, which includes giving free manicures, shoulder massages and dance performances. Hillhouse and Greenwoods Asset Management have each agreed to buy about $90 million of shares in the offering as cornerstone investors, according to Monday’s terms.

Morgan Stanley and Snow Lake Capital committed about $80 million each, while Ward Ferry will invest about $35 million. Haidilao plans to take investor orders through Sept. 17, the terms show. It plans to price the offering Sept. 18 Hong Kong time and begin trading Sept. 26.

CMB International Capital Ltd. and Goldman Sachs Group Inc. are joint sponsors of the listing.

Source: Bloomberg By Crystal Tse

Haidilao prepares for HK IPO

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(China Daily) Haidilao International Holding, Chinese mainland's biggest hotpot restaurant chain, will kick-start its IPO on Wednesday, planning to raise as much as $1 billion from share sales.

The Beijing-based company's forthcoming listing in the Hong Kong stock market follows that of Meituan-Dianping, a mainland online food delivery and booking giant, which began its listing last week for its potential $4.4 billion IPO in the city.

Pricing its range at HK$14.8 to HK$17.8($1.88-$2.26) apiece, Haidilao is offering 424.5 million shares in total, 91 percent of which will be allocated to institutional investors, and the remainder allotted to the public. At the indicative range, the company has an implied valuation of between $10 billion and $12 billion with a price-earnings ratio of 30.2 times.

With as many as 1,000 shares included per lot, the company's IPO subscription price per board lot would be HK$17,979, the most expensive in Hong Kong's listing history.

The Sichuan-style spicy hotpot restaurant chain's listing is the latest in a string of technology IPOs in the city against the backdrop of a heated trade dispute between China and the United States, ongoing turmoil in emerging markets as well as lingering worries of further US interest rate hikes, which have cooled market sentiment for technology IPOs in the city.

The hotpot restaurant chain, with 362 outlets in the country, notched up a net profit of 647 million yuan ($94 million) in the first six months of this year, climbing 17 percent compared with the corresponding period last year. Its revenue in the same period registered a 54.4 percent surge to 7.3 billion yuan from last year, a substantial amount of which was generated from its restaurant operations, according to the IPO prospectus.

Funds raised from the IPO would be utilized to finance part of the company's expansion plan, develop new technologies and repay its loans, the company said in its filing.

Five cornerstone investors plan to make a combined $375 million purchase of stock offering with a lockup period of six months. Hillhouse and Greenwoods Asset Management have each agreed to buy shares worth about $90 million, while Morgan Stanley and Snow Lake Capital committed to buy about $80 million each. Ward Ferry will purchase about $35 million.

The retail section of the IPO will be available on Sept 12-17. The restaurant chain is expected to list on Sept 26. CMB International and Goldman Sachs are joint sponsors of the listing.

Source: By Dai Kaiyi in Hong Kong | China Daily

Java House targets mainland market to pep up growth

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(China Daily) Java House, East Africa's largest coffee shop chain, is planning to sell its premium coffee in China, a market with a rapidly growing number of coffee drinkers.

The Nairobi, Kenya-based chain has signed a distribution agreement with Greechain International Ltd, a Shanghai-based logistics company.

Starting later this year, Java House will export a total of 10 to 15 metric tons of products to China every month, including coffee beans, coffee powder and tea leaves.

By the end of the year, a Java House and Greechain joint venture is expected to be launched in the free trade zone area of Shanghai, and the two companies will open the first coffee shop selling African coffee in the city.

"High-quality Kenyan coffee has premium fruit acids and strong flavors. We will sell the best African coffee in China, and we plan to later open more such coffee houses in Beijing, Guangzhou and Shenzhen," said Du Gongming, general manager of Greechain.

"We will sell African coffee that is affordable to most Chinese consumers, and run a cost-efficient model. Our prices will be cheaper than Starbucks and Costa Coffee," Du said.

Greechain's network spans multiple industrial cities and ports in China and Africa.

"We have been doing business in Africa for more than a decade. Africa has some premium quality products, but they don't have channels to sell them to overseas markets. A lot of African products will appear in China for the first time," Du said.

Founded in 1999, Java House now operates 57 chain coffee shops in Kenya, Uganda and Rwanda.

With mountainous terrain and plateaus with cool climates, many regions in Africa are ideal for growing coffee. But, the quality of local coffee has long been affected by pests, diseases and climate change, and the recent decline in global coffee prices has significantly weakened the competitiveness of the coffee industry in Africa.

Now, Java House is eyeing the Chinese market to help fuel its growth.

"The improvement of China's national income level is expected to promote the per capita consumption of coffee. Coffee consumption in China still remains low, and there is a significant growth potential," said Neil Wang, president of consulting company Frost & Sullivan in China.

Source: By Zhu Wenqian | China Daily 

New Zealand dairy giant posts loss after China stake sours

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(AP) — New Zealand’s largest company, which sells dairy products, says it will completely review its business after a disastrous financial year saw it post its first-ever loss.

Fonterra lost hundreds of millions of dollars on its investments in China and also had to pay a large arbitration settlement following a 2013 botulism scare. The company has a new leadership team, which is promising to turn things around after both the chief executive and the board chairman recently quit.

Chief Executive Miles Hurrell says Fonterra failed to meet the promises it had made to more than 10,000 farmers who own the company under a cooperative structure.

Fonterra announced an after-tax loss of 196 million New Zealand dollars ($129 million) for the year ending July, compared to a previous-year profit of NZ$745 million.

Source: Associated Press

Italian wine exporters see potential in changing tastes

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(China Daily) Italian wine exporters see potential in China as tastes and demand diversify, and they expect to target 230 million consumers to further expand growing sales, according to industry experts.

Although French exports dominate the Chinese market, wine from other Old World countries such as Italy is catching up.

"For Italian wines, China is a country with great potential. After decades of effort, Italian wine exports to China have began to pick up momentum," said Amedeo Scarpa, manager and trade commissioner of the Italian Trade commission, part of the Italian Trade Agency.

"According to China Customs' data, in the first quarter of 2018, Italian wine exports volume grew by more than 63 percent year-on-year, and its market share rose from 4 percent two years ago to 7 percent," he said.

At present, France is still the largest wine exporter, while Australia and Chile rank second and third because of the bilateral free trade treaty and the policy of zero tariffs on wine, Scarpa said.

"In 2021, China will become the world's second-largest wine importer with a turnover of $21.7 billion," he added.

The Italian Trade Agency is now working closely with COFCO W&W International Co Ltd, a liqueur importer under the State-owned food company China National Cereals, Oils and Foodstuffs Corp.

Bao Hanying, deputy general manager of the sourcing and sales department of W&W, said COFCO is planning to become the biggest dealer of Italian wine in China, targeting 250 million emerging middle-income consumers as the products can be found in 150 of its 400 retail shops.

Bao also believes that growing demand for quality and changing tastes in China will bring benefits for Italian products to expand sales.

"Although Italian wines are currently relatively small, globally, Italy is the biggest wine exporter out of a number of countries," said Li Shihui, general manager of W&W. "This means that they also have high market potential in China. During the consumption upgrading in China, the demand for high-end and diversified wine is increasing.

Wine Intelligence Research Director Chuan Zhou said: "One might think the most successful imported wine brands in China are predominantly from Bordeaux. That might have been true five years ago when imported wine was primarily associated with gifting and business occasions.

"But as the market is shifting toward personal consumption, more imported brands from Australia, Chile and other major producing countries are building their presence in China and connecting with audiences."

Source: By Ren Xiaojin | China Daily

Yili connects more European partners to innovate

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(Xinhua) Top Chinese dairy company Yili Group announced on Thursday that its innovation center based in Wageningen University will connect more European partners to boost innovation for better food.

With its Europe R&D Center on Wageningen campus rebranded as Europe Innovation Center, Yili wants to work with a wider range of research institutes and industrial partners, said Zhang Jianqiu, executive president of the Chinese largest dairy group.

"We started out with linking only to the university. Nowadays we work with all kinds of institutes, dairy companies, suppliers, etc.," explained Gerrit Smit, managing director of Yili Innovation Center Europe. "Because we want to create a win-win situation. If a new product is successful, everybody wins."

Set up in February 2014, the center fully owned by Yili Group has been collaborating with European partners on fundamental and applied research and knowledge transfer in the areas of processing technology, new product development, food safety and farm management.

Louise Fresco, president of the Wageningen University & Research Executive Board, hailed Yili's decision to boost its European research facility in the Dutch Food Valley area.

"We feel it is very important to look towards doing things together," she said. "The Belt and Road Initiative and interest in Africa very much match with the way that we can also bring things of goodness to Africa to Asia. We can do part of that work together."

Representatives from some 60 European research institutes, companies of food and dairy sector attended the ceremony.

Source: Xinhua

What is Chinese hotpot and where does it come from? The questions that boiled over into a national controversy

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(SCMP) The decision by a town in southeastern China to declare itself the home of hotpot prompted a backlash from other parts of the country, which all have their own views on the correct way to make the dish.

It is little surprise that they reacted in the way they did. It is, after all, one of the most popular dishes in the nation of 1.4 billion people and comes in a huge variety of recipes ranging from the fiery to the fragrant.

Many of these regional variations have now spread across the world and can be found in restaurants from Nairobi to Buenos Aires.

It is also big business. Hotpots account for 22 per cent of the dishes sold at restaurants across the country, according to a 2017 report from food industry giant Dianping-Meituan.

One of the main hotpot franchises, HaiDiLao, is lining up investors for what looks to be a nearly US$1 billion initial public offering in Hong Kong.

So as the row about the dish’s true origins continues to bubble away, we look at the different varieties found across this sprawling nation.

So what is a hotpot?

It depends on who you ask. The basic formula is the same: a shared simmering, bubbling vat of broth in which the diners cook their meats, vegetables and other ingredients.

But like China’s spoken language or climate, hotpots vary widely across the country – from the spicy, numbing heat of Sichuan to the fragrant chrysanthemum tastes of Jiangsu.

The exact ingredients used vary considerably. Different parts of the country make different broths while the constituent elements often reflect the country’s diverse geography and climate.

Depending on where you are in China, ingredients such as cheese-filled dumplings, tofu puffs and glutinous rice sticks can all feature.

Beijing’s hotpot is all about simplicity

China’s capital is home to the Old Beijing-style hotpot, which inherited its central ingredient – mutton – from the northern nomadic tradition.

In its traditional preparation, the thinly hand-sliced meat is cooked in a volcano-shaped copper pot. 

Meats and vegetables are added to light broth seasoned with fragrant mushroom, ginger, and scallions.

The final ingredients to be cooked in the pot are simple: stomach meat, sliced lamb, tofu, green vegetables and thin rice noodles.

Purists will insist that the ingredients must be added in that precise order.

A variation found in other parts of northern China replaces the sliced lamb with chunks of sheep vertebrae.

Sichuan’s “ma la” hotpot numbs the senses

The southwestern province of Sichuan is home to a spicy variety that has become internationally renowned, in part due to international chains like HaiDiLao and Xiaolongkan.

Though they have subtle differences, both Sichuan’s capital Chengdu and the neighbouring municipality of Chongqing rely on peppercorns to give it a mouth-numbing spicy flavour known as “ma la” in Chinese.

He Qiao, a Chengdu chef, said the city was hot in the summer and cold in the winter.

He believes that Sichuan peppercorns and chilis “can disperse both the humidity and cold inside our bodies, which helps keep the balance between yin and yang”.

Unlike in Beijing, there is a much wider choice of ingredients for diners to chose from – basically, anything goes from congealed blood to cheese balls or live shrimp.

Hotpot culture is strong in this part of the world. Chongqing residents often claim that one in five restaurants there is a hotpot place.

Anhui ‘simple but delicious’

Guangde in the southeastern province of Anhui kicked off the latest controversy by unilaterally declaring itself the hotpot hometown,

However, this variety is less well known compared with Beijing and Sichuan’s versions and features a heavily flavoured broth with local, seasonable vegetables, which is often cooked in the home.

“The simplest pot is pork stewed with radish. It’s simple, but incredibly delicious, especially in winter,” said Mian Lugui, a university student from Guangde.

Yunnan favours the sour and Guangdong likes seafood

The Beijing and Sichuan varieties may dominate China’s big cities, but an array of different recipes can be found throughout the country, reflecting the produce and culture of their home regions.

Yunnan in the southwest often uses ham, Guizhou in the south is known for flavours such as its sour hotpot and its use of ingredients such as cow intestine.

In Jiansgu on the east coast hotpots have a lighter flavour and are cooked with chrysanthemum.

The southern province of Guangdong, home to Cantonese cuisine, is known for its fragrant soup base and its emphasis on seafood.

“Because the climate in Guangdong is relatively hot, people do not eat chilli. So the local hotpot is not spicy and they use spring onion, ginger, peanut oil and soy sauce instead,” said Zhou Chao of Beijing Cooking School.

The history of hotpot

The origins of this communal cuisine are winding and disputed and it is not clear which place can truly claim to be the original home of the hotpot.

Anhui’s claim to be the hometown of hotpot outraged devotees of the Sichuan and Chongqing varieties, who claimed ownership of the dish.

The first archaeological evidence may lend weight to their claims. Pots that date back nearly 2,000 years and may have been used to make an early iteration of the dish have been unearthed in the province.

The first references to the dish appeared in literature soon afterwards in texts that were written during the Three Kingdoms era.

“Its history is at least 1,700 years old,” said Richard Zhang, the director of the Sichuan Cuisine Museum in Chengdu. “In the Three Kingdoms era [220-280], people cooked in copper pots, but it was not popular at that time. By the time of the Northern and Southern Dynasties, people used the hotpot to cook food gradually.

“At first, it was popular in the cold north of China, and people used it to cook all kinds of meat. 

Further developments in cooking technology led to the development of more variations of hotpot.”

But others believe that the dish as we know it today probably has its roots in the 14th century.

Some accounts trace the roots of Beijing hotpot to the days of the Mongol empire around 800 years ago.

A legend from that time tells of a emperor impatiently waiting for his lamb leg to cook as he prepared for battle. His ingenious chef decided to speed up the process by chopping up the meat and boiling it, thereby giving rise to a new dish.

“In the Ming and Qing dynasties [from the late 14th century to early 20th century], some dignitaries liked hotpot very much, and they began to put different seasonings and ingredients into hotpots for the different flavours,” said Zhou from the Beijing Cooking School. “Now, we have a lot of different ways to cook the different dishes.”

The dish really began to take off in the early 19th century and the first appearance of what we would today recognise as Sichuan hotpot dates back to this era.

Its emergence is credited to the Yangtze River fisherman of the 1820s, who used to boil their meats in a communal spicy broth to keep warm and stretch their limited budgets as far as possible.

Some enterprising locals spotted an opportunity and began using giant communal pots to prepare the broth, introducing the dividers that many people use today to keep their ingredients separate from other diners’ meals.

The first restaurant known to have served the dish appeared as late as the 1930s. Fittingly enough it opened in Chongqing, whose own variety of the dish is now flourishing across the globe.

Source: South China Morning Post by Simone McCarthy

Famous Liquor-Maker’s Onetime Chairman Tried for Corruption

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(Caixin) A former chairman of famous liquor-maker Jiannanchun has stood trial on charges of bribing a government official and embezzling a fortune from the company during its reorganization more than a decade ago.

The trial for Qiao Tianming, now 69, took place from Wednesday to Friday in the city of Leshan in the southwestern province of Sichuan, according to an observer at the trial. Qiao, who was removed from his position two years ago, was accused of embezzling 260 million yuan ($38 million) from the company and paying another 380,000 yuan in bribes to a former vice governor of Sichuan, Li Chengyun.

Qiao’s arrest and current trial are part of a much wider campaign against officials from both government and state-owned enterprises under an anti-corruption crackdown that began shortly after President Xi Jinping took office in 2012. Xi has vowed to go after both “tigers” and “flies,” or officials both big and small. In one of the latest cases involving a top executive, the former chairman of bad asset manager China Huarong Asset Management Co. Ltd. was investigated for abnormalities involving an electrolytic manganese producer in Northwest China’s Ningxia Hui autonomous region. In another, the former head of China’s insurance regulator was accused of taking bribes and using his position to help companies he regulated.

Qiao joined the Sichuan-based Jiannanchun in 1982 and served in a wide variety of positions before becoming its chairman in 2003. Most of the crimes he was accused of occurred after 2003, when Jiannanchun launched a process to reform its share structure, a common practice among many state-owned enterprises at the time as they adopted a more Western-style shareholding structure.

Qiao allegedly tried to give Li, then a top official in the city of Deyang, 20 million shares of Jiannanchun as part of the reform process. But Li said he ultimately refused due to his own political aspirations, even though he continued to assist Qiao with the reforms. Qiao would ultimately go on to say that the 380,000 yuan he gave Li was just how people showed gratitude at the time and was never meant as a bribe.

But the majority of Qiao’s criminal behavior came during the reform process, when he allegedly used fake contracts, receipts and other methods to hide income at the company, allowing him to embezzle the 260 million yuan. The Leshan court said it will announce a verdict at a later date.

Source: Caixin By Yang Ge

Tencent-backed Meituan climbs 5 percent on debut, brightens outlook for HK IPOs

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(Reuters) - Meituan Dianping rose 5 percent on debut in Hong Kong on Thursday, valuing the Chinese online food delivery-to-ticketing services firm at about $55 billion and sending a positive signal to companies lining up to list in the financial hub.

The stock’s performance is being seen as a test of investor appetite for Hong Kong listings against a backdrop of weak markets and multi-billion dollar initial public offerings (IPOs) that have struggled to rise above their issue price, such as smartphone maker Xiaomi and China Tower.

The strong debut also reflects investor confidence that loss-making Meituan can fend off bruising competition from food-delivery platform Ele.me, which is backed by China’s biggest e-commerce company Alibaba Group Holding. Both have been offering heavy discounts to win new customers and market share.

Shares of Meituan, which counts China’s biggest gaming and social media firm Tencent Holdings as a key investor, closed at HK$72.65 ($9.26) compared to its IPO price of HK$69 but below the opening level of HK$72.9. 

Founded in 2010 by Wang Xing, Meituan, which has been likened to U.S. discounting platform Groupon Inc, merged in 2015 with its then main rival Dianping, akin to U.S. online review firm Yelp Inc.

Meituan’s market value today dwarfs Groupon’s $2.3 billion and Yelp’s $4.1 billion. Xing owns around 573 million shares in Meituan, making his holdings worth about $5.3 billion, more than either of the U.S.-listed companies.

“This may be the most important decision in our investment journey in more than 10 years,” wrote Neil Shen, founding and managing partner of Sequoia Capital China, which owns about 12 percent of Meituan. “In this scuffle, Wang Xing led the team to fight more and more bravely, and it was a bloody battle in the fierce competition.”

At the listing ceremony on the Hong Kong stock exchange on Thursday, Xing praised the role of the company’s almost 600,000 delivery persons and 50,000 employees in fuelling its growth.

“I also want to thank Steve Jobs, thank Apple, without iPhone, without mobile internet, everything we do today wouldn’t have been possible,” he said. 

Meituan’s wide variety of services has attracted users, but pushed it into the red. The company lost 22.8 billion yuan ($3.33 billion) in the first four months of this year, despite a big jump in revenue. It lost about $2.8 billion in 2017.

The company bought bike-sharing firm Mobike for $2.7 billion this year, an expensive acquisition that is straining its margins.

Alibaba, meanwhile, has been beefing up its offerings, snapping up food delivery service Ele.me and Baidu Waimai, which it plans to roll together with its lifestyle services app Koubei.

BUMPER IPO YEAR

Meituan’s stock rise was also helped by broad gains in Asian shares on Thursday as investors took a less bearish view on the impact of the U.S.-China trade war on markets.

This year is set to be the biggest year for IPOs in Hong Kong since 2015, helped in part by a market rally late last year and rules introduced this year to attract tech companies by allowing them to weight voting rights in favor of their founders.

Hong Kong listings have raised $28.7 billion so far this year, compared to $33.8 billion raised in 2015, according to Thomson Reuters data.

But an 18 percent drop in the benchmark Hang Seng index from its January peak and an intensifying Sino-U.S. trade war have clouded the prospects for other companies looking to go public, as investors become more cautious and selective.

Of the biggest 10 listings in Hong Kong this year, just one, Zhenro Properties, is trading above its issue price.

Meituan is the second company with a dual-class share structure to go public in Hong Kong as well as the second multi-billion dollar tech float in the city this year, following in the footsteps of Xiaomi.

“It sends a relatively positive signal to the upcoming IPOs, but retail investors are unlikely to be particularly keen on this type (dual structure) of IPO for the time being,” Linus Yip, chief strategist at First Shanghai Securities, said of Meituan’s performance.

($1 = 7.8439 Hong Kong dollars)

($1 = 6.8502 Chinese yuan renminbi)

Source: Reuters; Reporting by Julia Fioretti, Sijia Jiang and Donny Kwok; Additional reporting by Kane Wu; Editing by Edwina Gibbs and Muralikumar Anantharaman

The Nissin instant noodles story: Japanese invention that went from garden shed to national treasure to outer space

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(SCMP) When Momofuku Ando died in January 2007, The New York Times devoted a large part of its editorials page to a man who had earned “an eternal place in the pantheon of human progress”.

This was not an inventor who had helped create the bullet train, founded one of Japan’s world-beating car companies or an electronics firm that had grown to become the envy of every developed economy. Ando perfected the humble dish of instant noodles and the company that he founded, Nissin Food Products, had grown to bestride the instant food sector like a colossus.

His creation – 60 years ago this August – remains unmistakable from his native Osaka to Ontario and Cape Town to Cologne, with few products better epitomising Japan’s recovery from the ravages of the second world war.

But like most success stories, Ando’s moment of inspiration had more than a hint of good fortune about it – and that story is best told in the museum dedicated to his invention in Yokohama.

On the day of my visit, it is mayhem. At least three school parties are visiting, and the children are busy trying out the interactive exhibits and racing from one display to the next.

The noise and chaos are arguably even more intense on the third floor, where children have a choice of soups and toppings to create their very own Cup Noodle – and, apparently, 5,460 potential flavour combinations.

Next door, another group is busy kneading and spreading wheat flour that is then dried and flash-fried – Ando’s breakthrough discovery – before the children take their creations home to sample.

It is likely that Ando would have approved, as he famously got the idea for instant noodles after witnessing ordinary people in Osaka queuing up for a bowl of the steaming staple at an outdoor stand.

Born in March 1910 to a Taiwanese family, Ando was raised by his grandparents in the city of Tainan after both his parents died, and demonstrated an entrepreneurial streak from a young age. He opened a textile company in Taipei at the age of 22 and later operated a clothing company in Osaka, also enrolling in the city’s Ritsumeikan University.

In the precarious years immediately after Japan’s defeat in the war, Ando was convicted of tax evasion and served two years in prison. In his autobiography, he claims he had provided scholarships to students at a time when it was considered to be tax evasion. By 1957, he had lost his business and almost everything else except his home.

Ando always credited his breakthrough to walking past a ramshackle noodle stand. Inspired, and short of cash, he immediately built a shed in his garden equipped with a stove and a workbench – an exact replica is in the museum – and set about perfecting the recipe and his idea. Initially, it did not go well, and every attempt to create a product that could be stored for a long time, yet ready in an instant, failed.

That changed one evening as he watched his wife fry “tempura” and he realised that flash-frying the noodles would eliminate the water they contained. By simply adding boiling water, the noodles could be rehydrated and ready to eat.

On August 25, 1958, Nissin released the first packet of pre-cooked instant noodles in a garish red and yellow package, with the product name – Chikin Ramen – interestingly in both English and Japanese.

The price of this new innovation was set at 35 yen, which was daring considering that “udon” noodles would commonly cost just 6 yen. But it paid off.

“They were a huge hit straight away because they were quick and convenient, but also because the late ’50s was the time when televisions were becoming more commonplace in Japanese homes and mass-marketing was evolving, while supermarkets were also appearing,” says Kahara Suzuki, a spokeswoman for the company.

“Nissin was also one of the first companies to sponsor a television programme, so the company was proactive in getting its name out there,” she says.

That policy continues to this day, with Nissin sponsoring tennis players Kei Nishikori and Naomi Osaka, recent winner of the US Open.

Chicken Ramen (Nissin has since fixed the name) is still available in Japan and sells for about 105 yen (94 US cents)– a third of the price of the cheapest bowl of noodles in a restaurant in the country.

Refusing to rest on his laurels, Ando sought out new markets and travelled to the US in 1966 to assess the chance of success for instant noodles in the booming post-war economy.

The American businessmen he spoke to, however, were not sure that eating noodles from a bowl with chopsticks would catch on. That prompted Ando’s second brainwave – selling the dehydrated noodles in a styrofoam cup that was easy for anyone with a fork to use.

The following year, the first Cup Noodle choices appeared on supermarket shelves – and the problem went from being how to crack the US market to how to keep up with demand.

Today, 100 billion portions of instant noodles are eaten around the world every year. By 2016, Cup Noodles had sold a total of more than 40 billion packs since its launch.

Statistics from the World Instant Noodles Association show that nearly 40 billion packs of instant noodles are consumed in China and Hong Kong each year.

“Cup Noodles are far more than just a snack; they’re a meal in their own right and ideal because they are cheap to buy, they’re warm and filling on a cold day, and very quick to prepare,” says Hiroko McCormack, who is married to a Canadian and lives in Toronto – but all too often hankers after a taste of home.

“I have to get them sent to me or buy mine directly from Japan, even if that is more expensive, because the ones we can buy in Canada taste different,” she tells the Post. “Instant noodles are very popular in Canada, although we do have a lot of Korean copies, but I have to say that I prefer the original, authentic taste.”

According to Suzuki, Nissin releases an astonishing 300-plus new products a year in Japan as it tries to keep up with the changing desires – and dietary requirements – of consumers. The vast majority of those are discontinued, leaving the most popular products in place.

“Since 2000, there has been a sharp increase in the number of 24-hour convenience stores in Japan, but each of them has limited space so we need to devise ways to show a broad range of products to customers, who are increasingly fickle,” she says.

“At the same time, there is a lot of very stiff competition in this sector, so we need to be constantly innovating and evolving.”

One of the newer products on the shelves, both in Japan and internationally, is the “Nice” range of Cup Noodles, which has the same rich flavour but fewer calories than its standard counterpart. 

Similarly, some products are being released in smaller portions for older people who tend to eat less, while the company has found that certain ranges – such as the Thai Tomyam Kung Noodle – have found a firm following with female consumers.

“We have found that often Japanese people will go to an izakaya after work, have a few drinks and then they decide they want a big bowl of ramen,” Suzuki says. “We feel the Nice range satisfies the needs of such consumers with none of the guilt.

“Ramen really is comfort food for Japanese people and Mr Ando’s ‘magic noodles’ are just that, plus they can be a low-calorie alternative.”

Ando remained an innovator throughout his life and in 2005, at the ripe old age of 95, perfected his final contribution to the instant noodle menu, Space Ram. Designed to be eaten by astronauts – as it has been – Space Ram uses his original flash-frying method, although the noodles come as bite-sized nuggets in a plastic pouch.

“It’s funny, but a few years ago I was on a business trip in Europe and I’d been gone for several weeks when I went into a supermarket in a town in Wales to get something to eat after a meeting,” says Chris Dunn, an export trade consultant who has lived in Japan since 1990.

“Among the biscuits and other different snacks on the shelves were these immediately recognisable Cup Noodles,” he says. “All of a sudden, as I’m standing in this supermarket, I get a lump in my throat. And I want to go ‘home’. Home for me is really Canberra, but I just want to get back to Japan and – for me – there is apparently nothing more Japanese than a Cup Noodle.”

Source: South China Morning Post by Julian Ryall

Haidilao Prices Shares at Top of Range Before Wednesday's IPO

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(Caixin) Haidilao International Holding Ltd. has priced its shares at the top of their range ahead of its hotly anticipated initial public offering (IPO) in Hong Kong on Wednesday, suggesting that trade war jitters have not spoiled investors’ appetite for China’s most popular hot pot chain.

The company confirmed the HK$17.80 pricing in a filing with the Hong Kong stock exchange today. It puts Haidilao on course to raise about HK$7.27 billion ($930.4 million) when its shares begin trading on Wednesday. This would give the company a valuation of around $12 billion, greater than all other Hong Kong-listed restaurants combined.

The figure suggests investors remain convinced of the company’s growth prospects despite generally weak markets deflated by fears of further fallout from ongoing trade tensions with the U.S.

Haidilao’s restaurants are known for serving spicy broths and providing attentive customer service, which includes giving free manicures, shoulder massages and dance performances. It ratcheted up revenues of 7.3 billion yuan in the first half of 2018, a year-on-year increase of 54.4%. Profits attributable to major shareholders were 647 million yuan in the same period, a year-on-year increase of 17.04%.

The IPO will see Haidilao float just 8% of its capital. Of that, 40% has been taken up by cornerstone investors including Morgan Stanley and private-equity firm Hillhouse Capital Group. Yet available shares have been substantially oversubscribed, with over five times as many retail investors applying for the retail shares allocated.

The funds raised by the IPO will go toward the company’s ambitious expansion plans, with it hoping to add up to 220 restaurants to its 360 existing this year, largely by opening up more restaurants in China’s less prestigious third-tier cities. It is also pushing abroad, with almost 500 applications made to open stores in Australia, the U.K., Malaysia and Vietnam.

At present, analysts generally think the company’s IPO and expected profits will give Haidilao a price-to-earnings ratio of around 30. That would put it roughly in line with the average ratio of 37 for major international chain restaurants such as McDonald's, Starbucks, and Yum! China, according to statistics from Citigroup.

Source: Caixin By Ke Dawei, Wang Luyao and Liu Yanfei

Chinese hotpot chain Haidilao fizzles after strong start in Hong Kong debut

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(Reuters) - Haidilao’s shares gave up their sharp initial gains on debut in Hong Kong on Wednesday, raising questions about the Chinese hotpot chain’s $12 billion valuation and about the outlook for IPOs in the financial hub.

It is the second major Hong Kong listing in a week to lose steam after a strong start. Chinese online food delivery-to-ticketing services firm Meituan Dianping gained about 5 percent on debut last week but is now trading below its initial public offering (IPO) price.

Haidilao climbed as much as 10.3 percent early on Wednesday to HK$19.64 compared with its IPO price of HK$17.80. But it retreated later to close at HK$17.82.

Haidilao, which mainly serves spicy Sichuan style hotpot and is popular for the free services and entertainment such as manicures and board games offered to waiting customers, raised almost $1 billion in its IPO.

Steven Leung, sales director at brokerage UOB Kay Hian, said Haidilao was already overvalued.

“The valuation is not at a very attractive level. People will be very selective regarding upcoming IPOs,” he said.

Haidilao’s $12 billion valuation puts it almost at the level of China’s biggest fast-food chain Yum China Holdings Inc which is worth $13.4 billion and owns rival hotpot chain Little Sheep.

The IPO has boosted the riches of Zhang Yong, the former tractor factory worker who co-founded Haidilao in 1994, making his holdings in the company worth about $8.2 billion.

Haidilao, which posted a post-tax profit of 647 million yuan ($94.11 million) on revenues of 7.3 billion yuan for the first six months of the year, could raise $1.1 billion in total if a 15 percent “greenshoe”, or over-allotment option, is exercised within one month of the start of trading.

Hong Kong is on track for a bumper year of listings, with $28.7 billion raised so far. That has been propelled by a stock market rally late last year that encouraged would-be listings, and by rules introduced this year to attract tech firms by allowing them to weight voting rights in favour of founders.

But an 18 percent drop in the benchmark Hang Seng index from its January high and a worsening Sino-U.S. trade war have weighed on the performance of several IPOs, such as those of smartphone maker Xiaomi Corp and China Tower, which are trading below their IPO price.

Haidilao plans to use the proceeds to fund its international expansion into markets including Britain and Canada, and to develop and implement new technology in a bid to better control food safety after food hygiene issues over the past two years.

CMB International and Goldman Sachs led Haidilao’s IPO.

Source: Reuters; Reporting by Julia Fioretti; Editing by Muralikumar Anantharaman

Starbucks shakeup aims to revive flagging fortunes

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(China Daily) Starbucks Corp is planning to make "significant changes" to its organizational structure, while an industry expert said the coffee giant's new delivery services in China won't serve as a major boost.
According to a letter sent to employees by CEO Kevin Johnson, the restructuring, which could include corporate layoffs, is an attempt to combat the popular coffee retailer's falling sales and reignite investor interest, Bloomberg reported on Monday.
"We must increase the velocity of innovation that is relevant to our customers, inspire our partners, and is meaningful to our business," Johnson said in a memo. "To accomplish this, we are going to make some significant changes to how we work as leaders in all areas of the company."
Starbucks's third-quarter fiscal results ended July 1, 2018, showed that its global store sales increased 1 percent, but China store sales decreased 2 percent.
The world's largest coffee chain hosted its first-ever China Investor Day in Shanghai on May 16, where the company announced plans to build 600 new stores annually over the next five years in China, a goal that will double the store count from the end of 2017 to 6,000 across 230 cities by year 2022.
Starbucks China launched its delivery services on Sept 19 in Beijing and Shanghai. It plans to expand such services to more than 2,000 stores in 30 cities in the country by the end of this year. More than half of its current Starbucks stores in China will be covered by then.
"Starbucks Delivers" is the first delivery services offered by Starbucks globally. It will be available through both the Starbucks and Ele.me apps. The delivery fee for each order will be 9 yuan ($1.31).
Starbucks, which takes up the majority of the coffee chain market in China, has faced mounting challenges from emerging local coffee brands that have offered delivery services. Luckin Coffee has opened 1,100 stores and has free delivery for items priced above 35 yuan ($5.09) or 6 yuan for each order under 35 yuan.
Cristina Wang, a senior manager at a major tourism service provider in Beijing's central business district, said she is looking forward to trying Starbucks' delivery service but will keep most of her purchases in stores as the delivery fee is quite high if ordered on the daily basis. "Starbucks coffee is already pricey compared with other brands," said Wang. "Adding 9 yuan for each order only makes it even more unaffordable."
The development of Starbucks businesses in China in recent months of this year has been volatile, said Zhu Danpeng, an independent analyst specializing in the food and beverage sector.
"Though the new delivery services will help Starbucks to catch up with peers in delivery sector, its core competence could be weakened by its pricey delivery fee."
Source: By Wang Zhuoqiong | China Daily 

Fast food fashion: Yum China's plan to get Pizza Hut back in vogue

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(Reuters) - In a Shanghai bistro, surrounded by brass trimmed lamps and Italian marble, models and Chinese stars sported outfits of black, white and electric purple, the signature colors of veteran American fashion designer Anna Sui.

The catwalk-style event is no fashion show, however. Instead it is part of a major push by fast food giant Yum China Holdings Inc to give its Pizza Hut brand a high-end makeover amid rising competition and flagging sales.

The glitzy store and haute couture underscore a sharp strategic shift Pizza Hut is taking to revive its fortunes. The pizza chain has experienced tumbling same store sales this year that have dragged down Yum China’s overall growth.

“The brand needs to be somehow rejuvenated,” said Leon Zhang, Shanghai-based partner at branding consultancy Prophet, highlighting a rise in health-focused consumers and a growing array of options for Chinese diners that have hit the chain.

Pizza Hut has taken note. Alongside the tie-up with Sui - more at home at fashion shows in New York or Milan - it will open a test center for innovative products in Nanjing this week and roll out new “Kiosk” and “Express” store formats.

The chain has removed some badly received products - such as pizza topped with expensive abalone shellfish - and shut some concept stores, including one with robot waiters.

Pizza Hut says it has spent at least $60 million in upgrading its products since September last year and is introducing new technologies such as those allowing customers to order food by scanning QR codes on the tables.

Jeff Kuai, the pizza chain’s general manager, said the brand had “streamlined” its menu and bolstered its online presence to catch up with its better-performing sister brand, fried chicken chain KFC.

“We’ve learned a lot from the KFC turnaround and are making progress on all aspects of the Pizza Hut revitalization plan,” Kuai said in comments sent to Reuters. “We are confident in our revitalization plan and committed to returning the brand to growth.”

STANDING OUT

The Pizza Hut turnaround is not Yum’s first salvage job in China. The firm had to restore confidence in all its brands after a food scare in 2012 and again in 2014. In 2015 it opened a high-end Italian restaurant as a test “lab” in Shanghai.

The New York-listed firm, spun off from Yum Brands Inc in 2016, owns Pizza Hut, KFC and Taco Bell in the country and is the largest fast food operator in China with more than 8,100 outlets. It is valued at $13.4 billion and looking to more than double its number of stores to 20,000 in the long-run.

While it has stabilized sales growth at KFC with upgraded stores, a big push on delivery and automated check-outs, Pizza Hut’s 2,200-plus stores have proved to be more difficult to turn around.

The chain has posted just three quarters of positive same store sales growth in China since the start of 2014.

“At the moment they’re really struggling to differentiate themselves enough to stand out from the rest,” said Andrew Atkinson, marketing manager at Shanghai-based research and marketing consultancy China Skinny.

“There isn’t a clear message about why Pizza Hut is special and why Pizza Hut has a position in the space.”

Major rivals include Pizza Express, bought by Chinese equity firm Hony Capital in 2014, chains like Papa John’s and Domino’s Pizza and a growing array of smaller, local chains doing well with new products and helped by a boom in deliveries online.

These include Shenzhen-originated Le Cesar - known for inventing a pizza using the popular Asian durian fruit - that now has over 120 stores, similarly sized Mua Pizza and Magelita Pizza with 600 outlets.

Pizza Hut’s new-look for its stores and staff - which will be gradually rolled out around the country - could help the brand stand out more, analysts say. The shift comes at a critical time for Yum China, which recently rebuffed a $17.6 billion buyout from a Chinese-led consortium.

The Shanghai Pizza Hut outlet, in an upscale mall, may be the future model. It bears none of the signature red and yellow hues associated with the brand in the United States and pizzas are not the main attraction on the menu.

Instead it has trendy, modern interiors, and popular dishes in China like omelet rice and Australian steak to attract younger consumers. Yum China’s chief executive has described the push as helping make the brand “Instagram-worthy”.

That might help win over consumers like Wang Chupeng, 23, an undergraduate student in Hangzhou.

While she likes the atmosphere and student deals Pizza Hut offers, Wang felt the brand was still caught between more premium and budget rivals.

“If I want to eat pizza I’ll usually think of somewhere else. I’d rather pay a bit more to get a better pizza,” she said. “Overall I think Pizza Hut is a bit expensive compared to other places with a similar quality product.”

Source: Reuters; Reporting by Brenda Goh; Additional reporting by SHANGHAI Newsroom; Editing by Adam Jourdan and Lincoln Feast.

State Council to inspect food safety at schools

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(Xinhua) State Council authorities will conduct food safety inspection at schools following recent food poisoning incidents in several regions, according to the office of the State Council Education Supervision Committee.

The inspection aims for the sound implementation of the nutritional improvement plan in China's rural areas.

The office has asked local officials in charge of education to take effective measures to prevent the occurrence of such incidents.

The office has also ordered overhauls of school canteens, and that units and individuals found responsible be seriously punished.

It also asked for a strict entry threshold for food suppliers at schools and immediate withdrawal of illegal suppliers, urging strengthened supervision over food sanitation.

The schools should make public the food price and information of suppliers, it said.

Launched in November 2011 for elementary and middle school students in China's rural areas, the nutritional improvement plan offers schools subsidies to build canteens or outsource breakfast and lunch from catering companies, as well as free nutritional packages for infants and information on healthy nutrition for their caregivers.

Source: Xinhua

China sees exponential growth in wine imports

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(CGTN) Several years of rising demand has made China one of the world's largest wine markets.

This fascination is particularly strong in the country's southern Guangdong province where some locals even attend classes to experience the rich wine culture.

Swirling, smelling, and sampling: Three steps in wine-tasting make up one lesson at a wine course. 

What was once frowned upon as a bourgeois lifestyle has become a status symbol for China's middle class. 

Dario Silva, a wine educator, started his company four years ago, selling Portuguese wine and teaching wine classes to help make Chinese consumers more knowledgeable.

Three years ago, most customers coming to the course were professionals but now the course has attracted a wider type of people, he said, noting the course explains the taste, alcohol content and how long wine can be kept after being opened.

Local wine importer named AFC has long been tracking consumer trends. It imports wines from two specific countries for its customers. 

"We found Chinese consumers prefer Australian wine over French wine. Many say it has a stronger flavor and a price advantage. We import New Zealand's wine because it is clean, organic and sustainable. These two wines are great combinations with Cantonese cuisines," said Louis Wong, 
China's district deputy general manager for AFC.

China has been the world's largest wine market and it is importing more wine from countries like Australia, Chile and Georgia.

"Half of China's population is between age 20 and 40. If each of them consumes twenty bottles of wine a year, that'd be 100 billion bottles, 10 times how many China imports now," Wong added.

In other words, the market has much more potential. Wong's company bought a chateau in Northland, New Zealand two years ago. Their goal is to develop their own supply chain overseas, bringing the freshest wine directly to Chinese dining tables. 

China is already the world's largest market for grape wines and Wong said compared with twenty years ago when the import business first started, the nation has seen exponential growth in the sector. 

In 2017, China imported wine worth nearly three billion US dollars, an 18 percent increase from the previous year.

Source: CGTN

Coffee in China is attracting big backers, from Bill Ackman to Coca-Cola

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(Bloomberg) China's nascent cafe scene is attracting billions in investment from Coca-Cola Co, internet companies and even high-profile hedge fund managers including Bill Ackman.

Billionaire investor Ackman's Pershing Square fund recently took a $US900 million ($1.3 billion) stake in Starbucks because of its "growth opportunity" in the world's second-largest economy, whose cafe landscape it currently dominates.

A month before, Coca-Cola paid $US5.1 billion for UK chain Costa, which has 400 cafes in China, a figure it wants to triple in the next five years.

Powered by venture capital money from the likes of Internet giant Tencent Holdings, local start-ups like Luckin Coffee and Seesaw Coffee are aggressively expanding store count in an attempt to challenge Starbucks, which is opening a store every 15 hours in China.

The coffee-shop market in China is projected to grow by 32 per cent to 79.4 billion yuan ($16.3 billion) by 2022, from 60.1 billion yuan last year, according to research firm Mintel. But the appeal of coffee in China is driven by factors beyond healthy short-term growth.

A report involving 4000 Chinese consumers in big cities aged 15 to 49 by research firm Kantar Worldpanel reveals two factors driving bullishness: only a minority of Chinese consumers currently buy coffee, but those who do spend more on average than drinkers in developed coffee markets such as the UK and Spain.

"There's a huge gap in consumption between China and other developed markets and that catch-up will bring a lot of additional returns," said Jason Yu, general manager of Kantar Worldpanel in Greater China.

Coffee is not part of traditional culture in China and despite the rapid growth of chains like Starbucks, the average Chinese drinker makes far fewer trips to buy coffee than their counterparts in the UK or France.

As coffee-drinking becomes more common, growth is likely to accelerate.

Non-alcoholic drinking occasions in China are still dominated by tea. Only 3 out of 10 consumers purchased coffee in the past year under the report, compared with 7 out of 10 in the UK.

The potential for coffee to catch on is enormous, though Kantar's Yu said the java industry still faces a challenge from tea franchises offering milk and bubble tea products.

"This under-penetration is a double-edged sword," Yu said. "A lot of room for expansion but also a lot of competition."

Despite coffee not being an entrenched habit among Chinese consumers, those who are buying coffee spend on average almost twice as much as drinkers in developed markets. This is because coffee culture in China has been essentially created by Starbucks in the past decade.


Rather than a quick espresso shot to start the day, Chinese consumers tend to see a coffee purchase as a premium treat for after work or the weekend. They're more likely to spend big on fancy Frappuccinos and the like.

Those high prices could come down as rivals vie for customers, Yu said. "As competition grows, that will also cause prices to drop," he said. "Luckin, for example, will likely compete with Starbucks on price.'

Source: Bloomberg

Chinese Baijiu maker inks record sponsorship deal with Australian Open

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(Xinhua) The Australian Open Tennis Grand Slam is celebrating the largest Chinese sponsorship deal in the tournament's history, with Baijiu brand Luzhou Laojiao set to become an associate sponsor of event for the next five years.

Announced on Tuesday evening in Shanghai, the partnership is being viewed as a major win for organizers who have invested heavily in promoting the event to Chinese travelers.

"We are delighted to welcome Luzhou Laojiao to the Australian Open partner family, a significant event in the history of our organisation," Tennis Australia's chief revenue officer Richard Heaselgrave said in a statement.

"We've made no secret that China and the region are a major priority for the Australian Open, and that we take our role as the Grand Slam of Asia-Pacific seriously."

"The Australian Open is the biggest sports and entertainment event in the world in January, and the world's best players and stunning tennis action attract the eyes of the world both in Melbourne and through our global broadcast."

Coming on the same day organizers also announced a record prize money pool of 60.5 million Australian (42.87 million U.S.) dollars, Luzhou Laojiao will now join the likes of Rolex and ANZ Bank as major sponsors of the tournament.

With over 750,000 visitors to the Australia Open this year as well as 1 billion broadcast viewers watching the action around the world, Luzhou Laojiao board chairman Liu Miao said, the partnership is "undoubtedly another historic milestone" in the internationalization journey of the company.

"In the future, we will work closely together with the Australian Open in promoting the sport of tennis, establishing sports charity programs, and building a stronger consumer base to activate this comprehensive, multi-dimensional and long-term collaborative partnership, as well as to enhance our communications with our global consumers," he said.

Source: Xinhua
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