The Rising Influence of Rising Affluence

[DewDiligence]

Chinese shoppers flock to internet:

http://www.wsj.com/articles/western-firms-caught-off-guard-as-chinese-shoppers-flock-to-web-1434274202

After enjoying nearly three decades of steady growth in its China business, Unilever PLC last year watched sales fall off a cliff. The maker of Dove soap, Lux shampoo and Comfort fabric softener warned in October of a 20% drop in its third-quarter China sales. The next quarter, the company announced another 20% fall.

Unilever blamed a slowing Chinese economy and a pullback by shoppers. But a close look at retailing trends in China suggests Unilever was also feeling the pain of the migration of hundreds of millions of Chinese consumers to online shopping.

Unilever wasn’t the only Western company overestimating brick-and-mortar. Swiss food company Nestlé SA has been burning instant coffee it couldn’t sell in stores. It recently told The Wall Street Journal it failed to fathom the extent of how quickly and broadly retail was changing in China.

…An estimated 461 million Chinese consumers, a third of the population, are now shopping online, up [tenfold] from 46 million in 2007…