Needed: Angota ho ne njumata in Chinese.
In this week's edition, the translation sector seeks manpower, the drink sector welcomes a thirst-quenching new entrant as it faces a toxin scare from an old standby, and yet another advertiser seeks out the Hunan TV magic.
Translators in Demand
Good news for translators, not so good news for people who need translation done: China's translation sector is reportedly running a 90% human resource shortage. The sector was worth 21 billion yuan last year, and is expected to reach 30 billion this year.
Of course, like many other industries, translation in China is a scattered, uneven business. Shanghai alone has 1000 companies, but translation quality is often less than ideal, to put it politely. The increasing international presence in China that demands quality translation has made things lucrative for the decent companies.
How lucrative is it? Profit rates of 35%-45%, if figures from Shanghai Business are to be believed. YesMeaning, a Shanghai-based company with franchises scattered throughout the country, says that an office translates an average of 20,000 to 40,000 characters per day (English to Chinese), which at a rate of 150 yuan per 1000 characters, works out to 90,000 to 180,000 yuan per month. After accounting for employee salaries and fixed costs, the company clears 35% in profit each month. Special services such as express translations or translations in obscure fields can add between 30% and 100% to the base price.
But that's if you hustle bits and pieces. There was apparently a deal last year between a Shaanxi steel mill and a California bridge project that required 2 to 3 million yuan worth of translation. A Shanghai company reportedly took on 1/3 of the project and cleared 300,000 yuan in profit.
Name-brand thirst-quenching arrives
Good news for all those active folks who need their electrolytes replenished. Gatorade enters large-scale test marketing this week, appearing in twenty urban areas around the country. Those of you living in Chongqing, Shanghai, Shenzhen, Guangzhou, and Qingdao will find this old news, since Pepsi conducted trials last year in those regions. Unsurprising to anyone who has tasted Robust's weak mizone is the result: Pepsi says Gatorade roundly crushed its domestic rival.
What's wrong with water dispensers?
Last year we couldn't brush our teeth or eat fast food for fear of cancer. This year it's non-stick pans, vitamin C drinks, and bottled-water dispensers. Yes, the ubiquitous water cooler has been fingered as a source of toxins - is it time to go back to lead-fortified tap water?
Well, not so fast. It's only one type of dispenser, albeit the the kind with a heated liner that describes practically all of the 80 million units in use in China. The constant heating and cooling of the liner apparently causes some of its materials to become six times more toxic than normal.
But there's a new type of linerless dispenser that doesn't provide a reservoir of water in which toxins can build up. It figures that the leading manufacturer of this type, Zhejiang Qixi, is behind the allegations that 99.3% of water dispensers are toxic. It intends to sell 1.6 million units this year.
The industry has other serious problems apart from interbrand infighting. From a height of 20 million units sold in 2003, the market stagnated, and then fell 7.8% last year. Domestic OEMs are having problems - Angel was dumped by GE because of substandard quality control. And domestically, issues with the machines themselves have turned people off dispensers - they're too noisy, they use too much electricity (four times an energy-saving refrigerator), and in a market where a 53% share is held by off-brands, there are problems with shoddy workmanship and cut corners. Industry leaders are seeking ways to solve some of their image problems, but sniping at competitors and spreading panic is probably not the best way to go about it.
Gillette throws in with Hunan TV
Will Hunan TV magic strike again? Proctor & Gamble, which bid 394 million yuan for spots on CCTV in 2006, has reached a sponsorship deal between its Gillette brand and Hunan Satellite TV. Hunan TV turned Mengniu Dairy into a major industry through its association with Super Girl last year, and P&G is hoping that something similar will happen with its recently-acquired razor company. For 8 million yuan, Gillette will attach its name to a televised talent competition related to the "Who's a Hero" program.
The Gillette Vector Hero Competition represents the first media partnership for Gillette since the brand was acquired by P&G, boasts HTV. However, some observers point to Gillette's high-end position in the Chinese market and wonder whether it's such a good idea to harness it to a rather low-rent show. Nevertheless, P&G plans to spend up to 100 million yuan with HTV this year, in particular a touring concert series ripped off of CCTV's "The Same Song."
Also in the news this week:
- Convenience stores in Shanghai that currently handle utility payments for local residents may halt the service due to low fees - they make from 0.25% to 0.4%, while stores in Taiwan and Japan make 0.6% and 1%, respectively
- Spending on print ads by the cosmetics industry increased 10.96% last year, one of the few sectors in which print ad spending did not decline. Urban fashion magazines were top markets.
- The cutoff for tariff exemption for printing equipment will be raised under new regulations, possibly spurring imports of high-tech press equipment.
These summaries were collected from the The China Perspective, which covers major business news and trends in the China marketplace.
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