This article is sponsored by The China Perspective.
Business Briefs returns this week with landline ringtones, multinationals, and coffee prices.
Ring tones invade the home
If you just can’t get enough of Auld Lang Syne on the Beijing subway, or if that kid saying “wei? you dianhua le” is just too cute to leave at the office, don’t fear! Beijing Telecom has started offering ringtone service for its fixed-line customers. The five-yuan monthly fee is waived for the first six months, and Beijing Telecom customers with the 58- prefix should be able to get the service completely free through the end of February.
Beijing Netcom is preparing a similar service to be rolled out in the first half of this year, so don’t fret if you’re not a BT subscriber – you, too, can choose an annoying pop song to alert you should anyone ever call you on your fixed line rather than your GSM, CDMA, or Little Smart.
Multinational influence
China’s largest companies saw their influence drop last year, says a recent study. Influence, which appears to be related to a company’s reputation as well as how widely its corporate culture is copied in China, is unsurprisingly enjoyed in large measure by US companies, who ride the coattails of American pop culture to win the attention of Chinese consumers.
Traditional stereotypes show up in the survey – German companies are respected by the Chinese public for their practical achievements and enviable work ethic, and Japanese companies are given kudos for their attention to detail, especially in autos and electronics. Japan is nearly equal to Europe, says the survey.
But for all of the accomplishments of Hong Kong and Taiwan-based companies, they have little influence on the mainland – they toil in silence, unappreciated and unrespected. What’s worse is that the influence of mainland companies has actually dropped from 2004 levels, primarily due to technological and administrative backwardness. It’s a familiar refrain, but one that industry leaders are working to change in the year to come.
IT investment
A CASS survey shows that IT investment has dropped in most small- and mid-sized Chinese businesses. In today’s increasingly wired world, this apparently contradictory result actually suggests that after a period of intense initial investment, these businesses have reached a point where they are comfortable with their IT situation and are concentrating on its maintenance and use.
After all, out of those companies surveyed, 98% were connected to the Internet, and 66% of all computers were online. We’re no longer in those heady days of 60 million-yuan investments in networks and websites. Average website investment in 2003, for example, was nearly 700,000 yuan, while this time round fewer than 5.5% of companies were willing to spend more than 500,000 yuan.
Perhaps the most telling result was in the area of satisfaction: between 71% and 75% of companies reported that they were “very satisfied” or “satisfied” with their ecommerce systems.
Prices up on Starbucks, KFC
If you live near Shanghai, your afternoon latte costs a bit more this year. Starbucks responded to rising costs by hiking prices 3 yuan on drinks with cream like cappuccinos and mocas, and 2 yuan on caffeine delivery vehicles like espresso and plain-old Americano coffee. Starbucks operates joint ventures with three partners in China; the ventures in the north and south did not announce price increases.
KFC also bumped prices 1 yuan or so on the menu items it didn’t mess with last year. Ever the optimists, both companies say that their customers won’t mind paying more.
Also in the news this week:
- The president of Visa International says that China is on the cusp of a “golden age” for credit cards.
- International oil giant Shell seeks a partner for filling station operation in another attempt to come up with a joint venture in which it has the upper hand over its Chinese partner.
- Just 70% of down clothing in China is up to standard, with some “down” products containing no down whatsoever.
These summaries were collected from the The China Perspective, which covers major business news and trends in the China marketplace.