Date
20 October 2017
P&G said it will shed at least 90 of its current brands over the next two years. Photo: China Daily
P&G said it will shed at least 90 of its current brands over the next two years. Photo: China Daily

P&G prunes weak brands to gain finer focus in China

Twenty-six years ago, US consumer goods giant Procter & Gamble entered China by introducing its Head & Shoulders shampoo. China is now the group’s second biggest market and accounts for about 6 percent of its global sales.

P&G is so popular that at least one its products can be found in almost every Chinese home. Its brands have become household names such as Vidal Sassoon and Pantene for shampoo and SK-II and Olay for skincare.  After being in the market for decades, however, the younger generation tends to call these brands as “mommy’s shampoo” or “mommy’s beauty cream”. 

So the company is now focusing on attracting Chinese youngsters to rediscover the P&G brands, not as their parents’ choice but as their own. Although it has yet to unveil details of the plan, P&G is seeking to reduce the number of products to help the group focus on promoting core brands to young people.

Chief executive A.G. Lafley said the company will shed at least 90 of its current brands. Over the next one to two years, the target is to generate 90 percent of sales and 95 percent of profits from 70-80 best-selling brands.

Lafley’s “less is more strategy” is based on the view that today’s customers “wouldn’t need so many choices, all they really want is to live a simple and convenient life”.

Moving away from its non-core businesses, P&G sold its pet-food unit Iams to arch rival Mars for US$2.9 billion earlier this year. The group has also been removing a number of brands from the Chinese market since 2011, including Zest, Max Factor and Ascend.

More layoffs could be coming as P&G China steps up its restructuring exercise, after shedding staff last year and earlier this year.

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CG

EJ Insight writer

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