Western Brands Rethink Strategies to Fend Off Local Rivals in China

Moves Include Tailoring Products to Chinese Tastes, New Partnerships and Even Sell-Offs

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BEIJING - The consumer landscape in China was very different in the 1990s, when Haagen-Dazs and Starbucks ventured in with premium products that were alien to most people. They made huge inroads nonetheless, opening outlets at a breakneck pace and raking in revenue.

But times are changing, and they, like many other Western brands, are reassessing their approach to the world's second-biggest economy, including possibly selling their businesses.

General Mills, which owns Haagen-Dazs, is working on a potential sale of its more than 250 stores in China. Starbucks is sounding out interest in its business in the country, where it has over 7,750 outlets. Sporting goods retailer Decathlon has started a process to sell about 30 per cent of its China business.

Reasons for this shift include the fierce competition from Chinese companies, which have evolved into nimble and sophisticated rivals with a deep connection to local consumers. Iconic brands including Apple and Nike face intensifying rivalries with local names such as Huawei Technologies, Xiaomi, Anta Sports Products and Li-Ning. The economic malaise in the wake of the Covid-19 pandemic has also affected spending habits.