A P&G booth during an expo in Beijing. (Photo/CFP)
The China division of multinational consumer goods company Procter & Gamble plans to launch a new series of herbal products within two months in an attempt to boost slumping local sales and enhance the company's preparedness against Unilever, its main competitor, reports the 21st Century Business Herald.
Zhai Feng, head of the company's China division, allegedly resigned because of his responsibility for the decline of sales in the Chinese market. According to an unconfirmed source cited by the Guangzhou-based publication, a high-ranking P&G official in charge of marketing will take over the position that Zhai has left.
A financial report published in October showed that the company's revenue in the first quarter of 2012-2013 fiscal year declined 3.7% year-on-year. The sales of various products also showed a 3.5% to 7.4% decline during that period. As a result, quarterly net sales fell US$375 million from US$5.315 billion in the previous year to US$4.94 billion.
According to Lu Jian, a brand consultant who has worked with P&G for 10 years, cost increases in multiple areas in the past five years has caused the company to lose ground in the Chinese market, and placing too much importance on cutting costs will have negative influences on each part and level of the company's administration.
Lu said, "Before entering China, Unilever had already conquered the Southeast Asian market by introducing its Clear brand. The company's marketing team in charge of promoting Dove, a Unilever soap, used to work for P&G. Once talent was recruited, the strategies were directed to counter P&G's Head and Shoulders (a P&G shampoo)."
According to the 21st Century Business Herald, P&G announced earlier this year to layoff 8,000 employees this year.
Lu Jian 陸堅
Zhai Feng 翟峰