Happy Year of the Sheep to all readers of the OATS China Bulletin! In Chinese astrology, the sheep is an auspicious animal that heralds a year of promise and prosperity.
This would certainly be a welcome portent for a government that is already rounding down GDP forecasts across the board. According to the National Bureau of Statistics, more than two thirds of the nation’s provinces and municipalities missed their growth targets in 2014, while the remaining third has yet to divulge statistics.
Sheep, though trusting and helpful, are also known to cling to past and resist change. With the government slashing reserve requirement ratios (RRR) for banks to stimulate investment, the market looks similar to 2012 when the government was preparing to issue a massive stimulus to spur growth and fixed investment was a staggering 49% of GDP. With markets down and capital outflows soaring, it is hard to see if the cut has helped.
China’s lubricants companies, however, seem far from sheepish, but rather imbued with Keynesian ‘animal spirits’ and appetite for investment.
Tianhe Chemicals has opened a brand new R&D facility in China and is slated to open another $30m plant in India sometime in March. The chemicals concern, which raised $654m in its Hong Kong IPO last year, is investing heavily to catch up to international rivals like Lubrizol, who already have a strong foothold in the region.
Jebsen Group and CleanOil investment have also signed an agreement to produce high-quality auto and industrial products from recycled lube oil. The two companies are working on a green plant that will eventually have a 20,000 ton capacity and will cater to China’s booming passenger car market, which grew by a record 17m cars in 2014.
In the spirit of collaboration and expansion, Chery Automobile and Great Wall Lubricants have formed a strategic partnership that will see the two companies share information on supply chain innovation, cross border cooperation and international marketing in a bid to increase their competitiveness overseas. Great Wall are also deepening ties with XCMG, a construction behemoth, in a bid to capture the nation’s growing construction lubes market.
Forming partnerships is more important perhaps now than ever to stay competitive. Especially when considering and planning marketing campaigns. Forrester, a research agency, has created a ranking of the top digital agencies in China which also reveals much about the rapid growth of digital ad spending in China.
Knowing how to deploy resource will be key to planning a successful campaign. Fortunately, OATS’ versatile EarlFUSiON platform will deliver timely and relevant information to lubes consumers where they need it, when they need it.
For more insights on online marketing in China or to comment on anything you have read in this Bulletin, simply contact Diana Shen. As always, we look forward to hearing from you.
Sebastian Crawshaw
Chairman