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19 June 2014

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The Big Call

China’s urbanisation challenge

Our research in 16 towns nationwide suggests that China’s drive to develop its smaller towns and cities may be more difficult than it foresees.

Consumer China

Cafés and bakeries – cafés eat into bakery market share

We expect leading coffee-shop chains to maintain double-digit sales growth in China, but rising competition from cafés, supermarkets and online retailers is proving bad news for bakery chains.

85˚C Bakery Café – strategic overhaul to drive growth

Gourmet Master’s on-going strategic overhaul – enlarging both its dining areas and its menu – should allow it to broaden its appeal into the café and fast-food breakfast markets, supporting growth and reinforcing its lead in the bakery market.

Costa Coffee – rapid expansion, brand-building challenges

Whitbread is banking on Costa delivering strong revenue and profit growth in Asia to offset weakening growth in Europe. However, building brand awareness in the shadow of Starbucks presents a real challenge.

Starbucks – rapid China expansion continues

Wide popularity and strong brand status continue to support rapid expansion in China. Robust same-store sales growth will likely be sufficient to maintain profitability in the face of rising rent and labour costs.

BreadTalk – growth in major markets offset by lower-tier challenges

A multi-brand strategy should help to augment the Singapore-headquartered chain’s popularity in first-tier cities, but its high prices may constrain expansion in lower-tier markets.

Financial China

Shadow finance slowdown intensifies

Our latest analysis of official and industry data highlights the slowdown in shadow financing seen since the middle of 2013, a trend that is raising default risks across a number of key sectors of the economy.

Selected financial charts

A selection of key financial data over the past fortnight.


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