IDEAS WANTED - The Clorox Company

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Where in the World Is Clorox? CHINA THE LAND OF OPPORTUNITY BY JEN DOZIER 10 “If you lived in the early 1800s, the place to be to make something of yourself was London. In the early 1900s, it was New York,” says Mike Rytokoski, vice president – general manager & Business Development, Greater China. “In the 2000s, it’s Shanghai.” For the past two decades, China has been an economic sensation, reporting double-digit annual gross domestic product (GDP) growth. In the past 10 years, China has built 50,000 new skyscrapers, which equates to about 10 New York Cities. And over the next five years, experts anticipate more than 300 million people (about the size of the entire U.S. population) will move from rural to urban areas of China in search of opportunities. But while China is expected to pass the U.S. within the next 10 years to become the world’s largest economy, it is still a relatively undeveloped country. With more than 1.3 billion people, the GDP per capita is still significantly behind the U.S. and other developed markets. And that leaves Clorox a lot of room for opportunity. Clorox currently has a small, but fast-growing business in China. The Glad® business is the No. 1 food storage brand in Southern China and Hong Kong. Clorox® liquid bleach is also the market leader in Hong Kong. Today we have a team of about 300 employees in Guangzhou, Beijing, Shanghai and Hong Kong, as well as a manufacturing plant in Conghua. “The team shares a dream for building a business and making lives better for their families and themselves. There is a feeling it can be done,” Mike says. The power of category growth in emerging markets Economically, there are two primary groups of countries in the world. The first group includes large and mature markets, like the U.S. and Europe. While consumers’ incomes may grow, they are more likely to buy luxury goods versus spending more on cleaning products. Most of our categories are relatively developed, and we grow by winning
market share from the competition or acquiring businesses. The second group includes fastgrowing, emerging markets. Many are still small economies, but they offer significant potential for longterm growth. Emerging markets have unique challenges, but generally, we grow as the category grows. As income levels rise, new consumers discover our product categories for the first time, and existing consumers begin to trade up to slightly more expensive, better-performing premium products. “To accelerate our own growth, we are looking at investing more in countries, categories and channels that are growing faster.” Mike says. “This is where China fits into our overall corporate portfolio strategy as a source of important future growth.” Most of our product categories are growing by double-digits in China, and we see potential for continued growth for some time to come. Expanding into new urban areas and varied economies China is so geographically large and diverse, we have to focus on specific areas. About a year ago, we expanded northward from Southern China, beginning in the Beijing metropolitan area. We now sell Glad products in almost 2,000 stores in northern China, and the Glad brand is already No. 2 in the food storage category in Beijing. The team is also working to expand our consumer base. As with all of our markets, understanding the consumer is key. While we use our knowledge from other markets, we have also found some very distinct differences among Chinese consumers. For example, the average Latin American consumer loves fragrance. Through consumer testing, we know the opposite is true for Chinese consumers. Typically their living spaces are so compact, a fragrance will overpower the senses. These consumers also typically equate fragrance with chemicals, which they want to avoid. Also, the average consumer in China today spends one tenth of what an average consumer in Latin America spends on home cleaning products, indicating significant upside potential. “We are focusing on premium products that have 60/40 wins with consumers. But we will also have a range of products with lower price points to help consumers with limited incomes enter the food storage category and buy a desired multinational brand,” Mike says. “Over time, we want to move more consumers from middletier to premium-tier products that offer superior performance as income levels continue to rise in China.” HOW BIG IS CHINA? Despite being large enough to span FIVE TIME ZONES, China has just one: China Standard Time. China is the FOURTH LARGEST country in the world by land mass and the fi rst largest by population. 1,331,000,000 + Chinese people make up roughly 20 percent of the world’s population. Clorox China employees gathered for their spring banquet to celebrate successes and talk about the future of the business. 11
Page 1 and 2: F O U R T H Q U A R T E R 2 0 1 1 I
Page 3 and 4: In Brief Project Atlas Moves Toward
Page 5 and 6: our current workloads and dreaming
Page 7 and 8: READY TO RESPOND CRISIS MANAGEMENT
Page 9: efforts around the Burt’s Bees, G
Page 13 and 14: Corporate Responsibility Ingredient
Page 16: The Clorox Company P.O. Box 24305 O

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