Tuesday, March 14, 2006

Made in America

I just cought the tail end of a segment on CNBC where some president of an American company (it looked like they sold liquor) was discussing how well his products were selling in China. He said that the Chinese consumers prefer American brands made in America. They see this as a sign of quality. I thought this was interesting because it reminded me of a story that one of my friends told me a few years ago. This friend does business in China and visits the country frequently. On one of his trips to China he was being treated to a "fancy" dinner. His hosts brought out a box of Franzia Wine to the table instead of the usual Chinese Liquor he had been served at less ostentatious restaurants. Note I said "box" not "bottle" for those of you who might have missed that detail. Why were they serving Franzia boxed wine instead of Chinese Liquor on this occasion? Because they said "It is the best selling wine in America so it msut be the best wine in the world!". Does this portend a bright future for the likes of Robert Mondavi or Ravenswood once the average Chinese becomes more afluent and develops better taste in Wine? I suspect that there are a few more years to go before the Chinese move up from Franzia to the better mass-produced American wines, but the story will probably be good for any well known American brand that moves into China, especially those that represent low-cost products here. Cramer has highlighted this allready happening with Starbucks and Kentucky Fried Chicken. I wonder what other products like Franzia sitting on the shelves of my local Walmart are big hits in China?


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