Consumer Brands Are Creatively Communicating Through Modern Media
As China transitions towards consumption, brands are aggressively positioning marketing budgets towards modern media. Across the board, spending on new forms of media increased from 20% of marketing budgets in 2012 to 43% in 2015, and is expected to reach 60% in 2016. Modern media refers to content made available on the internet and mobile […]
China’s New Normal, Business as Usual
Chinese capital markets remain extremely volatile, and while 2016 has been off to a similar start for our businesses as last year, concerns about the reliability of official economic numbers in China, abilities of policymakers, transition to a consumer-led economy and strength of the rising middle class are prevalent. We still believe that China’s New […]
China’s Family Businesses Sell Out to Private Equity
After spending half his lifetime building the family snack food company in the eastern Chinese city of Hangzhou, Yao Weizhong had run out of steam. His 22-year-old son showed little interest in the business, and Yao needed fresh capital and expertise to keep it growing. So Yao, 48, chose a path taken by a growing […]
Role of Chinese Private Equity in a Complex Environment
During the fourth quarter of 2015 and into the first quarter of 2016 as our teams assembled this report, Chinese capital markets were extremely volatile, with most equity-focused hedge and long-only funds reporting being down double digits. Despite these worries, we remain of the view that 2016 is starting out in a very similar fashion […]
Control Investing in China | AVCJ Video Interview
The key to persuading a Chinese entrepreneur to give up control of a company is not to approach him as a private equity firm, but as someone who knows how to run the business, says Derek Sulger, a partner at mid-market consumer buyout firm Lunar Capital. “We can do that because the types of […]
Crouching Tiger, Hidden Opportunities; Luxury firms find growth in Asia despite China slowdown
“It’s not about market dynamics,” said Kelly Hu, an associate at China-focused private equity firm Lunar Capital, “It’s about finding the right brands and the right products for the right market segment.” Hu was speaking at the 16th Fashion & Luxury Goods Industry Meeting, celebrated at IESE’s Barcelona campus this month. The meeting was […]
The Design of Intelligent Cities are Changing Consumption in China
Multi-faceted efforts are being made to transition China’s economy from a reliance on fixed-asset investment to that of market-driven consumption. As announced with China’s 13th Five-Year plan, civil engineers are designing and developing “Smart Cities”. Under this plan, local and national governments are making targeted efforts to address urban resource shortages, pollution, traffic congestion and […]
Lunar 2016 Outlook Remains Positive
We started 2015 with enthusiasm for the Chinese consumer, A-shares generating 53% annualized returns, and healthy private equity performance. This year begins with severe pessimism about China’s economic transition, public markets all sharply lower, and private equity returns in question. One friend complained that his clients were demanding to know why anyone even still focuses […]
Catching the Next Wave of Consumption Driven by Policy
It has taken China more than three decades of rapid urbanization and persistent high growth rates to get to where we are today, and the Chinese economy is now entering a “new normal” that requires sustained efforts to re-balance its fundamental economic structure to focus on stable, single-digit, growth driven by the consumer. Beijing’s recently […]
PEI Outlook 2016: China’s year of the Mid-market
In its World Economic Outlook 2016, the International Monetary Fund projects a slowdown in growth in China from 6.8 percent in 2015 to 6.3 percent next year – much lower than envisaged at the start of 2015. However, the government’s attempts to improve the quality of growth through structural reform and its nurturing of a […]
