Domestic Brands Winning Market Share
Over the next decade, we believe that Chinese brands will continue to extend market share by leveraging local tastes and presence. We believe this will be beneficial for our strategy of acquiring and developing mass-market premium brands that are familiar to, and resonate with, increasingly sophisticated Chinese consumers who are willing to pay more for […]
Our Perspective on the Current Economic Situation and China’s Consumer
China may be undergoing a bumpy but managed landing but our operations suggest that the consumer remains on track. The Chinese economy is not melting down. That notwithstanding, this shift has resulted in Asian market capital outflows that have driven valuations of certain key markets to levels not seen since the global financial crisis. […]
Chinese Consumer Story Remains Strong
Analysts and party leaders are calling for a need to rebalance China’s development toward a consumption-driven economy, and move away from investment-led growth, which has slowed. Despite the gradual increase in number of China skeptics, we are confident that China remains the fastest growing consumer market in the world. A recent McKinsey report argues that […]
Retail Rounding a Corner
Newspapers last year were littered with stories highlighting concerns about expanding retail inventories driven by short-sighted management chasing top-line growth. Blind expansion from 2006 to 2011 resulted in unstable inventory levels as total industry points of sale more than tripled, and EBIT margins dropped by close to half. Today, there are signs that the industry […]
The Mobility of Consumption
Mobile “on the go” shopping in China is becoming the norm – from researching products and discussing with friends to purchasing with a swipe of the finger. Mobile shopping is changing the way customers discover, research and ultimately buy products in China, primarily through 1) providing tools to conduct research while in-store, 2) creating robust […]
A Growing M&A Culture
M&A activity in China reached record highs in 2014, with the consumer, technology and financial sectors leading the way. According to PWC, total M&A in China surged by 55% in both volume and value, with foreign strategics increasing their activity by 58% and domestics 63%. Last year’s M&A growth provided tailwinds for private equity in […]
Lunar Capital Update: Achievements in 2014
Our achievements in 2014 continue to serve as a validation of our thesis, strategy and commitment to consumer-focused, operationally-intensive, control-oriented investments in China. Our most recent fund, Lunar Capital Partners-III, is now fully invested with strong prospects for further valuation gains and distributions. Our apparel investment, Yeehoo, ended 2014 with revenue and earnings up significantly, […]
A Process for Delivering Strong Risk-Adjusted Returns
We believe that robust, well-governed processes are critical to source, acquire and build better businesses in China’s growing consumer market, and will allow us to generate stronger risk-adjusted returns. Our investment process follows ten-stages that emphasize timeline, control, discipline, transparency and results. We aim to leverage our resources and experience running Chinese consumer companies, monetize […]
Investing in the Chinese Consumer: The Scale of the Opportunity
The scale of investment opportunities in consumer industry in China is growing, and we believe that Lunar offers an attractive proposition to the owners of businesses that we acquire. We provide a solution that is operationally oriented in the belief that transitioning businesses to professional management unlocks the potential for tremendous value creation, and we […]
Succession-planning Deals: A Matter of Legacy
By Andrew Woodman Long a feature of the developed markets private equity, succession-planning opportunities are beginning to pop up in emerging Asia. Regardless of geography, convincing a founder to sell his business is a challenge Over the course of three decades, Chinese meat snacks producer Guizhou Yonghong – best known for the popular Niutou jerky […]
