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The China Shift: Economic Realities

By: Jeff Falk
Posted: August 5, 2008, from the August 2008 issue of GCI Magazine.

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In its first exploration on this topic, GCI magazine posed questions to Peter Kelly, owner and managing director of Taxi Cosmetics London, and Liz Grubow, vice president, group creative director of the LPK Beauty Group.

GCI: It seems that China has become a manufacturing center for Western companies, almost by default and through economic realities. Are companies re-evaluating their approach to China as a business endeavor?

Peter Kelly: Certainly a number of brands I am working with are re-evaluating their Asian strategy. Five years ago, Chinese manufacturing was seen as the answer to boost profit. However, today, while Chinese-made products are cheaper than “Made in the West,” the saving is no longer attractive enough to lure all brands away from their existing sources—be they their own facility or contractors.

Liz Grubow: There will be increased emphasis on sustainability and the environmental issues. Partnering with companies that are doing damage will not be supported.

GCI: Have economic realities changed the approach? How?