Liuzhou LMZ Losing in the Chinese Market

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When most people think of the brands that are found in China, they automatically think of success. However, that is not the case for the toothpaste maker in China called Liuzhou LMZ. The company has been the leading toothpaste brand in China for several years, but it would seem that it is losing its edge in the Chinese market.

Losing by the Numbers

According to the latest figures released by the company, Liuzhou LMZ saw a deficit within the first six months of 2015. An 89.6 million yuan deficit to be exact, a figure that makes many CEO’s cringe. Add into this, the company has been expanding into new areas recently, and they are not seeing many sales in these new location. The company has several products they sell, but their toothpaste is their main market. Within the past year, the toothpaste aspect of their business only brought in 69.9 million yuan, which only accounted for 10% of their total earnings for the year.

Liuzhou LMZ at Its Peak

For the past two decades, Liuzhou LMZ has been within the top three brands for toothpaste sells within China. During their peak, the company sold over 500 million tubes of their LMZ Herbal Toothpaste. Now, the numbers are not so bright for the company.

The Decline of Liuzhou LMZ

If someone were to look into the market, they would find that Liuzhou LMZ does not even have a spot in the top 10 toothpastes on the market. So why is the company seeing a decline?

Many point to the fact that there are more competitors for Chinese consumers now. Not only are companies having to compete with the toothpaste options in stores, but more and more Chinese consumers are utilizing online shopping to purchase products from overseas producers. This is a huge task for any company in China to deal with.

Learn more about Chinese online shopping here

Other people are pointing out that Liuzhou LMZ made some bad decisions for their company. The company started to expand their business, and neglected to enhance their toothpaste sector of the business, which was their main sector. According to Chang Yizhi, a researcher at CIConsluting Agency:

“Liuzhou LMZ put too much of its money and energy into unfamiliar fields and neglected the developed of toothpaste business.”

The Future of Liuzhou LMZ

The company is trying to remedy the situation that they have found themselves in. However, many professionals in the field wonder if the damage is already done. After all, it is hard to change the toothpaste habits of a person who has no reason to change.

About Author

Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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