Coke signs Chinese athletes for Olympic campaign

And other news in Greater China

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BEIJING--Coca-Cola Co. is updating its Olympic marketing program in China with a new team of celebrity endorsers, known collectively as “Ao Yun Xing Zhen Rong” (Olympic star team), featuring top Chinese Olympians from different sports.

The athletes include basketball player Yao Ming and track star Liu Xiang, who holds a world record in the 110 meter hurdle, as well as divier Guo JingJing, table tennis champion Wang Liqin, rising basketball star Yi Jianlian and women’s volleyball team captain Zhao Ruirui.

The team's creation marks the first time that Coca-Cola has worked with Yao Ming, one of the world's best-known basketball players. In 2003, the Houston Rockets center signed a domestic deal with PepsiCo's Gatorade brand as well as an international relationship to help market the Pepsi brand globally, but that relationship has ended, freeing Coke to sign up the athlete.

The team’s debut coincides with the launch of a series of intensive marketing programs built around the 2008 Olympic Games in Beijing, as well as the nomination process of the Olympic torch relay.

Starting this month, Coke will run Olympic-themed TV commercials created by Red Lounge, a kind of in-house shop it created in Shanghai led by Leo Burnett Worldwide, that will air nationwide on China Central Television (CCTV). Special promotional packaging was designed as collectibles, connected to a summer promotion that will run from July through September.

Coke created the promotion with China Citic Bank and Visa International. Consumers can win a collection of credit cards featuring its celebrity endorsers. Other Olympics-related prizes include T-shirts and sports water bottles.

The campaign is also running on the U.S beverage giant’s Chinese iCoke web platform, which provides opportunities for consumers to interact with the athletes in virtual playrooms. Consumers can also redeem Olympic-themed souvenirs and collectible items online.

Coke is also offering opportunities for 1,188 Chinese citizens to become torchbearers and escort runners next year, according to David Brooks, VP-general manager of Coke’s Olympic Project Group in Shanghai. They can participate in the nomination and selection process through the iCoke web site as well as local selection activities organized by Coke’s bottlers across the country.

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Cosmetic sales grew 17% last year
SHANGHAI--China's cosmetics sector, including skin care and make-up products grew by 17% in 2006 to $2.2 billion, from $1.9 billion in 2005, according to TNS research company.

Annual growth of 15% to 20% is likely to continue through 2009. If that happens, sales in China's cosmetics market could reach $3.8 billion in 2009 and surpass the U.S. cosmetics market, which was worth an estimated $3.6 billion at the end of 2006, and  grew less than 0.2% in 2006, compared with the previous year.

“We don't know for sure when China's cosmetics market will eclipse the U.S., but it will happen sooner than we think. The year 2009 is likely,” said Jason Yu, regional account development director for TNS Worldpanel in Shanghai.

A range of factors are driving China's market. Make-up prices rose almost 16% on average last year, compared to 2005, while prices of facial cleansers and skin moisturizers increased by 9.7% and 8.4%, respectively. Consumers are trading up to more expensive items, particularly for anti-aging products. More than 47% of facial products sold in China in 2006 cost at least $12.90, a 3% increase from the previous year. Anti-aging products comprised nearly 21% of the value of purchases in 2006, a big increase over the 13.6% share of spend for anti-aging products in 2005.

Also, the government has relaxed restrictions on direct sales, a major channel for cosmetics sales. China put a moratorium on direct sales of cosmetics in 1998, but a new law last year allowed direct sales to resume, albeit under tight regulations.

China's tier two cities are spurring growth in cosmetics sales. Those smaller cities accounted for nearly 41.9% of make-up sales in 2006, up from 38% a year earlier, and shoppers there now spend almost as much per trip as the first-tier consumers in cities like Shanghai and Beijing. 
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