GUANGZHOU (AdAgeChina.com) -- Procter & Gamble Co. is experimenting with e-commerce in China, the world's largest internet market.
Many of P&G's top brands in the mainland, including Olay, Pantene, Rejoice, Illume, Head & Shoulders, Gillette, Max Factor, Oral B, Braun, Pampers and Crest, are now sold on Taobao.com (shop57895461.taobao.com).
Taobao.com is the business-to-consumer arm of Alibaba Corp., the country's largest e-commerce retailer, often called the Ebay of China. The P&G section of the site, which launched in April 2009, is operated by one of P&G's largest customers in China, the Beijing Yishang Yujie Trading Co.
Many of the products are sold slightly below the normal retail price, said Charles Zhang, a P&G spokesman at the company's greater China headquarters in Guangzhou. "Pricing of P&G products, both online and in traditional stores, is at the sole discretion of the retailers," he said.
Since the products offered on Taobao are often in bundled packs, discounts encourage multi-brand and larger purchases, he said. "The discount range offered on Taobao is similar to that in many offline stores."
P&G's brick-and-mortar retail sites in China include supermarkets, department stores, drugstores, and cosmetics stores. P&G is China's largest advertiser, spending over $1 billion on media in the mainland each year, according to Ad Age estimates.
China is one of the first countries where P&G is introducing e-commerce retailing. The marketer has stepped up its global emphasis on digital marketing since Marc Pritchard became global marketing officer last year.
Even as Procter & Gamble Co. cut measured U.S. media spending 18% overall in the first quarter, for example, the company more than doubled spending on internet display ads, according to data from TNS Media Intelligence.
The U.S. consumer goods giant is looking at e-commerce elsewhere on a "market-by-market basis, depending on the local markets' situation and consumer needs. For P&G as a whole, e-stores are new," Mr. Zhang said.
"We are in an experimentation stage globally. We realize the fact that e-commerce is developing rapidly in China, bringing changes to consumer daily life and changing product sales dynamics [and] work closely with customers in sales channel innovation, both online and offline."
P&G has also turned to digital media in China, creating local-language web sites for its products and using online media for branded entertainment. For example, P&G sponsors about two dozen lifestyle and fashion IPTV channels operated by Shanghai Media Group (SMG), China's second largest broadcaster after CCTV. Each channel is programmed with a specific P&G brand and its target market in mind. Brand include Olay, Whispers, Vidal Sassoon, Head & Shoulders, Pantene, Gillette, and Herbal Essences.
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