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　　 　　According to the statistical data made by CVSource under ChinaVenture, there are 37 daily product makers in China receiving the total investment of 377 million U.S. dollars from VC/PE institutions. The financing amount of each deal is about 10.19 million U.S. dollars.
　　But judged from the market share of daily product manufacturers in China, foreign brands represented by Unilever, Procter & Gamble (P&G), Loreal and Johnson & Johnson (J&J) have dominant advantages in the market while local brands are far behind foreign brands in market share and revenue because of their late start, behindhand research and development ability and inferior brand images.
　　The analysis from ChinaVenture reported that Unilever, P&G and J&J mainly set up their product distribution channels in the supermarkets and shopping malls of first- and second-tier cities of China. Though they have taken the dominant place in the Chinese cosmetic market, they are still less developed in the third- and fourth-tier markets. In comparison, local companies which have lost to foreign brands in the major cities of China turn their focus to the less important cities and rural markets, which is the key for them to turn around the situation and fight against foreign brands.
　　 Domestic Market Monopolized by Foreign Giants
　　According to the data of market share in the domestic daily product market, Unilever, P&G and J&J have touched a more diversified category of products than domestic makers. Their products mainly target middle- and highend users. They are clearly positioned for segmented market by establishing different brands in the same field. In recent years, these foreign giants put more investment into the advertising and marketing through TV series and movies. With so many maneuvers, they have taken the dominant place along with certain bargaining ability in the first- and second-tier cities. In comparison, local brands, which started development later, have comparatively behindhand research and development ability and inferior brand image to their foreign counterparts. Therefore, they have no way but to take low-price strategies to increase their presence in the middle- and low-end markets. Apart from a rather small number of domestic daily product brands like Blue Moon and Kaimi in the hand-washing solution market or Libai and Cnnice in the soap and scour markets. The other segmented markets, such as shampoo, hair conditioner and body wash, can not witness domestic participants match foreign companies in both market share and brand awareness.
　　As for the cosmetic market, the high-end brands in China are mainly from Loreal, Estee Lauder, Shiseido, LVMH and Amore. These brands are mainly related with facial skincare, skincare, makeup and perfume. They have already extended their distribution arms long enough to cover shopping malls and cosmetics exclusive stores in the first- and second-tier cities of China. With the increasing sales of cosmetics in China, the product price is increasing year by year. Shanghai Jahwa, as the only remaining leading and independent local cosmetic maker, are still far behind foreign giants in market share and corporate revenue even though it has a portfolio of known brands like Herborist, Chinfie, Maxam and so on.
　　
　　 The Great Amount of Raised Funds
　　As ChinaVenture’s data shows, 37 daily product makers in China received the investment from VC/PE institutions amounting to 377 million U.S. dollars.
　　Unfortunately, Chinese domestic companies are still surpassed by foreign companies in that field. This is mainly reflected in their slow pace of going public. By June 2012, only 12 Chinese domestic daily product companies have gone public, which are Sanjiang Chemical, Frog Prince and Shanghai Jahwa, etc. 4 of them are listed in the yuandenominated A-share market while the others went public in Hong Kong or other stock exchange markets. As for the companies that are going to be listed in the future, only Shanghai-based Inoherb can bee seen in the list of waiting.
　　 Rely on Policies to Fight against Foreign Giants
　　In recent years, the fast development of local economy determines that enterprises of daily chemical products are mainly located in the Yangtze River Delta and Pearl River Delta, based on which two industrial clusters are formed. Many domestic enterprises got strong development. Shanghai Jahwa, Zhejiang-based Cnnice and Guangzhou Lonkey.
　　The data from the National Bureau of Statistics shows that the daily product manufacturers above the average size in China realized the sales amount of 427.54 billion yuan from January to November 2011, up 23.77% from the previous year. The profit amounted to 31.647 billion yuan, up 13.77% year on year.
　　According to the national standard, the daily products can be divided into soap, synthetic detergent, cosmetics, oral cleaning stuff, spicery and so on. As people’s concepts about living are updated continuously and the living level is continuously improved, they have increasing demand for high-quality and big-quantity daily chemical products. The female consumers particularly have a higher demand for middle- and high-end cosmetics. These all bring about great opportunities for the participants in China’s domestic daily product industry.
　　The Chinese Association of Spicery, Essence and Cosmetics published the 12th Five-year Plan of the cosmetics industry recently, planning to foster 2-3 brands with international brand awareness and competitive power. The number of “Chinese brands” will be increased to 20 and the number of “well-known brands” will be increased to 30. Efforts should be made to maintain the stable growth rate in the industry. The sales amount will be increased at 9% or so every year and will be up to 230 billion yuan in 2015. The industrial support will be of great importance for the development of Chinese cosmetics industry.
　　The analyst from ChinaVenture said that the Top 3 foreign giants – Unilever, P&G and J&J mainly spread their distribution network in the first- and secondtier cities. Though they have unparalleled advantages in China, they are still weak in the distribution in the third- and fourthtier cities. Therefore, local companies, which lost to foreign giants in Shanghai and Beijing, can make use of the aforementioned policies to expand their presence in the lesser cities and rural markets, which are the key to their turnaround of the situation and fighting against foreign brands.

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