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Shanghai Jahwa to phase out its weaker personal care lines

By Michelle Yeomans , 06-Dec-2012
Last updated on 03-May-2013 at 11:18 GMT

The Chinese cosmetic company has announced it plans to concentrate on three of its 'super-brands' whilst phasing out its' weaker lines, in a bid to focus on its growth potential in the domestic and international markets.

State run Jahwa is most known for its’ men's grooming range ‘GF’ and Herborist natural hair and skin care line, however it is yet to be offically confirmed as to what the company considers to be its weakest brands.

The move to phase out some of its' lines is part of the Shanghai based company’s long term goals to focus more on investing in marketing and other areas of cosmetics where it believes multinationals are dominating.

With Euromonitor forecasting total sales of the Chinese cosmetics market to reach Rmb 84bn by 2014, the market researcher estimates that Jahwa has a 1.6 per cent stake in the China cosmetics industry, a share that is expected to grow to around 58 per cent by 2015, growth that will place the company alongside some of the biggest international players.

International expansion goals

Prior to this decision to phase out it's weaker brands, Jahwa announced back in February of this year that it was selling assets of nearly €550m so that it could invest in the international luxury cosmetics market, a stake in which insurance giant Ping An bought in to.

In regards to that move chairman Ge Wenyao had then told the Financial Times that; "Chinese state-owned companies have very poor management skills.”

The government cannot do a good job helping state-owned companies compete in the cosmetic market, so they make the company fully private to better compete,” he further explained.

Partnering up..

In a bid to continue to increase its international footprint, Jahwa also recently teamed up with UK cosmetics and toiletries manufacturer Swallowfield in order to gain access to the European markets.

The Joint Venture Company (JVC) is said to have given the personal care company new sales opportunities on the continent as well as expanding its global presence and strengthening margins.

"Above all the joint venture agreement is part of our ongoing strategy to increase revenues by being a global provider to the international cosmetics and toiletries sector."

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