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Barbie In China Writ Large.

By Dan Harris and Steve Dickinson

Many years ago, my youngest daughter, now 11, would email the same-aged daughter of a Chinese lawyer with whom I had worked on a couple of cases and with whom I had become friends. What always amazed me about the correspondence (emails sent to my daughter were translated into English by the Chinese lawyer) between the two girls was how amazingly similar their lives were. Both listed spaghetti as their favorite food, though the Chinese girl was far more impressed by McDonalds than was my daughter. Both loved the social life at school but did not particularly like anything else about it. Both were taking music lessons. Both were doing gymnastics. And both thought Barbie was the coolest thing since....well....since Barbie. I thought of these emails today after reading the China Herald's recent post, entitled, "One-child policy supports Barbie - Shaun Rein." The post links over to a CBS New interview with China market guru Shaun Rein, where Shaun talks about how China's one child policy could be so favorable for Barbie's China sales. One big difference between the Barbies my daughter had and those of her email pal is that my daughter's were nearly all handed down from her mother, her sister, and from friends, whereas, the Chinese girl had to go out and buy each of hers. Becuase Barbie is so relatively new to China, in terms of demand, hand me downs, and even image, it will probably take a while for it to develop a nationwide cachet among 6-9 year old females, as it has in the United States. (My daughter would probably kill me if I do not note that she ceased playing with Barbies years ago -- right about the same time she ceased "playing" with friends and began "hanging out" with them). But this newness also means Barbie might have marketing opportunities in China that it does not have in the US. The CBS news clip talks of how Mattel is seeking to market Barbie in China not just to young kids, but to twenty-something women as well. The new Barbie Store in Shanghai even serves a Barbietini, and though I confess to not knowing (or caring) what goes into it, I am betting it is pink. I find it fascinating how Western products can be marketed anew in China. Examples of this abound. My firm has a client that makes equipment that in turn makes a very high tech computer product. Bear with me here as I essentially make up the numbers (as I have long forgotten the real ones) to make a point. The client's machine is outdated and nobody buys it in the United States any more. The cost to our client to make the machine is about $100,000 and the client sells it for $200,000. Its "competitors" make a $1,000,000 machine and that is what Americans buy. In China, however, there are still a whole slew of companies that need this machine but cannot afford the $1,000,000 version. Those Chinese companies are our client's customers. Our client has virtually no competition at their price level and it almost certainly never will because it would cost another company too much upfront money to warrant making this outdated equipment. Our client has a lock on this ultra-niche market until such time as all Chinese companies can afford the $1,000,000 machine or until used $1,000,000 machines become readily available at a substantially lower price. For more on old time US products being resurrected in China, check out "China's Resurrection Of The Tang -- Long Shelf Life Is Key."

Full post as published by China Law Blog on March 12, 2009 (boomark / email).