Riding the wave of consumption-led growth

Jebsen Group— a conglomerate with a rich business portfolio ranging from beer to car components — believes the Chinese government’s initiatives in boosting the consumption-led and services-led economy, as well as the urbanization and growth of the middle class, are giving it real growth opportunities.

A private marketing and distribution company established in 1895 with more than 120 years of continuous presence in China, these days Jebsen represents more than 200 leading brands across various industries. The group employs more than 2,300 people and is headquartered in Hong Kong, with nine additional offices in the Chinese mainland, Taiwan andMacao.

In 2015, the conglomerate reorganized and optimized its business structure. Under the unified master brand of Jebsen, the group has four strategic business units including Jebsen Consumer, Jebsen Beverage, Jebsen Industrial and JebsenMotors.

The strategy shift appears to have paid off, with the group last year posting revenues of HK$13.3 billion ($1.71 billion) and net taxed profit up 5 percent from a year ago. The group’s revenue has already tripled over the last 10 years.

Group Managing Director Helmuth Henning shared his perspectives on how Jebsen Group could drive further business growth amid the slowing down of the Chinese economy. The following are edited excerpts of an interview withHennig:

How can China’s economic changes, from being investmentand infrastructure-led to being consumption and services-oriented, create business opportunities?

Although Chinese economic growth is slowing, it is still at a reasonably high level and China’s GDP growth in 2016 reached 6.7 percent. If you look at the upper segment of the middle class in China, this segment of the population is actually growing and has higher disposable incomes. They still have the desire to spend money.

How will the business units of Jebsen Group respond to the new business environment?

We strive to offer quality brands that can add to the lifestyle of the middle class. We offer upper premium products targeting the middle class, and these products are not mass produced or mainstream consumer products. Even though the market itselfmay not grow quickly at the end of the day, if you look at specific market segments that we are in, we still have significant growth.

Urbanization, aging population and the rise of middle class: how do these phenomena positively contribute to the group’s business?

All these allow us to be confident that our consumer business will grow quite significantly over the next few years. Retail sales in China are slowing, but in major Tier 1 and Tier 2 cities, people want to buy quality products rather than products in large quantity.

Chinese consumers have much more understanding of brands because of the information flow from the internet. They are very willing to look through the internet to search for products. We have built our own platforms in both Hong Kong and the Chinese mainland. In the mainland we also partner with other platforms, such as Tmall, to offer high quality electronic and lifestyle products.

More Chinese nationals are traveling overseas and they look at brands from a Chinese as well as a global perspective. This all opens up opportunities for brands that we work with. They are brands imported into China, which we try to establish in the market place.

How can Jebsen Beverage cater to the needs of the Chinese middle class?

In the wine business, we’ve built up our portfolio of business by focusing on a balance of agency brands and selfowned brands. Wines sell very well in the Chinese market and we work with the brands to sell their products in the country.

We’ve also developed Jebsen Wine Estates, to produce our own product ranges, after acquiring wineries in Australia, New Zealand, South Africa and South America. We’ve created more direct interaction with customers and inform them through our wine product catalogue.

Onthe beer product side, we have our self-owned brands such as Blue Girl Beer and Sonderberg Beer. We are looking

ROY LIU / CHINA DAILY Helmuth Henning, managing director of Jebsen Group.