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Deemphasizing Expatriates

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Do You Agree with Wang's Deemphasizing sales to Beijing's Expatriate community? In a period where competition in China's ice cream sector is turning red hot as market players unveil bold expansion plans and target the expatriate community, Beijing Carvel has taken the opposite approach. Group three disagrees with Beijing Carvel's decision to deemphasize expats. Latest figures from the Ministry of Labor and Social Security show about 150,000 foreigners working in China, a rise from 120,000 in 2005 (Catering for expatriates). Combined expenditures of expats in China is estimated at 10.8 billion yuan (US$1.35 billion) to 16.2 billion yuan (US$2.03 billion) (Catering for expatriates). Expats are diverse, so the market is vast and the profit potential is unlimited. Ice cream and yogurt are the two most lucrative sectors in the dairy industry and has developed an annual growth rate of about 105% since 1987 (Walls China Ice). Statistics indicate the annual consumption of ice cream is one liter per capita in China (Walls China Ice). Easy storage of ice cream makes it easier for firms to enlarge their presence in the expat customer segment. Nestle has kicked off its marketing campaign with 20 new ice cream products in Beijing. Expats spend one-fourth of their salaries on luxuries such as shopping and eating (Ice Cream Brands). Most expats in Beijing are highly paid senior executives and professionals transferred by their employers to China. Most enjoy generous pay packages, which include subsidized housing, education for children and transport, so spending money is not a problem. Expatriate salaries are higher in Beijing than most Asian countries. A high level executive expatriates earns between 4,000 to 6,000 USD a month (Nestle to Expand). Due to the popularity of China to expats, ice cream companies can afford to expand and take more chances.

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