Procter & Gamble Global CEO Mai Bo Bo Responded To The Price Increase Rumors: Do Not Rule Out Price Increases

In response to the rumors of rising prices, the different strategies of Unilever and Procter & Gamble have completely different results.

China's national development and Reform Commission announced in May 6th that Unilever Chinese companies had repeatedly spread price information to disrupt price order, and Shanghai's Price Bureau imposed a fine of 2 million yuan.

The world's largest consumer company Procter & Gamble, who has not yet commented, escaped.

In the afternoon of the eastern time of the United States, in May 5th, the president and CEO of Procter & Gamble, Mai Rui Bo, interviewed in New York's twenty-first Century economic report, for the first time responded to the rise in product prices.

"If Procter & Gamble products price rises," we will not make any comments before, "Mai Rui Bo said.

He said Procter & Gamble focused on dialogue and communication with the Chinese government. P & G's business in China has also been strongly supported. "At least I have not received any phone calls to prohibit price rises".

The recent rise in global commodity prices has led to less than 1% of Procter & Gamble's growth in developed countries in the first quarter of this year, far below the growth of 8% in emerging markets.

In response to the threat of inflation, P & G has raised the price of some US products by the end of last month.

"Price increase is the last option."

Before the price rises, "if there is no choice, we will not rule out the price rise, but we will try every other way," Mai Rui Bo said.

"We do not rule out price increases".

Twenty-first Century: after a number of Chinese media reports, China's supermarkets have received notice of price rise from a number of daily chemical companies such as Procter & Gamble and Unilever, and P & G has no official response yet.

What do you think of this?

Mai Ruibo: I think you are talking about Unilever's announcement of the rise in product prices.

Twenty-first Century: there are Unilever and P & G companies in the report.

Mai Rubo: we will not make any comments before we really implement the product price increase. We will not make such a comment.

Twenty-first Century: prices of labor, raw materials and other almost all production costs have risen in China. How does P & G adjust its operation strategy in China?

Mai Rui Bo: we intend to continue to grow in China, and business in China will definitely continue to grow.

We are China's largest daily consumer company, with annual sales of US $5 billion, 4 times the size of our strongest competitors.

We have 7000 employees in China, and we are continuing to invest.

We must ensure that the supply mechanism is close enough to the consumer market.

It is impossible for us to make baby paper in other parts of the world and put it into Chinese market to make profits. This will not change.

{page_break}

Twenty-first Century:

Mai Rui Bo: now it seems that inflation is still under control in the world, and the demand side is still on the sidelines.

That's why the stock market has been fluctuating, but the economy has indeed begun to recover.

Price volatility is never a good thing.

For enterprises, we must carefully consider how to maximize the use of nearly $2 billion in R & D funding.

We can take material substitution, simplify materials, reduce internal bureaucracy levels, manage digitalization to reduce costs, and enable enterprises to flexibly cope with all kinds of changes.

Enterprise flexibility and innovation will eventually turn into productivity.

In the absence of choice, we do not rule out price rises.

But before that, we will try every other way.

China or India will replace the United States.

P & G Global

Twenty-first Century: you have set a plan to increase 1 billion consumers in the next five years. What is the position of the Chinese market in the plan?

Mai Ruibo: at present, our annual sales in China are US $5 billion.

We are working with the Chinese government to "market projects of thousands of villages and thousands of townships" so that our products can be supplied in remote areas.

These consumers from rural China will become our main target customers in the future.

In addition, we plan to increase brand input to China.

Although we are already the largest daily consumer company in China and far ahead of other competitors, P & G has 38 categories of products in the world, and there are only 15 major categories in China.

Increasing brand input requires the combination of market maturity and innovation, and must suit measures to local conditions.

For example, East Asian hair is two times the radius of the white Americans. This means that the surface of your hair is 6 times more than that of the whites, and the amount of hair conditioner needed is quite high.

So if you are an Asian living in New York, you may not buy PANTENE products for your hair care requirements.

If you are a white person living in China, you will feel that you are overdosing.

Twenty-first Century: do you think China will become the largest market of P & G in the near future?

Mai Ruibo: at present, China is the second largest market for P & G, but compared with the United States in the first place, the gap is still obvious.

I think China or India will become the largest market of P & G in a certain period.

P & G's market size is usually proportional to the population size, and China and India are much larger than the US. So the biggest market is inevitable. It's just how we want to win these consumers.