American Businesses Booming in China

PHOTO Two McDonald?s delivery workers are shown in Shanghai, China, Nov. 15, 2010.
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Mary Kay, the classic American makeup company, took its pink hats and pink Buicks 7,000 miles to China -- and after 15 years of trial and error, business is booming there.

Nearly 20 percent of the company's business now comes from China, said K.K. Chua, president of Mary Kay's Asia Pacific region.

"We're just scratching the surface in China right now considering that China is a country with more than 1.4 billion people," Chua said. "I think in the time to come, we will see the business having a lot more lengths to run."

When the Texas-based company gathers a few of its Chinese salespeople for a pep talk, a few means 40,000 members of the country's half-million-person Mary Kay workforce.

Mary Kay's success in China meant shifting from their well-known model of paying home visits to setting up "beauty centers."

"When we bring the products across to China, we must do some adaptation," Chua said. "First, it has to do with packaging, we have to stream the packaging down because everybody is used to smaller packaging."

Another big lesson for the company was that Chinese women don't want to be more tanned. They want their creams to make them whiter.

The company created specific products that appealed to Chinese women. Some of those newly formed serums have become surprise hits in the United States, too.

"It's a pretty ironic phenomenon that something that's developed in the East is now suitable in the West," Chua said. "Now, in Mary Kay, there is a saying that East does equate [to] West."

U.S. Companies' Growth in China Good for U.S. Workers

Mary Kay is one of several big American brands finding their way to Chinese consumers. Because the Chinese do like American brands and American know-how, everything from our architects to management experts, there is a shot at vast amounts of money and benefit to American stockholders.

The boom in consumption by American consumers could be good for American workers too.

One estimate suggests that a 20 percent rise in Chinese consumption theoretically could lead to an extra $25 billion of American exports, creating more than 200,000 American jobs.

McDonald's and the Rice Burger

Another major American brand making big waves in China is McDonald's. The company has spent 20 years working in the country and now opens a new location every other day.

Tim Fenton, the president of McDonald's Asia-Pacific, Middle East and Africa division, said that the company had to experiment with food until getting it right.

One of the company's biggest blunders when it arrived in China was the rice burger.

"They didn't buy it," Fenton said. "People come to McDonald's for what we are. They don't want to come to us for rice."

The biggest seller is a crunchy chicken sandwich that is super spicy, probably too spicy for most American palettes. An alternative to McDonald's famous french fries is steamed corn in a cup. Instead of the fast food chain's apple pie, the Chinese like taro pie, which tastes like a chopped potato in gooey, sweet syrup.

McDonald's uses only food grown by Chinese farmers and hires 66,000 employees making wages much lower than workers in the U.S. but still on par with China's average salary of $2,600. A manager at a McDonald's in China makes nearly triple the average salary.

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