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Shop Talk

Retailers, consumers and prices

February 15th, 2008

Weight Watchers expands to growing Chinese market

Posted by: Alexandria Sage
Tags: Shop Talk

china.jpg    The obesity crisis in the United States — land of milk, honey and fast food — has now gone global, and one company may stand to benefit.
    
    Weight Watchers International wants to bring its weight-loss services to China’s upwardly-mobile millions, who have embraced bad eating habits, American-style, as their pocketbooks have become increasingly middle-class.
    
    The company recently signed a joint venture deal with French food company Groupe Danone, which brings “extensive knowledge of the China marketplace and the Chinese consumer” according to a recent press release.
    
    Weight Watchers has disclosed few details about its launch into China, and declined an interview request with Reuters, but the joint venture will be 51 percent owned by the weight loss company, and 49 percent owned by Groupe Danone.
    
    A management team is already in place and retail operations are expected to begin within the next year.
    
    But Chief Executive David Kirchhoff, in an earnings call with analysts on Thursday, predicted that Weight Watchers won’t spend more than $5 million on its China plans this year.
    
    Kirchhoff, in the same call, suggested that the move to China was a calling.
    
    “Obesity is becoming a real issue in China and we have an opportunity, and I feel an obligation, to provide lifestyle-based solutions for that market,” Kirchhoff said.
    
    Pressed for details by analysts, Kirchhoff cited concerns about competition — wait..how big is this market again? — but offered a few crumbs.
    
    “I would say the concept we’re focusing on on would most closely resemble the primary business we’re in, which is helping people lose weight, as opposed to having a primary focus on licensed products,” he said.

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