economy - The shampoo wars continued

When Poctor&Gamble and Unilever start to talk about their operation in China, like here Laurent Philippe does at the McKinsey Quarterly, they can be sure they will have my attention. Five years ago I compared for the magazine Asiaweek the profitability of both companies after Unilever had announced they would open up for the media.
P&G never promised that, the openness of Unilever was very shortlived, so I had to collect evidence from cooperative retailers, suppliers and actually went out to stores to measure up the length of the shampoo displays in Shanghai supermarkets.
The conclusion was that P&G was making some profit since a few years, while Unilever was losing money. Both were in China since the second half of the 1980s, so the magic mantra that foreign companies were in China for the long term, got for me closely associated with losing much money.
Unilever was up in arms, flew in PR-consultants from all over the world in an effort to kill, what they feared, a flood of other articles about the same subject. I did not have that intention, so I enjoyed nice lunches and rather unexpected level of attention from a company that had ignored me just weeks earlier. A few years later P&G lost its advantage and also lost money again.
It made me very sensitive for the way how both companies answer when the question about profitability comes up. Also in the McKinsey piece the familiar high-end corporate bullshitting was easy to find. Philippe says:

Our profitability in China today is comparable to the company average. With developing markets—and China, in particular—becoming an increasingly important part of the company's total operations, our shareholders would not accept a dilution of its financial performance. It is a financial imperative to continue delivering superior returns to our shareholders.... We have set adequate, definable profit objectives for ourselves and believe that from both a strategic and an organizational focus this is the best way to take on the cost challenge involved in serving the midtier consumer segment in China. Tough profit objectives force you to get your cost structure competitive.

Translation: We do not make a profit, despite competitive targets.
There is nothing wrong with that: tough domestic competition, piracy, expensive expats, high marketing costs: China is just a very difficult market.
Of course, you cannot expect McKinsey Quarterly to ask the same critical questions I could ask for the now defunct Asiaweek. But they should have asked about the SK-II skin cream scandal that has hit the company's trust among Chinese consumers. Even McKinsey has to watch their reputation when they sell fried air.