>> Beijing and Washington may be sinking into a trade war, but American brands in China are already fighting a battle with local rivals. In a recent survey, names like Colgate toothpaste or Pampers have lost 10% of the market to local rivals in the last half decade. For a long time, everything American from fast food to baby formula and blue jeans had enjoyed top-tier status.
But China's pushing to boost local brands by creating champions and weeding out weaker players. The electric vehicle market has seen a surge of competition thanks to a state-backed effort. And not only does the home team usually have Beijing's blessing, they can be faster to adapt as Reuters Adam Jordan explains.
>> We see smaller Chinese brands, they're really coming to the fore and challenging these big global names, your Starbucks or your Apples or other consumer brands and chipping away at their market share. Now someone like Starbucks, for example, whose been so dominant here in China, they are now facing a growing wave of trendy smaller coffee shops.
They came out recently and said that after a period of really strong growth, they were now expecting to see flat or even potentially negative growth in the second quarter of 2018.>> More tit for tat on the trade front between US and China may not help either. It could lead to some sort of consumer blow back.
>> An analysis we did of US companies that are listed in breakout their China sales showed at least a $180 billion in sales in the last financial year. If things really do descend and the tensions grow even further and Trump gets increasingly aggressive against China, we are likely to see these brands facing an even greater threat.
Compounded by the fact that local rivals are getting stronger every day.>> It's not all bad news, some companies are bucking the trend. Oreo has a strong presence in China and now that Coca Cola and Pepsi are marketing healthier drinks, they've seen a comeback after years of decline.