Economy

Disposable Economics: Why France's Bic Is Hotter Than Louis Vuitton

Ignite those profits
Ignite those profits
Denis Cosnard

PARIS – The future of the “Made in France” label doesn’t just hinge on Champagne, Airbus or luxury handbags.

The Bic company’s annual report, released on Feb. 13, proves it – it’s possible to make a good living in the West with an alternative economic model based on mass-produced cheap products.

The company still makes its disposable lighters in Redon (western France), its ballpoint pens in Montevrain (east of Paris) and shaving razors in Longueil-Sainte-Marie (north of Paris). In total, 21 of its 23 main factories are located in developed countries. This choice not to outsource hasn’t hindered profits.

Despite a difficult fourth quarter, the group made a 263 million euro net profit in 2012 – an 11% increase and an unprecedented profit. The turnover progressed by 4% to 1.9 billion euros.

What’s most striking is that the operating margin reached a whopping 19.5% of sales – 38% just for the lighters. “This is comparable to Vuitton,” says Cédric Rossi, an analyst at Bryan Garnier & Co investment bank. The lighters alone account for 56% of the company’s profit.

The only things that don’t sell very well are the mugs, ashtrays and other promotional materials. This branch, on which the company concentrated its efforts these last few years, remains weak.

Progression on the stock market has been impressive: share value increased by 75% in three years. At the beginning of this month, it reached 100 euros for the first time.

“Obsessed with quality”

Bruno Bich, son of Bic founder and chairman of the board of the group for the past 20 years, isn’t expecting to be challenged at the next general assembly, in May. The 66-year-old’s mandate should be renewed yet again. Mexican Mario Guevara should also stay on as CEO. The result of the vote is no mystery since the Bich family owns 43% of the capital and 57% of the voting rights.

“We provide excellent-quality products at low prices,” says Bruno Bich. “In the context of an economic crisis, this is what people want.”

Bic’s shaving razors, for instance, are 40% cheaper than Gillette and Schick razors, which are more upscale. In the last three years, the French company has been gaining ground on its rivals. “The only risk now is that these rivals hit back more aggressively,” say analysts from Baden Hill.

According to Bic, the challenge is to keep the same low prices while maintaining innovation, without sacrificing profit margins. “The secret is: do the opposite of what the majority of your competitors are doing. While many rely on subcontractors, Bic essentially operates in house,” explains Cédric Rossi. Keeping the whole production in house enables savings on plastics orders, for instance.

“We design our machines and molds ourselves. We are obsessed with quality,” says Bich. “The result is that Chinese lighters can be used 800 times while ours can be used 3000 times,” he adds. So much so that the company believes it will keep its share of the European market, despite the recent cancellation of antidumping duties on Chinese lighters.

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Society

Chinese Students Now Required To Learn To Think Like Xi Jinping

'Xi Jinping Thought' ideas on socialism have been spreading across the country since 2017. But now, Beijing is going one step further by making them part of the curriculum, from the elementary level all the way up to university.

Children from Congtai Elementary School, Handan City, Hebei Province

Maximilian Kalkhof

BEIJING — It's important to strengthen the "determination to listen to and follow the party." Also, teaching materials should "cultivate patriotic feelings." So say the new guidelines issued by the Chinese Ministry of Education.

The goal is to help Chinese students develop more "Marxist beliefs," and for that, the government wants its national curriculum to include "Xi Jinping Thought," the ideas, namely, of China's current leader.


Xi Jinping has been the head of the Chinese Communist Party (CCP) for almost 10 years. In 2017, at a party convention, he presented a doctrine in the most riveting of party prose: "Xi Jinping's ideas of socialism with Chinese characteristics in the new age."

Behind this word jam is a plan to consolidate the power of the nation, the party and Xi himself. In other words, to make China great again!

Communist curriculum replaces global subjects

This doctrine has sent shockwaves through China since 2017. It's been echoed in newspapers, on TV, and screamed from posters and banners hung in many cities. But now, the People's Republic is going one step further: It's bringing "Xi Jinping Thought" into the schools.

Starting in September, the country's 300 million students have had to study the doctrine, from elementary school into university. And in some cities, even that doesn't seem to be enough. Shanghai announced that its students from third to fifth grade would only take final exams in mathematics and Chinese, de facto deleting English as an examination subject. Beijing, in the meantime, announced that it would ban the use of unauthorized foreign textbooks in elementary and middle schools.

But how does a country that enchants its youth with socialist ideology and personality cults rise to become a world power? Isn't giving up English as a global language the quickest way into isolation?

The educational reform comes at a time when Beijing is brutally disciplining many areas of public life, from tech giants to the entertainment industry. It has made it difficult for Chinese technology companies to go public abroad, and some media have reported that a blanket ban on IPOs in the United States is on the cards in the next few years.

photo of books on a book shelf

Books about Xi-Jinping at the 2021 Hong Kong Book Fair

Alex Chan Tsz Yuk/SOPA Images/ZUMA

— Photo:

Targeting pop culture

The regime is also taking massive action against the entertainment industry. Popstar Kris Wu was arrested on charges of rape. Movies and TV series starring actor Zhao Wei have started to disappear from Chinese streaming platforms. The reason is unclear.

What the developments do show is that China is attempting to decouple from the West with increasing insistence. Beijing wants to protect its youth from Western excesses, from celebrity worship, super wealth and moral decline.

A nationalist blogger recently called for a "profound change in the economy, finance, culture and politics," a "revolution" and a "return from the capitalists to the masses." Party media shared the text on their websites. It appears the analysis caused more than a few nods in the party headquarters.

Dictatorships are always afraid of pluralism.

Caspar Welbergen, managing director of the Education Network China, an initiative that aims to intensify school exchanges between Germany and China, says that against this background, the curriculum reform is not surprising.

"The emphasis on 'Xi Jinping Thought' is being used in all areas of society," he says. "It is almost logical that China is now also using it in the education system."

Needless to say, the doctrine doesn't make student exchanges with China any easier.

Dictatorships are always afraid of color, pluralism and independent thinking citizens. And yet, Kristin Kupfer, a Sinology professor at the University of Trier, suggests that ideologically charged school lessons should not be interpreted necessarily as a sign of weakness of the CCP.

From the point of view of a totalitarian regime, she explains, this can also be interpreted as a signal of strength. "It remains to be seen whether the Chinese leadership can implement this so thoroughly," Kupfer adds. "Initial reactions from teachers and parents on social media show that such a widespread attempt to control opinion has raised fears and discontent in the population."

Die Welt
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