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James Song General Manager of MarketingMengniu Dairy (Group) Co
Feb. 24, 2014
The Changing Landscape of China’s Dairy Industry
About Me
• 1990-1996 Harbin Institute of Technology majored in Applied Chemistry with Master degree
and minored in Business Administration
• 1996-2007 Procter & Gamble (China) Co. Ltd., Product Manager, Section Head
• 2007-2010 Nestle Co. Ltd. , Business and Brand Development Manager
• 2010-2013 Ariston Thermo (China) Co. Ltd, Marketing & Sales Director
• 2013- present Mengniu Dairy (Group) Co. Ltd, Marketing General Manager
Dairy in China
Defending milk Demand diversification Digitalization Deficiency of raw milk
Defend Milk
Milk Safety issue
Is always a focus of the media
and the public around the
world.
Pause & Recharge Spoil Delight Provide Satisfy Fill Nourish Good For Refresh
Simple convenient meals Fill
Easy Simple Health
Creative inspiration to impress
Straightforward
balanced family meals
Pause & Recharge
Indulge
Positive Health
Celebration
Satisfying and
nutritious goodness
Pause & Recharge Indulge Impress Provide Satisfy Fill Nourish Good For Celebration
Stressed & Struggling
Young Path Finders
Life Jugglers
Optimistic Experience Seekers
Settled traditionalists
Foodie Idealists
Health Controllers
Demand Diversity
Young girls spent 10 minutes taking food photos, making boyfriends hungry to tears
DigitalizationThe Internet has totally changed
consumer behavior and experience.
Deficiency of raw milk
The insufficiency of raw milk supply is forcing dairy companies to explore disruptive innovation aggressively
Every day
more than 70 million consumers and 5
million students drink Mengniu products
Mengniu: largest UHT milk provider
Established in 1999
Stepped into World Dairy Top 20 in 2008
The 15th in 2013
One of the world's fastest-growing dairy enterprises
High penetration in China
One Mengniu sale outlet
serves 810 Chinese consumers
• Value: to provide nutritious and healthy food to meet consumers’
diversified needs with strong innovative capability
• Vision: to forge an eco-system with consumers, employees, investors and
all related parties and grow together
Mengniu’s Value and Vision
Expanding platform
Positive cycle in capital market
– Market value of Mengniu in 2013: from £3.06b to £5.18b
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
61%feel their life will be better in the next 12 months
47%think their
financial situation today is better than 12 months
ago
Forward-Looking
Despite the supposed economic slowdown, consumers in China
continue to live better and better lives.
Enjoying Improved Lives
49millionChinese homes
earn middle-class incomes by 2013
More Well-Off Than Ever
The changing Chinese consumer
As a result, much has been said about how their increased
willingness to trade-up their brands across a wide slew of
product categories .
Source: McKinsey & Co. (*weighted averages for 12 categories), Ipsos China
% Agree:“Expensive Products are Better”
Main Reason for Spending Moreon Various Products (%)*
Bought new type of product
Traded up to more expensive products
Bought more frequently or in larger quantities
The Spending Habits of the ‘New Mainstream’ Consumer Trading-Up in Food/Beverage
Yes, 40%
No, 60%
Willingness to Pay forHigh Quality Food & Drinks
Doing business in China
Duplication to innovation People, people, peopleTechnology Real partnership
Get peach blossom and
be lucky quickly.
Be wealthy and get
promotion quickly.
Thanks!