China Food

Nestle e-commerce in China, coffee, espresso and infant nutrition four big boss together!

For Nestle, the world’s largest food company, this year’s Fair is still the stage for hundreds of products from all over the world to “appear on the stage”.

In particular, for the first time, we had the opportunity to have in-depth exchanges with the directors of Nestle’s core businesses in China, including the e-commerce that helped the group’s performance growth under the epidemic situation, the coffee business with the fastest growth in the home scene, and the infant and child nutrition business, which Nestle attaches great importance to.

Next, let’s get close to Nestle.

E-commerce: the “accelerator” of growth and innovation

In the three quarterly reports released earlier by Nestle, the group’s e-commerce sales increased by 47.6%, accounting for 12.3% of total sales. China’s e-commerce, as the “outstanding student” of global e-commerce, has a stronger growth trend.

“If all categories are included, China’s e-commerce business should grow by more than 30% – 35% this year. The proportion of e-commerce has exceeded 20%, about 78% higher than last year. Before that, e-commerce basically maintained an annual growth rate of 20% – 30% Wang Lei, vice president of e-commerce in Greater China of Nestle (China), told the snack agent yesterday.

Wang Lei (third from the right), vice president of e-commerce of Nestle (China)

According to the data, Wang Lei, who joined nestle in 2011 and established and led the entire Nestle e-commerce business in China, previously worked in P & G for more than 10 years, responsible for digital marketing, consumer relationship management and e-commerce.

She said that in the field of e-commerce, the growth of three categories is particularly obvious: various categories of coffee, adult milk powder and other nutritional products and leisure snacks. Some categories that quickly switch to the “home” scene have achieved a year-on-year growth of more than 60% – 70%, or even doubled.

“The epidemic is undoubtedly an acceleration of e-commerce business, but it is also a test of e-commerce infrastructure and enterprise digital capability.” Wang Lei further explained that for Nestle China, e-commerce is not only a simple channel, but also plays an important role in growth and innovation.

First of all, Nestle will launch new products and brands for different consumer groups in the E-Commerce Association, firmly grasp the explosive growth trend of online shopping in recent years, so as to promote business growth. Under the background that this year’s epidemic has a certain impact on outdoor scenes or offline retail channels, the growth of e-commerce business is more obvious.

According to Wang Lei, the development of e-commerce in China is faster than that in other countries and regions, thanks to the joint promotion of the whole domestic e-commerce ecosystem, including supply chain, logistics, content service providers and live broadcast service providers.

Secondly, whether it is through observation and Research on big data at the consumer end, or through short video and live broadcast, interactive communication with consumers is an innovation completed in the context of e-commerce. On the channel side, the innovation is manifested in that the early e-commerce has also been iterated into o2o and other new retail modes.

Nestle health science’s new high-end low-sensitivity dietary supplement brand pure capsules

“The process of innovation is from comparative front-end consumer insight, consumer communication to channels, to supply chain and more upstream manufacturing links, product innovation and R & D, so as to realize digitalization at the manufacturing level.” Wang Lei pointed out that this is the significance of e-commerce to the company in the field of innovation.

In order to make the insights from consumption big data visible in the supply chain and manufacturing end, Nestle China has also increased investment in building a more comprehensive digital strategy, including building a data center.

Coffee: providing products for consumers at different stages

Under the background of this year’s epidemic haze covering the global market, coffee has become one of Nestle’s categories to promote the group’s rapid growth in the context of the new rising home consumption scene, and this trend is no exception in China. Interestingly, the contribution of e-commerce in China’s coffee market is significantly higher than that in other countries, reaching 50% – 55% this year.

He Wenlong, head of coffee business of Nestle Greater China (second from left)

At present, the coffee products sold by Nestle in the Chinese market have already expanded from instant coffee many years ago to ready to drink coffee, instant coffee, freshly ground coffee and capsule coffee, including the Nestle coffee family, including Starbucks home coffee, espresso coffee and Nescaf é.

“Our marketing strategy in China is to provide consumers at all stages with the right coffee products.” He Wenlong, head of Nestle’s coffee business in Greater China, said. In the past year alone, Nestle has launched more than 50 new coffee products, several times more than in previous years, and the speed of innovation is unprecedented.

He explained that a simple framework should be applied to consumers: for those who don’t drink coffee, they should be encouraged to try coffee first; for light coffee users who only drink one or two cups a week, they should be allowed to drink more coffee; for consumers who do not drink coffee every day, they should be given the habit of drinking coffee every day. “Each of our brand lines and product lines is developed for these three groups of consumers, especially the first group. I think we have the responsibility to cultivate this culture here. “

According to reports, a survey on coffee consumption this year shows that 60% of the people who drink Nestle coffee are new users, while only 30% of the old users have been drinking it. “It’s a great encouragement for us.” He Wenlong said. In order to increase its appeal to young consumers, Nestle coffee has recently launched a breakthrough innovative product, the bright series, in the Chinese market, and a limited edition of “bright coffee” has been launched in “double 11” cross-border beauty brand make up for ever. The product uses Nestle’s unique golden coffee powder, and the packaging bottle is inspired by lipstick, which is easy to carry.

But there are about 600 million people in China who have never had coffee. Even in Shanghai, a city with the highest density of coffee shops in China, the annual consumption of coffee per capita is only 70 cups, while that of other top four first tier cities is even lower, with only 35 cups. From this perspective, he Wenlong believes that the so-called competition in the coffee field is more from the competition between coffee and other drinks, rather than from the competition between coffee players at home and abroad.

However, the sudden outbreak has promoted the growth of coffee business in the home scene. “Because everyone’s locked up at home, they’re starting to drink coffee at home.” He also pointed out that this mainly refers to those who have been used to drinking coffee, rather than new consumers. The reason behind this may be that coffee is a “social product”, and a social scene is more needed in the popularization process.

Will Nestle also cut into social scenes, such as opening a coffee shop? “We have blue bottles of coffee. Nestle is no stranger to cafes. “He Wenlong said with a smile. As for when blue bottle coffee will enter the Chinese market, he described it as “under study.”.

It is understood that other new trends of coffee consumption under the epidemic situation also include the obvious growth of black coffee and the more obvious trend of high-end coffee consumption.

“Maybe people pay more attention to their health, like to buy black coffee, and add appropriate amount of sugar and milk. In addition, some coffee consumers have time to learn more coffee information at home because they have been at home for a long time, such as studying the origin of coffee beans, or what technology is used to grind coffee According to he Wenlong, although the epidemic has limited the traditional coffee social scene, the original coffee consumption group has also “upgraded”.

As for how to promote the growth of Nestle coffee business in China, he Wenlong believes that in addition to promoting coffee culture, product innovation and digital strategy, the cooperation between Nestle and Chinese farmers in the past 20 years is also the key to promoting the sustainable development of coffee business. “Nestle will bring Yunnan’s best coffee products to consumers through our products.”

Strong coffee: four strategies to accelerate the development in China

Although China’s coffee market as a whole is still in its infancy, Nestle’s Nespresso, which provides deep coffee experience, is also looking for more development opportunities.

“The coffee market in China is still very young, but it also means that we have a very big market opportunity. In particular, I found that Chinese consumers have not only improved the amount of coffee they drink, but also are looking for some special products, paying attention to the taste and aroma of coffee. ” Lin Shangming, who officially became the general manager of the Greater China region of strong encounter coffee in September, said excitedly.

Lin Shangming, general manager of great China

He told the snack generation that strong coffee has four strategic priorities in China. The first is to continue to build brand awareness. Not long ago, the brand official announced Zhao Youting, the spokesman of Chinese brand. “This is the first local spokesperson in the history of espresso, which means that we attach great importance to the Chinese market, and localization is a very important goal for us.” Lin said.

The second is to increase distribution channels. It is understood that strong encounter coffee opened tmall flagship store in 2016, and Jingdong flagship store in 2017, and the micro store also officially opened last month. Offline, it opened two new boutiques in September. Up to now, strong encounter coffee has 15 coffee boutiques in Beijing, Shanghai, Shenzhen, Guangzhou, Chengdu and Hangzhou. These boutiques not only support sales and customer service, but also serve as recycling points for coffee capsules.

In addition, strong coffee also plans to increase brand building and layout in B2B channels, including high-star hotels, high-end restaurants and large-scale offices.

In this regard, Lin Shangming explained that both retail products such as home coffee machines and products for B2B customers such as restaurants are the products that Nongyu coffee hopes to accelerate at present, because the business of these two major markets is complementary. Some consumers may come into contact with strong coffee in star hotels, and thus have the idea of buying home coffee machines. On the contrary, some consumers may want to have the same experience when consuming outside because they have coffee machines with strong coffee at home, which also gives rise to the demand of B2B customers.

Finally, espresso in China will encourage consumers to return used capsules to the company for recycling, so as to achieve sustainable development.

When talking about espresso and Nestle coffee, the other two “brothers” of Starbucks family, how to distinguish positioning and synergy between Nescaf é and espresso. Lin Shangming believes that strong coffee, which was founded in Switzerland in 1986, is unique in Nestle family. “It is different from other coffee brands or other brands of Nestle coffee family.”. The users of espresso are usually food lovers and consumers who have a unique pursuit of coffee experience and lifestyle.

He also mentioned that in the future, espresso will open more offline boutiques and “open up at least one new city next year.”.

Baby nutrition: confidence in the fourth quarter

As for Nestle’s other core business in the Chinese market, the sales of infant nutrition products in traditional channels such as maternal and infant stores and physical retail stores were affected in the early stage of the outbreak due to the limitation of offline channels.

Nestle infant nutrition business unit, vice president of mainland China Yang Xuxiang

“During the epidemic period, online sales grew very fast. In fact, offline sales have recovered since May and June, and 200000 baby stores in China have begun to harvest passenger flow.” Nestle baby nutrition business unit, vice president of Chinese mainland Yang Xuxiang told Xiao Gu Dai. Looking ahead to the fourth quarter of this year, she said she was “confident” that growth could be achieved in the fourth quarter.

Among them, infant cereal achieved double-digit growth in the third quarter of this year, and it is still the category that Nestle is optimistic about growth prospects in the Chinese market. Yang Xuxiang pointed out that behind the high growth of infant complementary food, we should also see that the popularity rate of this kind of products in China’s first tier cities is still less than 50%, which represents that there is still a broad market space, and enterprises also need to strengthen the promotion of categories.

However, Yang Xuxiang also believes that there is still room for mining in the channel sinking of infant nutrition business. For example, at present, there are 1 million premature infants in China, but only one third of them are really touched.

“The main reason is that parents’ cognition is not in place. Is our product supply and channel sinking limited to the first and second tier cities, because the existence of premature infants is not limited to the first and second tier cities. ” In her opinion, it can be seen that there is a huge space for special professional nutrition products in offline cities. In the process of accelerating the channel sinking in the third and fourth tier cities, the key is to communicate with professional channels.

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