Not satisfied with only being the largest beer seller in China, China Resources snowflake still needs to be the “leader” in the subdivided high-end market. At the first National Channel Partner Conference held yesterday, the beer giant proposed to win the “No.1” of China’s high-end beer by 2025, and laid out its overall strategy.
Xiaoshidai learned at the conference that the starting point of the phased strategy called “3 + 3 + 3” is 2017, and specific objectives and key work have been formulated in each three years. Hou Xiaohai, CEO of China Resources snowflake, who first interpreted the strategy, said that he hoped to transform the company into an industry-leading enterprise with brand profitability, management ability and talent structure through this nine-year strategy.
Hou Xiaohai, CEO of China Resources snowflake
After the meeting, the company’s top management also disclosed that in order to promote high-end, China Resources snowflake established a new channel development department in April this year, focusing on continuously enabling dealers and establishing key customer platform.
Now, let’s have a look.
“Win high end” in 2025
One of the background for the formulation of the “3 + 3 + 3” strategy is the acceleration of high-end beer, and China Resources snowflake is also determined to seize the opportunities brought about by the changing situation of the industry.
“The medium and high-grade beer, high-quality and quantitative is becoming the main trend. If we are still making the strategy of price and promotion, we will not be able to compete in the future, and we will not be qualified to compete.” Hou Xiaohai said at the meeting.
Hou Xiaohai
CMB international once proposed that the main driving force for the growth of China’s beer industry comes from high-end consumption. In 2018, China’s high-end and ultra-high-end beer accounted for only 16.4% of the sales volume, which was far lower than 42.1% and 25% of the United States and South Korea. The average annual compound growth of China’s high-end and ultra-high-end beer sales from 2018 to 2023 is expected to reach 8.5%.
In fact, since a few years ago, China Resources snowflake began to pave the way for further high-end development. Xiaoshidai understands that in the first stage of “3 + 3 + 3”, that is, from 2017 to 2019, the strategy of China Resources snowflake is “quality growth, transformation and upgrading, and innovative development”.
According to Hou Xiaohai, during this period, China Resources snowflake did three things. One is to “shake off the burden” and make China Resources snowflake a stronger and higher quality company. “We have thrown off a lot of burdens, including billions of them. I believe that the snowflakes three years ago and today are totally different.” He said.
Capacity optimization is one of the examples of “subtraction” done by China Resources snowflake. Now this work has entered a new stage. Xiaoshidai has introduced that at the performance meeting of the 2020 half year report, Hou Xiaohai once said that capacity optimization is not the “top priority” of the company’s work, but there is still room for further improvement. I believe there will be no large-scale capacity optimization planning in the future.
The second is “strong foundation”. Hou Xiaohai said that China Resources snowflake has completely changed the management ability, management thinking and management concept of the whole foundation in the past, making the company’s executive power “incomparably powerful”.
The third is “energy storage”. “Our cooperation with Heineken, outstanding brand, production capacity optimization, organizational reengineering, and leading change have made the company accumulate a lot of energy.” Hou Xiaohai said.
Photo source: information of performance meeting of China Resources snowflake in 2020
After completing the early accumulation, China Resources snowflake hopes to achieve “from catching up to surpassing” in the high-end market, so as to promote overall growth.
According to Hou Xiaohai, in the second stage of the “3 + 3 + 3” strategy, that is, from 2020 to 2022, China Resources snowflake’s strategy is to “fight high-end, quality development”.
He said that for this reason, the three things that China Resources snowflake has to accomplish include: fighting high-end, that is, high-end sales can be close to major competitors or competitors with large volume in the industry; improving quality can bring the quality of production, human resources and finance to a new level; and “it is no longer a company that makes more than 1 billion or 2 billion yuan.”. In the first half of this year, the company’s comprehensive turnover was 17.408 billion yuan, and the profit attributable to shareholders was 2.079 billion yuan.
In the last stage of the “3 + 3 + 3” strategy, that is, from 2023 to 2025, the strategy of China Resources snowflake is to “win the high-end, achieve excellent development”, and the three objectives are “win the high-end”, “double benchmarking” and “be first-class”, and finally achieve high-end and profit comprehensive surpassing the competitors.
“The first is to” win the high-end “, that is to say, in 2024, our high-end market will win, and the scale of the whole high-end market exceeds all the competitive products. The second is “double benchmarking”. We are benchmarking with world-class companies. The third is to “be first-class”, and finally to be a world-class beer company. I believe that on that day, our high-end, profit and market value will surpass those of our current competitors. ” Hou Xiaohai preached.
Xiaoshidai introduced that at the annual performance meeting in 2019, Hou Xiaohai said at that time that in China’s high-end beer market, the market share of China Resources beer was about 14-15%, of which Heineken was about 3-4%. “We hope to be able to at least double our share (in the high-end beer market) in the next 3-7 years and get closer to our competitors faster, which is our goal.” He said.
In the first year of the second stage of the “3 + 3 + 3” strategy, China Resources snowflake has handed over a “high score answer sheet” this year.
Hou Xiaohai pointed out that in this year full of challenges, all employees and partners of China Resources snowflake still “created the best performance in history together”. Xiaoshidai learned that in the second quarter of this year, the company’s sales, revenue and profits hit record highs.
Xiaoshi introduced that when analyzing the first half of China Resources beer profit growth, houxiaohai gave one reason for this is that the sales volume of Xili, which is positioned as high-end, grew rapidly in the second quarter, which greatly supported the profit growth.
At the above meeting, according to Richard weissend, President of Heineken Management (Shanghai) Co., Ltd., the company’s brand has achieved significant growth in China this year and will break the sales record in this market. Next, Amstel and Edelweiss, which are owned by Heineke, will also be introduced into the Chinese market.
Dealer’s “staff”
In order to achieve the high-end strategy more smoothly, China Resources snowflake also set up a new channel development department in April this year.
So why should snowflakes set up such a new department? “The work and goal of channel development department is to build excellent dealers and serve snowflakes with high-end strategy.” Wang Weijian, director of China Resources Snow channel development department, told the meeting.
“All channel participants must understand the brand more and know the brand more, so that he can know how to market the brand.” Wang Weijian told Xiaoshi Dai after the meeting.
He said the role of the channel development department was the dealer’s “staff.”. “If I don’t have the ability (dealer), I give him high-end wine, it is difficult for him to sell well and it is difficult to develop continuously.”. At present, the number of distributors of Cr snowflake has exceeded 18000.
Wangweijian, director of Huarun snow Channel Development Department
According to its introduction, at the channel level, in order to build the high-end into the growth engine of China Resources snowflake, the channel development department will start from two aspects: one is to continuously empower dealers and the other is to build a national major customer platform.
On the sustainable empowerment dealers, Wang said that China Resources snowflake will first support its operation ability, management ability and information technology capability. “For example, there are many B2B and o2o now. What can dealers do? If there is no technical team, snowflake helps you to make technical reserve in the background, help you build a platform to expand o2o and expand new marketing. If the dealer doesn’t, we can help you do team training. “
Second, China Resources snowflake will provide comprehensive training for dealers. “From training dealers’ bosses on strategic leadership to professional business training for dealers’ managers, financial directors and logistics directors, as well as business competence and product knowledge training for the basic employees of dealers.” Next year, China Resources snowflake will also include dealers in the system of China Resources University, Wang said. According to the data, one of the functions of Cr university is to train business talents.
Third, the company will establish a professional experience sharing platform for dealers. “Any class share is not as practical as everyone does.” “So we will sort out the business experience, creative marketing and management inadequate operation methods summarized by dealers in actual operation, and take dealers to visit, learn and share discussions,” Wang said
Considering the different needs of different dealers, Wang Weijian told Xiaoshi that China Resources snowflake will be “customized” empowered. For example, large dealers may need digital services more, while relatively small dealers need more urgent needs for brand operation and marketing transformation.
“There are several hundred million sales of Chinese wine manufacturers, and only 230000 and hundreds of thousands of sales in a small year. But they all have value, and everyone has different bottlenecks at different stages. “As a manufacturer, it is very meaningful how we can help them break through the bottleneck, because the bottleneck they encounter is the way that others think is the way they have gone. If someone tells him, give him some advice and information to break through.” “Once this dealer breaks through (bottlenecks), it is a very good growth point for manufacturers,” he said
As for building a national big customer platform, Wang said the platform will be launched early next year. For qualified dealers, Cr snowflake will provide a variety of “VIP services” for them, including face-to-face communication with CEO.
In the future, the company will gradually cultivate more big customers. “We will rely on the national big customer platform to establish regional and regional customer management platforms, so that resources can penetrate more dealers, and encourage more dealers to develop more upward.” Wang Weijian said.
“On the way of high-end, with the growth of Chinese market and the improvement of quality in the future, China Resources snowflake is not as difficult as many popular cognition on this road. It’s also possible for elephants to turn around and can also turn very quickly. ” Heyong, Secretary General of China Wine Association and director of beer branch, pointed out in the exchange.
After five years, can China Resources snowflakes, which “vigorously” attack China’s high-end market, take the first place and become the leading international enterprises? We’ll see.
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