American confectionery giant Hershey is experiencing a great change in China.
Today, xiaoshidai received an email sent by Rohit Grover, President of Hershey international business. Hu Tingzhou, the current general manager of Hershey’s Greater China region, will leave Hershey tomorrow. The China team will be temporarily led by two directors.
Hu Tingzhou, general manager of Hershey Greater China
In the eyes of the outside world, this change is quite sudden. However, the great change is far more than that of the top management in China.
Mr. Hu announced his transformation plan at the company’s internal meeting just last Friday, according to a person familiar with Hershey China. According to him, Hershey has decided to adjust its sales channels and service methods in China and will cooperate with a large local distributor in the future. This shift will lead to layoffs. As for the transformation plan, in response to the inquiry of snack food agency a few days ago, Hershey China also responded to the reasons for the transformation, how to operate the new mode and how to arrange employees. Now, let’s take a look at them one by one.
Let’s take a look at the high-level changes in Hershey China. Speaking of Hu Tingzhou’s departure, “in the past few years, Hu Tingzhou has been a key figure in building our Hershey brand in China.” Grover wrote in the email, “we believe that he will make good achievements in pursuing new career challenges in the future.” Hershey China, on the other hand, told xiaoshidai that Hu’s departure was due to “personal career development needs”. According to xiaoshidai, Hu Tingzhou succeeded Grover as general manager of Hershey Greater China last year. Prior to that, he also served as the senior sales director of Hershey Greater China and the senior director of PepsiCo food’s key account department in China. Recently, there are rumors that Hu Tingzhou will soon join a well-known insurance company in China, but this statement has not been confirmed by Hershey officials and himself.
After Hu Tingzhou’s departure, Hershey’s China team will be temporarily led by Sales Director Tian Lei and financial director Chen Yanling, according to the above email. During the transition period, Tian Lei and Chen Yanling will report to William Pritchett. William Pritchett is vice president of strategy at Hershey, according to his LinkedIn home page.
In response to the inquiry, Hershey China responded to snacks and said: “Hershey China will continue to invest in China’s market and lead dealers to continue to promote business in China. Hershey China will still retain our operation team, operating agencies and office space.” In addition, the company also denied to the food agency that its employees would eventually be fully dismissed. However, some of the employees actually serving Hershey China belong to third-party labor dispatch, according to the above-mentioned people. Hershey China did not respond to whether these employees were within the scope of the layoff. Hershey only told xiaoshidai that the employees who might be affected by the sales channel and service mode adjustment would strictly abide by the relevant laws and regulations of the Chinese government and the articles of association to protect their legitimate rights and interests.
For Hershey, this transformation is the biggest adjustment in China in recent years. After years of channel exploration, Hershey may think that cooperation with a local distributor is a better choice. However, as of now, Hershey China has not disclosed which distributor it will cooperate with. But it still stressed that “China is one of Hershey’s important markets.” Hershey said it would continue its long-term development strategy in China.
In the transformation of China’s market, Hershey’s cooperation with strategic dealers will be channel licensing, the company told xiaoshidai. Under this new operation mode, Hershey’s Chinese employees will continue to cooperate with dealers, jointly responsible for the strategy, implementation and innovation promotion in China. Specifically, the China operations team will continue to lead the strategy formulation, market and brand strategy, product development, production and supply, and core customers and strategic distributors management in China. Its distributor partners will be responsible for sales and services of the channel, as well as product import, logistics and distribution services in the Chinese mainland market. In addition, Hershey will also build a supply chain system with strategic dealers. Snack generation learned that at present, China’s products are well produced by its Malaysia plant and third party factories in mainland China. “The Chinese market has bred a large number of local enterprises that provide high-quality services and have extensive channels, sales channels and operational advantages. Hershey believes that by working with experienced first-class local partners, the company will be able to serve Chinese consumers faster and better. ” Hershey China told the snack generation.
Try to break through
In fact, prior to this series of actions, Hershey has made other efforts to expand its sales channels in China. For example, the U.S. chocolate giant had hoped to “penetrate into places where Hershey can’t go through channels” by acquiring golden monkey, a local candy company. But in 2015, bideri, then Hershey’s chairman and chief executive, said, “the results were disappointing.” At that time, he pointed out that Hershey found that in the process of integrating golden monkeys, it was necessary to solve some “significant business problems” in order to achieve the established goals. For example, the golden monkey distributor network was not as stable as originally thought. However, after many attempts failed to reverse its performance, Hershey completely “bid farewell” to golden monkey less than four years after its acquisition.
Under the background of weak industry growth, Hershey has also tried to “break through” in the direction of e-commerce and product diversification. Hershey China said that in recent years, it has always focused on the implementation of three major strategies, namely, while vigorously exploring e-commerce channels, it focused on chocolate categories and continued to innovate to meet the needs of the Chinese market. It is reported that in the past four years, Hershey’s business in China has achieved strong growth in net sales, net profit and gross profit margin with a good momentum of development. Today, the transformation plan in cooperation with local distributors also proves that Hershey, which is in a dominant position in China’s chocolate industry, has always been reluctant to give up the “sweetness” here.