In the Chinese market, Yizi, which owns brands such as Oreo, interesting, Taiping and xuanmai, has not only successfully overcome the difficulties of the epidemic, but also is expected to break the 10 billion mark for the first time this year.
In a recent exclusive exchange with the snack generation, Zhu Yijing, vice president of sales of Yizi Greater China, said that China is the fastest market for Yizi to recover from the epidemic and achieved its growth target last year. It is also revealed that the annual sales of Yizi China may exceed 10 billion for the first time this year.
Zhu Yijing, vice president of sales of Yizi Greater China
Yizi China’s rapid “blood return” is largely due to the profound accumulation of global channel layout.
According to Zhu Yijing, offline, as of the second quarter of this year, Yizi China has covered nearly 3 million stores and about half of China’s retail stores. Online, Yizi has developed official flagship stores, e-commerce supermarkets, o2o (online to offline) and eb2b (electronic B2B), and enabled offline through digitization.
So, how does the global layout help Yizi solve the epidemic challenge? How does this snack giant continue to enclosure the main battlefield of offline channels? Next, let’s take a look at the business experience of Yizi China and its thoughts on the future growth path. (here’s the video of the exchange.)
Facing the complex and diversified retail network in the Chinese market, how to create the most suitable channel combination for enterprises is undoubtedly an important topic. In Zhu Yijing’s opinion, there is no perfect formula for channel layout. Ideally, the foundation laid can respond quickly and flexibly to changes.
“Behind the global layout of distribution channels, the essence is based on the dynamic balance of insight into complex retail networks, making clear what channels to invest in at which time,” she told snack generation, “When the epidemic just happened, consumers were at home, and o2o and e-commerce had greater demand, which could make up for the affected offline channels such as convenience stores and catering. However, when everyone went out on holiday, e-commerce may decline, and convenience stores and catering may pick up again.”
Among the channels for the accelerated rise of the epidemic, o2o has attracted many food and daily chemical FMCG enterprises. For snacks that rely more on impulse consumption, o2o that can be delivered home quickly is undoubtedly one of the Highlands that must be seized.
For example, when Yizi China launched two Oreo spring Limited new products in April last year, it took the convenience store as the first channel for the first time. At the same time, it linked hungry, taoxianda and other online platforms to release new products and increase the layout of o2o strategy.
Even in the post epidemic era, the overall momentum of o2o is not so strong, which still supports the growth of Yizi China and helps it further promote the integration of online and offline channels.
“In the face of big customers such as Wal Mart and RT mart, we can use o2o to help make up for the passenger flow loss of offline retail formats. In the latest quarter of this year, Yizi has nearly double-digit growth in major offline stores, and I believe o2o has contributed greatly,” Zhu Yijing said.
In a report released last year, inminster pointed out that a major driver of the future growth of China’s snack market is improved availability, that is, easier purchase. More distribution options such as fresh software and o2o retailers ensure that consumers can buy snacks anytime and anywhere. This driver may be stronger in 2021.
In fact, before the outbreak of the epidemic, Yizi China had begun to tap the o2o potential. In August 2018, Joost Vlaanderen, President of Yizi Greater China, told xiaoshidai that one of the fast-growing segments found by the company was the new o2o retail format. At that time, Yizi China’s o2o growth rate was as high as 70%.
“Since we became o2o, our growth has tripled and quadrupled in the past few years. Even after the normalization of epidemic prevention and control, this business has a certain scale, and we have still achieved high double-digit growth this year. On some head platforms, whether meituan or hungry, Yizi is among the top in the snack industry.” Zhu Yijing told the snack generation.
60000 new stores in the second quarter
While adding new channels, Yizi China continued to sink the market, and maintained a steady pace of expansion after the epidemic.
Zhu Yijing revealed to the snack generation that in the second quarter of this year, Yizi China entered 60000 offline retail stores. “We mainly filled some blank markets, including low-level cities, towns and the outer suburbs of some big cities. Through the capacity-building of distribution channels, our products continued to penetrate into the blank market in the past.”.
Zhu Yijing pointed out that when entering the blank area of low-level cities, Yizi China will not blindly pursue the expansion speed, but more importantly, first delineate products that meet the characteristics of local consumption.
“Not all Yizi’s product lines are suitable for the low-end market. When we spread the distribution channel to the village, we should first find out whether there are products suitable for local consumers. This requires a review of our current products. If not, we need R & D and production,” Zhu Yijing said.
In her opinion, the layout of offline stores is like a paving project. It is important to have a road. However, before entering the blank market, we should also consider whether the efficiency and value of existing stores have been maximized.
“If we have this road project, we have to increase the number of cars and passengers, otherwise it is difficult to pay for the operation cost of the road. In fact, if you go to farther and smaller stores, the output will be less. Therefore, at this stage, we should first improve our product line, depending on whether we have developed all the products to be developed and made good use of the current infrastructure Then we’ll see if it should be spread to a new low-line market, “Zhu Yijing said.
In addition, Zhu Yijing also revealed to the snack generation that Yizi China has also opened new convenience stores of PetroChina and Sinopec this year. This is also an offline channel with little impact under the epidemic and matching the impulsive consumption characteristics of snacks.
The 2021 Chinese shopper Report Series jointly released by Kaidu consumer index and Bain company in June this year pointed out that in 2020, convenience stores were the only offline channel to maintain stability, which had basically returned to the pre epidemic level at that time.
Even if it was disturbed by the epidemic, Yizi China still handed over a bright growth report card. Xiaoshidai learned from the first quarter performance meeting held by the company in April this year that the average growth rate of China’s market revenue in the past two years has reached double digits.
Turning to the growth secret of Yizi China in recent years, Zhu Yijing said, “we will feel that it is largely due to the ‘local first’ strategy put forward by Dirk Van de put, Global CEO.”
Snack generation introduced that in 2018, Yizi released three new global strategies, and launched a new local business architecture since January 2019, giving the regional team greater decision-making power to respond to the preferences of local consumers faster.
“In the past, as a large international company, Yizi was very good at introducing some good foreign products into the Chinese market. This is the first step and we have done it. The second step is to implement the” local first “in all aspects, including distribution channels, product tastes, marketing methods, etc., because China’s channels, consumer taste preferences and media matrix are similar to those abroad Different, “said Zhu.
An example is that at the moment when the concept of “0 sugar” is popular, Oreo, which has contributed most of the income to Yizi China, has also launched relevant new products. Recently, the brand announced the launch of its first 0 sugar series sandwich biscuits in the Chinese market, including original flavor and Huayang rose.
“For Yizi China, our vision is to make really good snacks. After the epidemic, consumers’ demand for health is stronger than ever, and we have also advanced some existing new product plans, such as Oreo 0 sugar series. This product is aimed at urban youth and white-collar workers, who often pay close attention to sugar intake.” Zhu Yijing said, Therefore, Yizi China hopes to provide consumers with delicious and affordable snacks by reducing sugar, and will make more investment in this direction in the future.
Driven by the healthy trend, small snacks are expected to become a big business with a scale of more than trillion in the near future.
According to the latest IMT 2021 China snack consumption trend report obtained by snack generation, the total retail sales of snacks in China is expected to reach 848 billion yuan in 2020. By 2025, this figure is expected to reach 1.253 trillion yuan, and the average annual compound growth rate from 2020 to 2025 is expected to be 8.1%.
According to the above report, the driving forces for the strong growth of snack sales in the future include the increasing demand for healthy snacks, the continuous expansion of snack eating occasions and the further refinement and specialization of products.
As early as 2019, Feng Pude, the global leader of Yizi, also expressed the view that China’s market potential is huge. When he visited the Chinese market, he said that about 25% of the global snack growth is expected to come from China in the next 5 to 10 years.
Two “sports meetings”
Looking to the future, Zhu Yijing, who has more than ten years of experience in the snack industry, also believes that the growth space of the Chinese market is very large, and Yizi China hopes to be better than the two “games”.
“One is Yizi’s’ Family Games’, which is close to Yizi’s largest market in the world, the United States. The other is the ‘National Games’ in the Chinese market, which competes with other excellent snack brands in China,” she told the snack generation.
So, what should Yizi China do? In this regard, Zhu Yijing’s answer is: build new businesses while doing a good job in core businesses.
“Any large company must first do a good job in its core business and generate controllable profits. Like Yizi China, biscuits, chewing gum and candy are the core.” Zhu Yijing told snack generation that Yizi China will continue its success formula in its core business: make the right products, establish a good brand, reach more consumers and continuously improve efficiency.
At the same time, Yizi China is also actively exploring new business potential.
“A good business structure will usually ensure the sustainable growth of core business. At the same time, the business with relatively small scale but great potential in the future will be divided into several projects, and different teams will lead its development.” Zhu Yijing revealed that in order to improve the success probability and speed of developing new business, Yizi China has “agile” teams under different departments, “Like a Pathfinder.”.
“In fact, agile here is a way of working, not a dedicated team, and the members of the agile team may not be doing it full-time. Because you are exploring the unknown, it is impossible to do it in the original workflow and way, so the agile team also needs different KPIs and workflow to promote things,” Zhu Yijing said.
The interesting and funny cookies listed this year belong to the agile team. Xiaoshidai noticed that unlike the previous crispy cookies, this product focuses on “soft waxy sandwich”.
“We know that Chinese consumers like this product form through online data, so we decided to launch it quickly. The launch time of this product is several months shorter than the normal time. The first three months of listing are more small-scale water tests. If the data feedback from e-commerce and some offline customers proves its potential, we will promote it quickly in the next few months “Zhu Yijing said to xiaoshidai.
Interestingly, in order to improve the olfactory sensitivity to market changes, Yizi China will also communicate with new food and beverage consumer brands, including three and a half coffee and adopting a cow.
“Earlier this year, we learned from three and a half meals how to successfully create new products. We also learned that many of their product tests are done by expert consumers, such as KOL or Koc on the vertical platform. We also think we can use this method for more professional product development, because ordinary consumers can only vote which biscuit or sugar is better, which is difficult to give Give multi-dimensional professional advice, “she said.
“We think that making a company grow continuously actually requires constant self iteration. No matter how good the past is, you never know what will change in the future, so you must maintain your enthusiasm for learning,” Zhu said.
It can be expected that after crossing the 10 billion mark, Yizi China will continue to move forward with its own methodology of “addition, subtraction, multiplication and division”: continue to overweight o2o and other high growth potential businesses; Focus on the long-term development of its core business and do not blindly follow the fleeting tuyere of the market; Organically combine global brands with local consumption preferences; Deliver future agile exploration to different teams.