Take home
- Super α golden stage+ becomes the first Chinese infant formula brand made in New Zealand and sold in China and internationally by a Chinese dairy company - Yashili.
- Yashili, under China’s leading dairy player Mengniu, set up a new infant formula factory in New Zealand which officially went into production in Nov 2015.
- The move is the latest in China’s multipronged regulatory and trade strategy to reestablish a competitive domestic dairy sector through regulatory selective pressures, establishment of overseas production, access to raw materials sourced overseas and merger and acquisition deals with the largest multinationals dairy companies.
On 23 Apr, Mengniu Yashili launched a new infant formula brand Super α golden stage+ during a press conference held in Changsha, China. This product will be circulated nationally and traded through various channels, such as mother & baby shops and e-commerce platforms. This follows the launch of its overseas version in New Zealand several days ago. The NZ version will be distributed through three local mainstream supermarket chains covering 390 supermarkets, penetrating the whole NZ market.
So far, Yashili is the only company which has a dedicated overseas factory rather than just using OEM factories to produce infant formula which is relatively common. In addition, the product is intended for both the Chinese market and foreign markets. The successful operation of the Mengniu Yaishili NZ factory is the first major move since Mengniu’s acquisition of Yaishili . Acording to Ms. Sun Yipin, the president of Mengniu the manufacturing plant has “excellent resources and world-class operation standards”.
In term of the quality and price of Super α golden stage+, Mr. Lu Minfang, the president of Yashili announced that they have “full confidence in the quality, formula and R&D of the new product and believe it wouldn’t be inferior to imported brands”. The three stages are sold at 288, 278 and 268 RMB respectively, which is priced 30% cheaper than its counterpart with the same quality.
Optimize product lines, brands, distribution channels to get more market share
China’s current regulatory environment for infant formula products is the strictest system ever seen in China. Brands from large dairy groups have more opportunities than ever before and SMEs and smaller OEM brands are being squeezed from the market. There are three main product lines under Yashili, including Yashili (middle-end), Dumex (middle and high end) and Baby & me (super high-end – in cooperation with Arla foods) making up a diverse product portfolio serving the needs of a diverse consumer demographic.
Riding the Wave: Diversifying its Sales Channels
Previously, supermarkets and shopping malls were the main channels as Yashili had failed to keep abreast of the fast development of mother & baby shops and dedicated online shops. Yashili has paid a lot more attention to changes in consumer purchasing behaviors of late and has put great efforts in bringing up these sales channels and will likely reap even greater benefits with the release of its latest brand.
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