DANONE’S LONG MARCH IN CHINA
A consumer market of over one billion people is a giddying prospect that can easily lead ambitions astray. But Danone is well aware that there are many different markets in China and takes a pragmatic, long-term approach based on clear assessments of local realities.
+ see video Danone in China
+ slideshow:
1: When your mission is bringing health through food to as many people as possible, China—with its population of 1.3 billion—is a market you can’t ignore.
2: As purchasing power rises, Chinese consumers are increasingly turning to the top of the range
3: The infant formula market is powered by the super premium segment, with 40% of the total, and the premium segment with 30%, while basic brands are losing ground. With 20 million births annually, in 2010 China is expected to become the top market for Danone’s Baby Nutrition division.
4: Dumex is no.1 on the super premium segment with its immunity-building formula.
5: The leader on China’s baby nutrition market in both value and volume since 2006, Dumex continued to grow in 2009, with sales up 17.
6: A pioneer of growing-up milks in China, Dumex successfully launched the Complete Care concept for babies from 6 months to age 3, and expanded its share of the premium segment under the Bebelac brand.
7: Long conscious of the health benefits of food, the Chinese think highly of the Danone brand.
8: More people discover the benefits of dairy products, strongly recommended by government authorities.
9: Yogurt is mainly eaten in the evening to aid nighttime digestion, and Activia—sold as Bio in China—is positioned in the “digestive comfort” segment, which accounts for 30% of the market.
10: After two decades of working with partners in China, Danone set out to win over the Shanghai and Guangzhou markets singlehandedly, propelling the Activia brand—sold in China as Bio—to the top of Shanghai’s “digestive comfort” segment.
11: Health benefits are also a selling point for another Danone success story: Mizone, the number-one enriched water in China.
12: With its low sugar, hint of natural fruit and added vitamins, Mizone is seen by consumers as a health drink that restores the body’s natural balance and gives them the energy they need.
13: Present in 14 provinces, Danone Waters China sells flavored waters with added vitamins under the Mizone brand, Evian and Health brand natural mineral waters, and Robust purified water, while delivering Aquarius water to homes and offices in Shanghai.
14: At Nutricia China, the 180 health professionals on our sales and marketing team are 100% local, working closely with Chinese hospitals, surgeons, neurologists and emergency personnel to meet their needs.
15: As a pioneer in enteral nutrition, in which patients are fed by a tube carrying nutrients directly to the digestive tract, our Chinese business unit holds 48% of the market and posted a 35% sales rise in 2009, the steepest in the division.
16: Even for a group as large as Danone, expanding in China requires a step-by-step approach and readiness to adapt. For example, traditional retailers still account for 70-75% of sales.
17: Offering a wide range of products—Mizone, Health, Evian, Robust and Aquarius—Danone Waters China is present at 300,000 points of sale, but still reaches “only” 600 million Chinese consumers in 14 provinces.
18: Danone increased recruiting to train the managers we will need in China tomorrow. In 2009 we set up two dedicated campuses for management and operations courses, most of which are taught in Chinese.