The ready-to-eat market in China by Daxue consulting

1. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Add cover picture 2018 DAXUE CONSULTING ALL RIGHTS RESERVED THEREADY-TO-EAT MARKETINCHINA

2. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Health and nutrition are the trends of the ready-to-eat market in China The market demands of instant food is slowly decreasing in China Taste is the most important factors of instant food for Chinese consumers The instant food market, especially instant noodles , is dominated by domestic brands Chinese online shopping carnivals (Double 11) effectively increase the sales of instant food Health and nutrition have been the new trends of instant food in China

3. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Market drivers for international brands in China 1. 2. 3. 4. 5. Due to the huge population, China has the largest demand for instant food in the world The increasing disposable income allows Chinese people purchase more expensive instant food The increasingly fast pace of life in urban areas stimulates the growth of demand for instant/processed food Cross-border e-commerce (such as Kaola) make international brands access China’s market with less barriers, such as tax Social media platforms (Weibo and WeChat) are useful ways to reach local consumers in China

5. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Market background and main products Ready-to-eat market consists of two parts: Instant food and snacks. In this report, we mainly discuss instant food in China. Instant food includes instant noodles , instant meat, canned food, instant rice, quick-frozen food and etc. Among them, instant noodles is the most popular one. Since 1970, China has started to manufacture instant noodles and international instant food brands entered China’s market from 1990s. Instant noodles from Master Kong (康师傅) Instant rice from Sanquan (三全) Instant/canned meat from Maling (梅林)

6. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED China is the largest producer and consumer of instant noodles in the world. The sales of instant noodles have been continually increasing for 15 years since the 1990s. But, the market demands of instant noodles showed a reducing trend in recent years. The main reasons are fast food delivery services, a lot of platforms/apps for ordering food and rising health awareness of China’s consumers. 44.4 40.4 38.5 37.5 36.8 2014 2015 2016 2017 2018F The market demand of instant noodles in China (billion packets– 2014-2018) Source: Askci.com Consumption and market size in China

7. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Consumption and market size in China China has been the largest canned food producing country with around 12.9 million tons production in 2017, but a large of them exported to other countries. China’s annual per-capita consumption of canned food is 8kg, which is much lower than USA (90 kg) and Western Europe (50 kg), and its sales revenue is decreasing. Because China’s food delivery service has been greatly improved in recent years, many people don’t have to store much cooked/processed food. 163.17 161.52 192.22 180.69 145 150 155 160 165 170 175 180 185 190 195 2014 2015 2016 2017 BillionRMB Sales revenue of canned food market in China (billion RMB – 2014-2017) Source: Forward the Economist

8. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Consumer analysis: Texture and flavour are the main factors of buying instant food In China, the most important purchasing factors for instant food are texture and flavour, brand image and word-of-mouth, manufacturing and expiry date. It means Chinese consumers prefer tasty instant food and popular brands. 1% 2% 3% 4% 4% 5% 7% 7% 9% 9% 10% 17% 22% Cooking instructions attached Place of origin Nutrition Quality certification Price New products Organic & additive free Packaging Health Raw ingredients Manufacturing and expiry date Brand familiarity Texture and flavour The first consideration in buying instant food (2018) Source: HKTDC Research

9. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Baidu Index – Interest trends toward the segments (1/2) The number of searches of canned food reached the lowest point in February 2018 for the Spring Festival. The number of searches of dry fruit sharply increased early February and reached the highest point in the Spring Festival, since dry fruit is one of the desired goods for the Chinese New Year(as gifts and for guests). The search frequency of “canned food” in 2018 on Baidu index The search frequency of “dry fruit” in 2018 on Baidu index Baidu is the #1 search engine in China. The volume of search (more than ¾ of the total search made on Chinese Internet) exhibits the market digital trends The 2018 Spring Festival in China The 2018 Spring Festival in China

10. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Baidu Index – Interest trends toward the segments (2/2) The search index of instant food fluctuated around its average value and reached the lowest point during the February 2018 when is was the Spring Festival. The number of searches of puffed food showed decreasing and reached the lowest point during September and October 2018 for the Mid- Autumn Festival and Chinese National day. The search frequency of “instant food” in 2018 on Baidu index The search frequency of “puffed food” in 2018 on Baidu index Baidu is the #1 search engine in China. The volume of search (more than ¾ of the total search made on Chinese Internet) exhibits the market digital trends The 2018 Spring Festival in China The Mid- Autumn Festival Chinese National day

11. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Baidu Index – Semantic analysis (1/2) The most related keywords to “Dry fruit” are “Cashews”, “nuts”, “whole sales market of dry fruit” and “dry fruit from Xinjiang province”. The most related keywords to “Potato chips” are “Lays”, “Lays potato chips”, “Copico/Copico potato chips”, “Pringles” “fries”, “the way of making potato chips” and “potato chips brands”. Dry fruit Cashews Nuts Whole sales market of dry fruit The effect of figs Xinjiang province Dry fruit from Xinjiang province Different kinds of dry fruit Dry fruit brands Potato chips Lays Copico Lays potato chips Potato chips brands fries The way of making Potato chips Copico potato chips Pringl es

12. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Baidu Index – Semantic analysis (2/2) The most related keywords to “Cookie” are “original taste cookie”, “how to make cookie”, “cookie made by eggs” and “Lady Finger” (a kind of biscuit from Italy). The most related keywords to “Cooked food” are “Cooked food franchise”, “top 10 brands of delicatessens” and “Tianfuhao” (a Chinese processed food brand). Cookie original taste cookie cookie made by eggs the way of making cookie Lady Finger How to make cookie cookie brands Cranberry cookie Cooked food Brands delicatessens Tianfuhaotop 10 brands of delicatessens Cooked food franchise Prepared cold Franchise

13. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Zhihu questions – consumer concerns & information requests On Zhihu, questions and answers about instant food can fit into one of two categories: 1) Products recommendation based on different needs (mainly about tastes, convenience and safety). 2) Knowledge about instant food, such as production process and nutrition. Is there any delicious ready-to- eat meat that are easy to buy? TEH HO (德和), it‟s the brand recommended by people from Zhihu, I brought its canned beef, it looks exactly the same with the picture. It‟s delicious and not very spicy. Which ready-to-eat bird‟s nest brand is good? Most bird‟s nest comes from Indonesia, about ready-to-eat bird‟s nest, I recommend a Singapore brand HOCKHUA (福华). Its ready-to-eat bird‟s nest is delicious and safety. Zhihu is the first Q&A website. in China, and has transitioned to a social media sharing platform gathering more than 100 million answers on various topics. The platform is especially relevant to reach higher-, well- educated social classes

14. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Social media analysis - Wechat On WeChat, most posts and articles about instant food are recommendations of instant food with good taste (international and domestic). Different kinds of instant noodles are very popular among those posts. Healthy and safety issues are also important content in many posts. Instant food that can arouse your appetite! You will never worry about hungry when you back to home. Hot dry noodles , instant bibimbap and macaroni cheese. This post has 890 views on WeChat. What is the damage for health when a person eats instant food frequently? It‟s Ok to eat instant food once a week, but the person will be undernourished for long-term eating. Also, it‟s better to eat instant food with vegetables and don‟t drink the soup when eat instant noodles and put less condiment in it. The article has 1,239 views. Wechat is the #1 social media in China and an absolute must-have for a market entry promotion. It accounts for over 1 billion active users

15. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Social media analysis - Weibo On Weibo, the sharing of instant/processed seafood, noodles , meat and dumplings are the main posts about instant food. International brands and domestic brands are both popular among those posts, many consumers like instant food from other Asian countries, such as South Korea. Processed/cooked spicy crab (instant seafood), 4 crabs per package and free shipping. The post has 40 likes and 91 shares. What‟s the main instant food for lazy couples last month. Instant rice noodles , processed fried dumplings and Korean instant dumplings. The post has 36 likes and 46 comments. Sina Weibo is a microblogging site with nearly 400 million monthly users, and is a well leveraged platform to spread marketing campaign on Chinese Internet

16. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Context of consumption in China On Social media, pictures about instant food are usually taken from the consumers’ home, cars, supermarket and convenient stores, most of the pictures are recommending different kinds of instant food because they are cheap, tasty and super convenient Domestic brands and international brands are both very popular among Chinese consumers The picture has been taken from home and shared on Weibo and those instant food (and snack food) was purchased from supermarket. This picture has been shared on Baidu Tieba (百度贴吧), which is a popular online community that heavily integrates Baidu„s search engine. This post recommended about instant hot pot for tasty and super convenient

17. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Online trends : consumer perception On Tmall/Taobao and JD, most positive feedback focused more on flavour, fast delivery and reasonable price. Negative feedback focused more on unpleaseant food, broken packages, slow delivery, high price and insufficient quantity of goods. I‟m a regular customer of this kind of instant noodles , it has high cost performance. Its price is lower than offline stores and delivery is also good. I‟m very satisfied. The food is tasty, it‟s very spicy, it make me feel good. I will buy it again, since it‟s so delicious. The food is very delicious and its price is reasonable, I will buy it again The food is disgusting , it‟s totally made by starch. I will not buy it again. The delivery is too slow, I have waited the product for more than one week. The food is not tasty, there is only a little of vegetable and it‟s expensive. I‟m very disappointed.

19. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Market shares in China As the most popular instant food in China, the instant noodles market is dominating by large domestic brands, such as Master Kong, that occupied more than half of the China’s instant noodles market in 2017. In recent years, more international brands have entered China’s instant noodles market, they are mainly from Asian countries, such as South Korea and Japan. Master Kong 51% Uni-president 21% Other brands 28% Market share of leading instant noodles brands in China by sales revenue (2017) Source: Forward the Economist

20. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Competition analysis: Instant noodle On Taobao/Tmall, the sales of domestic instant noodles brands (leading brands) are much higher than most international brands. The top seller price of international brands is higher than domestic brands on Tmall and international brands’ price range is larger than domestic brands. Brands International vs Domestic Presence on Tmall/Taobao and JD Sales on Tmall/Taobao in November 2018 Top seller price on Tmall Price range on Tmall/Taobao (RMB) Master Kong (康师傅) Domestic Yes 1,780,352 items 12.9 RMB 7.5 to 105 Uni-president (统一) Domestic Yes 1,022,954 items 24.6 RMB 7.5 to 195 SamYang (三养) International Yes 797,884 items 28.9 RMB 7.5 to 228 Nong Shim (农心) International Yes 311,788 items 43.9 RMB 2.6 to 226

21. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Competition analysis: Instant rice On Taobao/Tmall, the most sales of instant rice (mixed with other cooked food) come from domestic brands, international brands’ online sales are generally low, even if they have lower price. Since Chinese brands already built good reputation and many international brands focus more on instant noodles , therefore, instant rice online market is dominated by domestic brands. Brands International vs Domestic Presence on Tmall/Taobao and JD Sales on Tmall/Taobao in November 2018 Top seller price on Tmall Price range on Tmall/Taobao (RMB) Xinmeixiang (新美香) Domestic Yes 232,149 items 49.8 RMB 20 to 88 Gunyan (谷言) Domestic Yes 91,546 items 72 RMB 4.5 to 231 CheilJedang (希杰) International Yes 20,048 items 22 RMB 9 to 150 Nissin (日清) International Yes 232 items 38.8 RMB 10 to 50

22. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Competition analysis: Instant meat As for the instant meat, the sales of domestic brands are obviously higher than international brands on Taobao/Tmall, domestic brands are more popular among Chinese consumers as well. The price of international brands is relatively higher than the price of domestic brands on Taobao/Tmall. Brands International vs Domestic Presence on Tmall/Taobao and JD Sales on Tmall/Taobao in November 2018 Top seller price on Tmall Price range on Tmall/Taobao (RMB) Maling (梅林) Domestic Yes 138,440 items 69.9 RMB 6 to 334.9 Ganzhu (甘竹牌) Domestic Yes 42,451 items 9.7 RMB 9.7 to 39.9 Spam (世棒) International Yes 31,619 items 32.8 RMB 19.9 to 159 The Ho (德和) International Yes 9,402 items 57.9 RMB 9.8 to 298

23. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED E-commerce landscape of the instant noodle Since instant noodles is the most common instant food in China and most instant noodles brands target the mass market, thus the prices of instant noodles are generally low on Tmall and JD. Most expensive SKU Cheapest SKU Top seller SKU •Xiluohui (嘻螺会) •13.26 RMB Top selling SKU •7.5 RMB •276 RMB Price range of the category •0.93 •Market still driven by price Ratio top selling price vs average price •14.16 RMBAverage price

24. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Business cases – Master Kong (康师傅) Digital activity Master Kong is the largest and most popular instant noodles brand in China. The brand’s official website mainly focuses on introducing new arrivals and brand stories. Since the 2018 Double 11 shopping day (the largest offline and online shopping day in China, launched by Taobao), the sales of Master Kong’s instant noodles increased rapidly in November, comparing with previous months. http://www.masterkong.com.cn/ Platform Presence Official account Volume (sales, product reviews or traffic) Masterkong.c om.cn Yes Yes 75,008 visits, monthly Taobao/Tmall Yes Yes 1,780,352 items, in November 2018 JD.com Yes Yes More than 6 million comments Kaola No No The brand isn’t selling on Kaola Pinduoduo Yes Yes 11,152 items, daily sales

25. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Business cases – Master Kong (康师傅) E-reputation in China The most related keywords of “Master Kong instant noodle” are “Master Kong beef noodle”, “spokesman of Master Kong” and its competitors, such as “uni- president” and “Baixiang”. The brand mainly releases advertising videos, pictures and articles about new arrivals, important events and discount activities on Weibo and WeChat accounts. Platform Presence Followers Posting frequency in November Wechat Yes 96,495 7 posts Weibo Yes 1,970,706 11 posts Master Kong instant noodle Master Kong beef noodle Spokesman of Master Kong Baixiang Uni-president instant noodle Master Kong spicy beef noodles Beef Spokesman of Master Kong in 2017

26. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Business cases – Sanquan (三全) Digital activity Sanquan is a well-known Chinese brand specialized for frozen/instant food. The brand’s official website provides info about new arrivals and its most popular food in China. Sanquan’ products have been selling on the main e- commerce platforms in China, such as Tmall, JD and Pinduoduo. https://www.sanquan.com/ Platform Presence Official account Volume (sales, product reviews or traffic) Sanquan.com. cn Yes Yes 5,000 visits, monthly Taobao/Tmall Yes Yes 23,842 items, in November 2018 JD.com Yes Yes More than 10 million comments Kaola No No The brand isn’t selling on Kaola Pinduoduo Yes No 0 sales

27. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Business cases – Sanquan (三全) E-reputation in China The most related keywords of “Sanquan food” are “Sanquan food limited company”, “Sanquan official website”, “Sanquan glue pudding” and its competitors, such as “Synear food” and “Anjoy food”. The brand has built official accounts on WeChat and Weibo and published videos and posters about events and new arrivals. Platform Presence Followers Posting frequency in November Wechat Yes 38,560 6 posts Weibo Yes 208,652 31 posts Sanquan foodOfficial website of Sanquan food Sanquan quick-frozen food Sanquan food limited company Sanquan glue pubbing Anjoy food Synear Sanquan food recruitment

28. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Business cases – Shuanghui (双汇) Digital activity Shuanghui is a famous Chinese food brand focuses on processed/instant meat market in China, its signature product is ham sausage. The brand’s official website usually shows the information about its popular products, discount activities and company news. The brand has built official stores on the main e- commerce platforms in China, such as Taobao/Tmall and JD. http://www.shuanghui.net/ Platform Presence Official account Volume (sales, product reviews or traffic) Shuanghui.co m.cn Yes Yes 9,615 visits, monthly Taobao/Tmall Yes Yes 19,267 items, in November 2018 JD.com Yes Yes More than 5 million comments Kaola No No The brand isn’t selling on Kaola Pinduoduo Yes No 12,083 items, daily sales

29. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Business cases – Shuanghui (双汇) E-reputation in China The most related keywords of “Shuanghui group” are “the development of Shuanghui”, “Shuanghui’s official website”, “recruitment of Shuanghui” and the brand’s competitors, such as “Yurun” and “Jinluo”. The brand promotes its products in China by releasing news and info about its important events and new arrivals on Weibo and WeChat, but those two platforms haven’t been fully used by the brand in November. Platform Presence Followers Posting frequency in November Wechat Yes 53,780 2 posts Weibo Yes 17,082 5 posts Shuanghui group Recruitment of Shuanghui Development of Shuanghui Official website of Shuanghui Yurun Jinluo Shuanghui ham sausage Want-Want Group

30. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Comparing online interest for leading brands On Baidu index, Master Kong showed the highest search frequency, Sanquan had the second highest search frequency and Uni-president showed the lowest search index during the past one year. On WeChat index, Master Kong showed the highest search frequency and much higher than the other three brands in past 30 days. The search brands are Master Kong Sanquan Shuanghui NONGSHIM Uni-president The search brands are Master Kong Sanquan Shuanghui NONGSHIM

31. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Advertising – case study The advertising video of instant noodles was released by Tangdaren (汤达人), which is a well-known instant noodles brand in China. Since the brand mainly attracts Chinese consumers by providing instant noodles with different tastes soup, its advertising video highlighted the delicious and nutritious soup for instant noodles (Many Chinese people like drinking noodles soup). https://v.youku.com/v_show/id_XMzE1NTM3OTU2O A==.html?spm=a2h0k.11417342.soresults.dtitle The advertising video is about instant noodles released by Tangdaren (汤达人) The video is focusing on making soup for the instant noodles of Tangdaren. The advertising consists of two secerns: 1. The process of making soup by a chef. 2. Add soup into instant noodles Finally, the video expressed the slogan: Good noodles come from the soup (好面汤决定) Besides, the logo of JD is showed in the video all the time, it impliesthe main online sales channel of Tangdaren is JD. Only for the audience in China

32. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Brand naming – case studies The Chinese names of instant food brands generally highlight their food’s good/varied tastes and high quality (nutritious, healthy and etc.) Many brands directly show the main food and tastes of their instant food through their names, such as “香辣牛肉面” (spicy beef noodle). •“食” means food or eat, “面” means noodles , “八方” means different areas. “食面八方” means eat noodles from different areas (varied tastes). •The name implies the instant noodles cover different tastes from different areas of China. 食面八方 (noodles brand from Master Kong) •“状元” means “Number One Scholar”, title conferred on the one who came first in the highest imperial examination in ancient China. It is also used to describe people who scored the highest in the university entrance exam. 状元 (dumpling brand from Sanquan) Justification / reason / detail #1 •“王” means “king” and “中” means “of/in”, “王中王” means “The king of kings”. •The name implies the product is the best of the best among all sausages in China. 王中王 (sausage brand from Shuanghui)

33. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED DISTRIBUTION& PROMOTION ANALYSIS

34. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Distribution and promotion: Online sales of instant food The distribution channels of instant food in China consist of 5 parts: supermarket, convenient stores, e-commerce platforms (Taobao/Tmall and JD), wholesales market and vending machines. As the most important online sales channel, Taobao/Tmall showed high instant food sales in June and November for 618 Ideal Life Carnival and Double 11 shopping Carnival (both are large shopping days launched by Taobao/Tmall). 1020.3 642.7 691.7 703.5 731.7 1064.4 0 200 400 600 800 1000 1200 June July August September October November MillionRMB Sales revenue of instant food on Taobao/Tmall (million RMB–June to November 2018) Source: Maijia.com

35. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Online retail Coverage in China The number of brands on JD are more than Tmall, mainly due to the higher requirements and deposit of Tmall for those brands want to entry the platform. International and imported brands mainly come from Europe countries (Italy, England and etc.), Southeast Asia (Singapore and Thailand) and South Korea. Market Segments Number of brands selling on Tmall Number of brands selling on JD Instant noodles 199 520 Instant rice 153 184 Instant meat 200 485 Instant porridge 198 225 Canned food 199 569

36. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Offline retail: Coverage in Shanghai Since the instant food is one of the most common food in China, supermarket and convenient stores are its important offline retail channels. We use Shanghai’s convenient stores (different brands) as the examples of distribution channels. Brands of chain stores Number of stores in Shanghai Family Mart 1,722 7-11 197 Alldays 708 Lawson 753 Baidu Map: 15,402 results Dianping: 44,517 results

37. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED On-the-shelf: representation of the category in stores As one of the most common products in China, instant food is purchased by consumers in supermarket, convenient and cooked/processed food stores. In those stores, instant food usually has individual area (several shelves) and one segment (such as instant noodles ) have one shelf. Most types of instant food are cheap products in those stores, since they are daily/fast food.

38. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Online sales: volume assessment Instant noodles showed the highest sales on Tmall/Taobao, which was the 9 times of instant rice (rice mixed with meat and vegetables) sales on the same platforms. The sales of instant meat were much higher than instant vegetables, which means instant/processed vegetables haven’t been popular in China. Brands Way of ranking: general, popularity, new arrivals, sales and price Instant food Categories 18.79 2.20 Instant noodles Instant rice Sold items of instant noodles and instant rice on Taobao/Tmall (million–November 2018) 770.9 79.6 Instant meat Instant vegetables Sold items of instant meat and vegetables on Taobao/Tmall (thousand –November 2018)

39. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Promotion channels to leverage for international brands in China Dedicated Websites/Apps: Sfbest.com (顺丰优选)/ Sfbest.com app Zghsp.com (中国好食品商城)/ Zghsp app Womai.com (中粮我买网)/ Womai.com app Specialized Magazines: Food and Life (食品与生活) Gourmand (美食) China Food (中国食品) Sfbest.com (顺丰优选) is a specialized food website, instant food is an important part of the shopping website. Food and Life (食品与生活) is a specialized food magazine that focuses on Chinese people‟s daily meal.

40. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED The KOL landscape in China For international brands, KOLs are a huge part of modern Chinese product promotions, and instant food consumers are influenced by KOL’s shared opinions and experiences. China's KOLs, who usually post content about instant food, mainly consist of the food KOLs and brand founders. This is a well- known food KOL‟s Weibo account. The KOL mainly post info, pictures and videos about picking food and cooking, instant food is one part of those posts. Her account has 8,591,947 followers. One of her posts about canned food has 156 shares This is a well- known food KOL‟s Weibo account. The KOL‟s posts focusing on cooking and food recommendation. Instant food is an important topic among those posts. One of her posts about instant noodles has786 shares and 901 likes. The Key Opinion Leader (KOL), or influencers, are a major part of the Chinese online journey, and therefore of the online marketing funnels for international brands in China. KOL will especially be as relevant to target niche audience (micro-KOL) and mainstream consumers (mass-market)

42. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED Health and nutrition are new trends of China’s instant food In order to increase the sales of instant food in China, most brands (domestic and international) are investing more resources into R&D to create new products. Health is the direction of development in the instant food industry. • Low-fat food, low calorie (sugar) food and low-salt food are becoming popular among Chinese consumers, instant food brands have created more healthy instant food, such as the non-fried instant noodles and additive free instant food. Health • The raw materials of instant food also been improved, more vegetables, fruit and whole-grain cereals have been a significant part of many types of instant food in China. Nutrition

43. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED OUR OFFICES Beijing, China Dongzhong Jie #40 Shanghai, China Room 504, 768 Xietu Road, Xuhui District Hong-Kong Island, Hong- Kong, 13 Queen’s Road, Floor 23 ABOUT US Daxue Consulting is a market research Company dedicated to providing the best specially tailored, high quality, customer- specific data in one of the most challenging markets in the world; China. We leverage our unique network of university organizations and professors, business associates, industry experts and foreign and local consultants to find the information you need efficiently, reliably and in a manner that addresses your specific needs. We excel because we’re reliable, resourceful and flexible, everything that the Chinese market demands. TO ACCESS MORE INFORMATION ON THE SHARING ECONOMYIN CHINA, PLEASE CONTACT DX@DAXUECONSULTING.COM

44. TO ACCESS MORE INFORMATION ON THE CHINESEMARKET, PLEASE CONTACT DX@DAXUECONSULTING.COM www.daxueconsulting.com +86 (21) 5386 0380 2018 DAXUE CONSULTING ALL RIGHTS RESERVED This report is the property of Daxue Consulting. No copyrighted materials may be reproduced, redistributed, or transferred without prior consent from Daxue Consulting. For more information on the sharing economy in China, please contact us. CONTACT US HONGKONG|BEIJING|SHANGHAI www.daxueconsulting.com dx@daxueconsulting.com +86 (21) 5386 0380 +86 134 6658 3902 © 2018 DAXUE CONSULTING ALL RIGHTS RESERVED

The ready-to-eat market in China by Daxue consulting

You are reading a preview.

Check these out next

The ready-to-eat market in China by Daxue consulting

More Related Content

Slideshows for you (17)

Similar to The ready-to-eat market in China by Daxue consulting (20)

More from Daxue Consulting (20)

Recently uploaded (20)