TH True Milk in China.pptx

Bảo Duyên
Team menber
Mỹ Linh
Anh Thư
Huỳnh Ngọc

TABLE OF CONTENTS
COMPANY
OVERVIEW
COMPANY
STRATEGY
Global Strategy
Market Entry Analysis
Marketing Plan
COUNTRY
NOTEBOOK
General Country Indicators
Market Potential Indicators
01 03
02

Profile Milestones Product
COMPANY OVERVIEW
Business
Performance
Global Market
Presence
Before &
During Covid 19

Brief introduction
● Set up in 2008
● Established in 02/2009
● Specializing in
production dairy
products, water, …
Company Overview | Profile
● Located: most at
Nghe An
● ≈ 5200 employees
are active
Before entered dairy market: Most milk IN Vietnam was
reconstituted powdered milk.
After entered dairy market: Businesses competed in dairy’s
quality & farming → processed products from fresh milk.
Vietnam increased rapidly (proportion of liquid milk made
from raw milk increased from 8% (2008) to 40% (2020)).

Vision & Mission
VISION MISSION
Applying high
technological science
management to invest in
national strategic
sustainable development.
As a patriotic business
Group, TH Group puts
the mutual benefits of it
in the mutual benefits of
the nation.

03
02
01
Five core values
For true
happiness
For public
health
Truly
natural
05
04
Environmentally friendly -
Innovative thinking
Harmonization
of interests

SLOGAN

MILESTONES
Company Overview | Milestones
1
2
3
4
Opening the First
TH true mart store
Inaugurating TH clean fresh
milk factory (phase I)
Inaugurating the first TH
dairy farm at Moscow, Russia
Becoming the first
Vietnamese Business being
exported fresh milk into China.
26/05/2011
31/01/2018
09/07/2013
22/10/2019

2010 2012 2013
PRODUCT
Company Overview | Product
TH true
MILK
Ceremony of set
of fresh,
pasteurized milk
products with
added nutrients
TH true
YOGURT

2014 2015 2016 2017
PRODUCT
TOP KID
SCHOOL MILK
TH true MILK; TH true
YOGURT Matcha; TH
true YOGURT without
sugar; TOPTEEN; TH
true YOGURT TOP KID
TH true BUTTER;
TH true CHEESE
TOPTEEN; TH true
MILK Organic;
TH true Herbal;
TH true MILK
TOPKID Organic

2018 2019 2020
PRODUCT
TH true NUT;
TH true MALT;
TH true ICE CREAM
TH true YOGURT TH true RICE;
TH true JUICE;
TH true JUICE milk

BUSINESS PERFORMANCE
2015
10/02: Setting a record for largest cluster of dairy farms with largest
high-tech application in Asia.
25/06: Award “Best Food in ASEAN” for TH school MILK-TOP KID.
17/09: Won 3 Gold, 3 Silver & 1 Bronze Awards at Moscow World Food
Fair.
2016
21/02: TH won 3 awards at International Fair: Gulfood Dubai.
19/10: Received award for the best dairy farm in Vietnam by Vietstock
10/12: Awarded with a gold cup (organic dairy farm).
Company Overview | Business Performance

2018
20/12: Being awarded "Vietnam Value" for the third time in a row.
According to market retail measurement data in November 2018, TH
True Milk milk grew by nearly 22% in volume and 30% in revenue.
So far, its market share in the fresh milk segment in urban retail
channels has reached 40%.
Since 2017, TH True Milk Company has made leaps and bounds in
business operation. The company’s net profit in 2017 was 319 billion
VND, and in 2018 it was 450 billion VND. Within 5 years from 2014 to
2018, TH's net profit increased 15 times.

2019
22/02: Being awarded the 2nd-class Labor Medal
“Product of the Year” for 5 consecutive years from 2015 to 2019 at the
World Food Exhibition in Moscow (Russia)
2020
22/10: TH ranked in the Top 6 Best Workplace in Vietnam
25/11: TH is honoured as National Brand for the third consecutive time
2021
Be first dairy company in Vietnam win GPEA WORLD CLASS award.

GLOBAL MARKET PRESENCE
● Youngest in dairy
industry
● Grow rapidly: Accounted
for 6.1% of Vietnam’s milk
market shares in 2020
after operating for 12
years
● Competitors: Vinamilk
(≈ half of market shares),
FrieslandCampina,
Nutifood, …
Company Overview | Global Market Presence

BEFORE COVID PANDEMIC
Before Covid-19 pandemic, TH
Group has witnessed rapid
growth when its revenue has
increased nearly 30% and its
market share in the fresh milk
segment in urban retail channels
has reached 40% in 2018.
Company Overview | Before and During Covid-19

DURING COVID PANDEMIC
● Still guaranteed to be produced and supplied abundantly.
● Promoted online sales channels that make customers to shop
more convenient and increase sales of TH stores.
● In the first 6 months of 2021, TH's e-commerce channels have
grown by more than 90% compared to the same period in 2020.
Especially when the Covid-19 epidemic broke out in the southern
provinces, the number of orders through these channels
increased 3-4 times higher than the average.
Company Overview | Before and During Covid-19

Political
- China became a
member of the World
Trade Organization in
2001 and the economy
has grown extremely
fast in recent decades.
→ Facilitate the entry
of countries in WTO
(including Vietnam) to
the Chinese market
Country Notebook | General Country Indicators

Political
- China has become a superpower in
many different aspects including politics.
The presence of Communist Party in
China give TH Group a stable political
environment for doing business.
- Over the past years, the Ministry of
Industry and Trade of Vietnam and
China have built a deep and close
relationship .
→ Create favorable conditions for firms
in Viet Nam

Political
- In 2018, a plan was approved to
increase the party’s control over
media, announcing that media &
television stations will be merged
into a state entity. In addition,
Western social media such as
Facebook, Twitter & YouTube
have been blocked in several
years.
→ TH Group must change to
have a suitable promotion
strategy to adapt these policies.

Political
- Ambition to increase its political
power through its military strategy:
China is now the 2nd country in the
world in terms of army expenditures
($261 billion in 2019).
- China is involved in several territorial
disputes with South Chinese Sea,
Taiwan, India, Japan, Hong Kong
- China ranks 78th on the global
corruption index from Transparency
International
Source: https://www.sipri.org
Transparency International

ECONOMIC
- Economic Growth: China has achieved incredible economic growth
in the last four decades. This growth has raised the average standard
of living. However, this growth is slowing down as China’s economy is
maturing. While the GDP growth was over 10% in 2010, this has
slowed down to just over 6% in 2019. In addition, Covid-19 had a major
negative impact on China’s economic developments in 2020. China
remains the only large economy that did manage to grow
economically during 2020.
→ Despite the slowdown in GDP growth rate in recent years,
China's economy has demonstrated an improved standard of
living, which has made residents able to spend on health.

ECONOMIC
- Partner of Emerging Economies:
China has established itself as one of
the main investment and trading
partners of emerging economies in
Asia, Latin America and Africa,
especially through the Belt and Road
Initiative. This is a program by the
Chinese government, started in 2013,
focusing on infrastructure
development in many other countries
in all parts of the world including Viet
Nam.

ECONOMIC
- Trade War between China and US: In recent years, China has been
involved in a trade war with the United States. Both countries
announced trade tariffs on the import of each other’s goods. The USA
has accused China of unfair practices and stealing intellectual
property. China has denied these claims. The trade war was at its
most intense state during the years Donald Trump was president. It is
uncertain how the future will be now that Joe Biden has taken over.
- Made in China 2025: a strategic initiative of the Chinese
government aims to turn China from a low-cost developer to a
manufacturer of high-end and high-tech products.

SOCIAL
- Population: China has the
largest population in the
world (over 1.4 billion in
2021). The standard of living
of the citizens of China have
increased together with the
economic growth. Among
dairy products, milk
products are used the
most.
Dairy products purchased in Q4/2017
by monthly household income
Source: Statista

SOCIAL
- China is the first place to
be hit by covid-19 and was
significantly affected.
Although China has been
able to control the virus
much quicker than other
countries with extremely
strict lockdowns, this
country experienced an
increase online sale in food
products including milk
and dairy
Source: Statista
Types of food products purchased online
during Covid pandemic in China as of 05/2020

SOCIAL
- Human Rights: In China, there still
exist several human rights violations
against ethinic minorities (in Xinjiang
and Tibet); gender inequality
between men and women and also
discrimination based on sexual
preferences.
- Education: China has significantly
improved its quality of education.
China is nowadays well-represented
on the global university rankings.
Source:
https://www.topuniversities.com
Global university rankings
in 2022

TECHNOLOGICAL
- “Made in China 2025” (From low
cost labor country to advanced
technology leader): This initiative has
the objective to turn China from a
low-cost developer to a
manufacturer of high-end and high-
tech products. The program has a
big impact on China’s high-tech
capabilities. In 2020, China ranks
14th among the 131 economies
featured in the “GLOBAL
INNOVATION INDEX RANKING”.
Source: https://www.wipo.int/
Global Innovation Index Ranking

TECHNOLOGICAL
- Availability and rapid of cheap
and efficient technology
→ Access high-tech products at
cheaper prices than other
developed countries
- Power of the Internet: China
has a large number of online
purchases. For food products,
the number of online sales has
dramatically increased in
recent years.
Source: Forward Business and Intelligence
Transaction Volume of China’s Fresh
Food E-Commerce Market 2013-2019

TECHNOLOGICAL
- Technical education: China
has become one of the
largest providers of highly
skilled personnel. The
country has increased the
quality of its education and
is now able to deliver many
engineers and scientists
every year.

LEGAL
- The Chinese legal system differs from the ones in western countries.
The legal systems in Hong Kong, Taiwan and Macau are different
from the systems in China itself.
→ If any company is planning to do business in China, they should
hire an experienced legal advisor who knows the Chinese legal
system and business laws.
- China has a strict legal system, so the business development
process can be guaranteed through many basic protections:
Intellectual property rights, patent protection, unfair competitive
prevention, consumer rights protection.

LEGAL
In 2017, the latest version of the
Encourage Investment
Catalogue was released in
China. The industries
(including dairy sectors) on the
Catalogue are facilitated by
the government to streamline
procedures in the approval
process, discounted prices for
investment in land and
preferential tax treatment.

LEGAL
- Restrictions to Foreign Companies: China restricts foreign (and
especially western) companies to operate in China.
Aside from these blockades, there are many other restrictions for
foreign companies, including Foreign Investment Negative List, a
Market Access Negative List and also the Trade tariffs.
- Intellectual property rights: China has a strict and developed IP
protection system. Despite being member of the WIPR, intellectual
property rights held in other countries are not automatically
protected in China when patent/trademark is not registered at the
applicable Chinese institutions.

EnVIRONMENTAL
- China is home to 22 of the world’s 50 most polluted cities. As a result,
pollution is blamed for 1.6 million deaths in China per year.

EnVIRONMENTAL
- Air pollution: China is the
world’s largest producer of carbon
dioxide emissions. China passed
the US for this distinction in 2006,
according to the Netherlands
Environmental Assessment
Agency. These carbon dioxide
emissions have begun to fall
again, but there’s still a large gap
between China and the U.S.
Source: BP Statistical Review of World Energy
Carbon Dioxide Emission (1966 - 2016)

EnVIRONMENTAL
- Water Pollution: Water sources in China are contaminated by
industrial waste. 85% of China’s groundwater is rated as “bad” or “very
bad”.
Source: China Water Risks, MEE
State of Ecology & Environment
Report 2017 - 2018 and State of
Environment Report 2012 - 2016
Groundwater Quality Deterioration
(2012 - 2018)

Market’s
Potential
Indicators

OPPORTUNITY BARRIER
ENTRY
INFRASTRUCTURE
REQUIREMENT
Market’s Potential
Indicators

Country Notebook | Market’s Potential Indicators
OPPORTUNITY
Large dairy consumption:
China’s annual
consumption of fluid cow
milk ranks fourth in 2020. In
2018, it reached
22.5kg/person. It also ranks
second in the world (after
the US) in dairy purchases
with a total value of about
60 billion USD.

OPPORTUNITY
China’s internal supply doesn’t meet its
demands:
- China's domestic milk supply currently
only meets 75% of demand → China has
to import milk from many international
supplies.
- The cost of domestic milk production in
China is higher than the global average.
→ The production of dairy products
produced in China grew slowly from 2017
to 2018.

OPPORTUNITY
Increase trend in China’s imported dairy
products:
- In 2018, the import quantity of dairy
products in China reached 2.74 million
tons, import value reached 10.65 billion
USD.
- In 2019, China imported 3.94 million
tons of milk and dairy products, of which
fresh milk imported about 750,000 tons.
→ China's milk import demand will
continue to increase.
Volume of whole milk powder
imported to China (2015-2020)
Source: Statista

BARRIER ENTRY
Tariff: The tariffs used to be barriers to exporting to China. But in
recent years the policy barriers are relatively low. China has
announced that it is reducing import tariffs on a range of
agricultural products in 2020. On the dairy side, the reductions
include whey and most cheese, except for fresh cheese and curds.
Tariffs for Import
into China
Source: USDA

BARRIER ENTRY
Competitor: Dairy market in
China has been very dynamic
and competition has intensified,
which makes TH Group to
compete with competitors not
only inside but also outside of
China.
Source: Statista
Market share of leading infant milk formula
companies in China as of 2020

INFRASTRUCTURE
REQUIREMENT
China’s Food Safety Law (FSL)
China faced a scandal of melamine-tainted milk in 2008, seriously
affecting customer trust.
→ The Chinese government has introduced the strictest regulations
on milk production in the world. Products put on the market must
pass the safety test of the Food and Drug Administration of China
(FAD).
→ As the leading fresh milk enterprise in Vietnam, TH Group has met
China's food safety criteria, confidently exporting officially through
the most prestigious distribution channels in this country.

INFRASTRUCTURE
REQUIREMENT
Customs procedures
The “Regulations of the People's Republic of China on Place of Origin
of Imports” require a certificate of origin.
- Most goods are only subject to the “Automatic Licensing System” on
import.
- For the food products, exporters and importers must register
through the customs “Registration Systems of Imported Food and
Cosmetic Importers and Exporters” and separately through the
“General Administration of Quality Supervision Inspection and
Quarantine (AQSIQ)”

INFRASTRUCTURE
REQUIREMENT
Labelling Requirements
The Labelling of foodstuffs including dairy
products is based in particular on the Chinese
“Regulation on the Supervision and
Administration of Dairy Product Safety”.
Importers must label mandatory information
(including the product name, ingredients,
net weight,...) in Chinese. If information on
the label is incorrect or if a Chinese label is
missing, an import can be refused.

INFRASTRUCTURE
REQUIREMENT
Media
- China blocks social media such as
Facebook, Twitter, YouTube and Instagram,
and search engine Google. → TH has to use
the internal platform such as Weibo to
launch their marketing campaign.
- TH Group has to pay attention to
Advertising Law of China, avoid false
information, provide truthful, lawful,
“healthy & positive” advertising.

INFRASTRUCTURE
REQUIREMENT
Distribution:
Food companies may look for a local
Chinese partner as an importer and/or
wholesaler that can provide assistance
with the compliance regarding Chinese
regulatory requirements as well as
distribution, marketing etc. However, with
indirect exporting, TH has faced
difficulties in managing markets as well as
distribution systems.

GLOBAL
STRATEGY
MARKET ENTRY
ANALYSIS
MARKETING
PLAN
COMPANY STRATEGY

GLOBAL STRATEGY
Has strong and prestigious brands
Country Strategy | Global Strategy
→ Use Branding Strategy
“SUA SACH” “HANH PHUC DICH THUC”

BRANDING STRATEGY
- Main media message:
“Tinh tuy thien nhien duoc giu nguyen ven trong tung giot sua sach”
- Sub media message:
● Health: the drops of milk distilled from nature through a closed
process brings essential nutrients to people’s health
● Body and style: maintain and improve body. Create a feeling of
lightness, health, youthfulness and attractiveness in the person.

BRANDING STRATEGY
→ TH is the first company that
declares they produce “sua
sach” - a standard aspect of
dairy products - and they are
one step ahead of their
longtime rivals when TH does
this thing.
→ TH True Milk is prior to
choosing markets that really
need fresh milk and it estimates
that China is an ideal market.
(Also known as
The Law of Mind)
Preemptive claim

MARKET ENTRY ANALYSIS
Country Strategy | Market Entry Analysis
Exporting
Disadvantages:
- Low profit margin as profit will be
divided among parties;
- Depend deeply on the
commitment with the partner;
- No direct customer contact;
- Unable to provide adding-value
services;
- Uncontrollable marketing

Market Entry Analysis
Exporting Wholly Foreign-
Owned Enterprises

Wholly Foreign-Owned
Enterprises
- Automotive: Streamline decision making and eliminate the risks
associated with choosing the wrong business partner.
- Legal status: WFOE is a legal person under Chinese law & has limited
liability.
- Revenue and remittance: Earn money in China and profits can be
remitted back to the investor’s home country.
- Business Activity: Conduct direct business activities.
- Hiring: Can employ both foreigners and local Chinese directly.
- Incorporation & timing: Establishment is difficult & takes much time.
- Defining what your business will do: Limit companies’ ability to
adjust their business strategy.

MARKETING PLAN
Country Strategy | Marketing Plan
PROPOSITION PRODUCT PLACE
PRICE PACKAGING PROMOTION

PROPOSITION & PRODUCT
Proposition: Supplying products from clean, safe, organic agriculture
with the strictest standard from nature to ensure the public health
Product: Milk that TH exports into China is still the one sold in
Vietnam and just different from the package with Chinese language
because of the same production chain.

PLACE
Key Account Channel
Supermarkets
Others
- TH True Mart system;
- An e-commerce system to order
online on the website or via hotline,
deliver and pay at home, free
shipping with the message “Mang
tinh túy thiên nhiên đến tận nhà”
The company distributes directly
for retailers with a discount
depending on the size and
quantity of the supermarket.
Traditional channels
The distinct pieces in the
distribution channel including
producers, wholesalers and retail
outlets work together as a unit to
deliver products to end users
TH True Milk distributes to
restaurants, hotels, schools, trade
unions, etc. This is also the channel
that Vinamilk - TH True Milk's
biggest competitor is applying

PRice
Identifying TH True Milk as a premium
product line, TH should choose the
highest possible pricing strategy, trying
to influence consumers' psychology in
the interaction relationship between
price and quality. Currently, the price of
TH when using the export method is
about 13.90 yuan (nearly 50,000 VND), a
reasonable price compared to the
average milk price in China and the
product quality of TH True Milk.
Two percent milk price
(1 liter, 03/2021)
Source: GlobalProductPrices.com

PACKAGING
- The finished milk is packaged in 6-layer
sterilized paper bags in a completely
sterile environment, each layer has a
different function. → Pasteurized milk
products are safe and have an expiry date
up to 6 months without the use of
preservatives and cold storage.
- Pasteurized fresh milk products have
packaging of Tetra Pak (Sweden) and SIG
Combibloc (Germany) (manufactured on
modern technological lines and most
advanced in the world).

PACKAGING
- For fresh milk product packaging:
● The upper half is the image of the sky
with clouds → Create freshness
● The lower half is the text including the
brand name and some information
with moderate font size → space
evokes spaciousness and a sense of
immensity and limitlessness.
- Packaging remains the same as product
samples in Vietnam, only some important
information is translated into Chinese.

PROMOTION
Advertising: With the slogan "TH True Milk – Thật sự thiên nhiên",
among communication activities in general and advertising in
particular, TH True Milk sends the message "Tinh túy thiên nhiên
được giữ vẹn nguyên trong từng giọt sữa tươi sạch”.
Activities that TH can perform such as:
● Broadcast TVC on TV channels with large viewership (especially
women, families): CCTV, Hunan Television, Phoenix Television, etc.
● Newspapers: targeting women and business audiences in
newspapers such as People's Daily, Global Times
● Outdoor billboards such as banners, subways billboard, buses
billboard.

PROMOTION
Public Relation:
- Maintaining the culture and campaigns that TH does in Vietnam, TH
True Milk's PR activities are still associated with social activities,
community development and programs associated with young
children, closely approaching consumers as well as building TH's
image in a new market.
- In addition, TH can organize competitions for children, social games
to raise awareness for children, and educational programs.

PROMOTION
Sales promotion:
- With the effect achieved, TH should continue to use sales promotion
activities such as: trial, direct promotion on the price, combo, buy 2
get 1 free or buy 1 milk bottle get 1 yogurt box, or collect stickers in
exchange for comics,...
- Although sales promotion leaves many negative sides such as
causing waste to the budgets of firms, the race is so fierce that
brands get caught up in the vortex of stimulating demand for
customers. Therefore, TH should offer an appropriate budget and
select programs and activities corresponding to the set budget.

THANKS
GROUP 6:
Lê Ngọc Bảo Duyên
Trần Mỹ Linh
Dương Huỳnh Ngọc
Nguyễn Ngọc Anh Thư
Please keep this slide for attribution
CREDITS: This presentation template was created by Slidesgo, including
icons by Flaticon, and infographics & images by Freepik

TH True Milk in China.pptx

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to TH True Milk in China.pptx

Similar to TH True Milk in China.pptx (20)

Recently uploaded

Recently uploaded (20)

TH True Milk in China.pptx

Editor's Notes