As the second China International Import Expo (CIIE) was opened yesterday, it was time for foreign food manufacturers to showcase their offerings to Chinese consumers. This year, in addition to showcasing multiple imported products at the expo, leading multinational snacks company Mondelēz International also launched an overseas flagship store on Tmall. Foodinc noticed that, multiple products from Cadbury, which was once difficult to be found in the China market, also appeared at the expo, indicating a high-profile return of the brand to China.
Joost Vlaanderen, President of Mondelēz Greater China, told the the press at the event today that Cadbury is a very important brand for Mondelēz International and he believed that it can satisfy Chinese consumers' needs for diverse products. Vlaanderen, who has been in that position for more than a year, also shared Mondelēz International's strategy for product innovation and marketing in the China market this year as well as his own views about future market growth and consumption trends.
Next let's take a look at the messages sent back by Foodinc.
Initiating cross-border e-commerce
Foodinc noticed at Mondelēz's booth today that products from Cadbury occupied a whole display cabinet. These Cadbury products from Australia were also available at Mondelēz's overseas flagship store. Prior to this, Cadbury chocolates were rarely seen in the China market for quite a long time.
For this, Vlaanderen said the CIIE was a good platform to showcase those products not directly available in China before, and Cadbury is exactly one of them.
"We want Chinese consumers to know more about this product, " he added. "Chinese consumers prefer diverse products, and Cadbury can meet this requirement."
According to Vlaanderen, the future strategy for Cadbury in China will be dependent upon market feedback for the brand in the cross-border e-commerce channel.
It is learned that the aforementioned overseas flagship store was launched on the same day the opening ceremony of the 2nd CIIE took place. This was also the first time for Mondelēz International to officially launch its cross-border e-commerce business. The company wants to showcase more imported products through this new channel, so as to have a better understanding of the China market. Foodinc found that, in addition to Cadbury, products from multiple other foreign snack brands including Ritz and Fonzies were also available in this store.
Vlaanderen also mentioned today that, although Mondelēz China generated a considerable share of its revenue offline, its growth mainly came from online sources. He also believes that e-commerce plays a role far beyond sales. E-commerce is a channel for the company's brands to connect with consumers and gain market insights. Its another important role is to help with the company's product innovation.
"E-commerce is indeed a very important platform, but its importance is not limited to sales, as it can also drive market expansion and the company's growth, so its role is multifaceted," he added.
One example of this is a new product combining mini Oreo cookies and nuts launched by Mondelēz and Tmall Innovation Center after they began to collaborate with each in May this year. It took five months from the ideation to development. Its name "Hugging nuts" (as literally translated from Chinese) was also solicited from the public.
It is learned that Mondelēz launched multiple combinations of the gift-wrapped "Hugging Nuts" prior to the "11.11" shopping festival. "'11.11' is not only an occasion for selling products, but also, more importantly, a testing platform. Through this platform, we can know who are buying our products and what are their preferred flavors," said Vlaanderen.
On crossover partnerships
It's not hard to find that this year Mondelēz International has obviously stepped up its effort to collaborate with partners in other industries. For example, Oreo launched Oreo Cornetto ice cream bar in partnership with Cornetto, a brand of Unilever, and also launched a series of co-branded products such as Oreo Bobo Ice in partnership with the tea drinks chain HEYTEA.
It is interesting that Oreo has also crossed over to Milka, another brand of the Mondelēz family, to launch two new products: Milka + Oreo crunchy chocolate and Milka + Oreo creamy chocolate.
"We found that crossover collaboration itself is of great interest to Chinese consumers. Everything that consumers are interested in is where we should give it a try,”said Vlaanderen. He further explained that, on the one hand, Mondelēz International wants to keep up with what's hot through crossover collaboration, and to keep its brands always relevant and connected with young consumers.
When talking about how Mondelēz International is managing to strike a balance between wholesome snacks and indulgent snacks, Vlaanderen emphasized that Mondelēz's purpose is to "empower people to snack right", which includes both wholesome snacks and indulgent snacks. Their only difference is that they serve consumers' different needs on different occasions. For example, Oreo launched packages of small separate portions, which allow consumers to enjoy great snacks while being mindful of how much they eat.
In addition, even the same consumer also has different consumption scenarios and the corresponding needs. He believes that Mondelēz as the industry leader must ensure that it can meet consumers' different needs on different occasions.
On the other hand, Mondelēz would adopt the right way to produce snacks. For example, it would purchase ingredients such as wheat and cocoa from sustainable sources.
Looking into the future of the China market, Vlaanderen believes that people's pursuit for wholesome snacks and consumption upgrading will become the potential growth opportunities for the company.
Foodinc previously reported that, Dirk Van de Put, CEO of Mondelēz International, disclosed at Barclays 2019 Global Consumer Staples Conference that Mondelēz was ramping up investments to build local jewels in regional markets and would localize their brands even more in the future. Today, Vlaanderen provided further details about that strategy.
He mentioned that this year Mondelēz's chewing gum and cookies businesses were performing very well and their growth was faster than the overall growth of their respective category in the China market, indicating an increase of their market share. Foodinc also noticed that, Mondelēz revealed at the analyst meeting for the first three quarters earlier that, driven by the impressive performance of its cookies and chewing gum businesses in the quarter, the company recorded a growth close to 10% in the China market. It was also the 9th consecutive quarter for the company to achieve growth in China.
"I think that the most important reason for our biscuit to achieve such a fast growth is that cookie products have become more relevant to Chinese consumers - in other words, cookie products are responding better to the hot spots in the China market," said Vlaanderen. Pacific biscuits have been in China for over 30 years. Recently, Mondelēz increased investments in branding and product innovation, and launched rice wafers with the flavor of purple sweet potato. This is not only aligned with Chinese consumers' preferred taste, but also closer to their understanding of what is healthy food.
In addition, he also mentioned the co-branded product with the Forbidden City as an example of local marketing innovation by Oreo.
Vlaanderen said that Mondelēz noticed a trend of Chinese consumers in taking pride in the Chinese culture. Therefore, Oreo partnered with the Forbidden City to develop six new Oreo flavors inspired by the dessert menu of the palace in ancient times. These new flavors are very much connected with the Forbidden City and associated with the cultural pride of Chinese consumers. This was a very good marketing case.
In fact, Mondelēz's innovation in the China market is influencing other markets around the world. Vlaanderen said that earlier MDLZ China launch Oreo Thin, which is thinner and more crunchy than ordinary Oreo cookies. When the company conducted a test in other countries for the product specially designed for Chinese consumers, it was also well-received by local consumers.
In addition, Mondelēz began to launch the Oreo music boxes on Tmall two years ago during the "11.11" shopping carnival, which enabled Oreo cookies to be connected with music and black technologies. When launched in other countries and markets later, they were also very popular.
"This demonstrated that (the China market) was not merely exporting product innovation, but also exporting innovation with marketing concepts," said Vlaanderen.