P&G, Yili and Mengniu top brands in reaching Chinese consumers, survey finds

PUBLISHED : Friday, 02 December, 2016, 7:20pm
UPDATED : Friday, 02 December, 2016, 7:20pm

Procter & Gamble, Inner Mongolia Yili and China Mengniu Dairy topped the ranks of fast moving consumer goods (FMCG) companies that reached the most Chinese households in 2016, a survey found.

The country’s two biggest dairy giants – Yili and Mengniu – each reached 146 million urban Chinese families in the 52 weeks ended October 7, meaning 88 per cent of households in Chinese cities had purchased at least one item from the two brands, data from retail marketing data provider Kantar China found.

They were only second to Cincinnati-based P&G, the world’s largest consumer multinational that achieved a penetration rate of 93.4 per cent with dozens of brands under its umbrella including Crest, Head & Shoulders and Oral B.

Swiss-based food manufacturer Nestle, known for its instant coffee and infant formula, snatched the fourth spot, followed by Tinyi Holding’s Master Kong – the top selling instant noodle brand in China.

Among the top 10 companies boasting the biggest Chinese customer base, Cola Cola and Master Kong were the only two whose market penetration had diminished in 2016. with each dipping 0.9 per cent, according to the report issued on Thursday.

Chinese consumers yearning for a healthier lifestyle bolstered demand for premium dairy products, but battered demand for instant noodles and beer – commonly seen as contributing to health problems like obesity.

Eight years after the 2008 Chinese milk scandal that damaged the reputation of Chinese food exports and propelled a consolidation in the domestic dairy sector, consumers have built up some confidence in home-grown players that partner with western peers.

Mengniu deepened its ties with French dairy behemoth Danone, buying the latter’s Dumex Chinese infant formula brand last year and selling a more than 10 per cent stake to its Paris-based rival in the past few years.

Meanwhile, Yili inked deals with American dairy farmers and invested in baby formula projects in New Zealand, aiming to source milk directly from overseas. It also splashed out millions of yuan to make an appearance in the Hollywood blockbuster movie Transformers 4.

Official figures indicated the combined market share of domestic infant formula brands in China increased to 53 per cent in 2015 from 40-45 per cent from 2008 to 2014.

Since the contaminated milk scandal that rocked the entire nation, Chinese mothers have scrambled to empty shelves of expensive foreign-made milk power amid food safety fears.

Both Mengniu and Yili had been struggling to recover from the milk scandal of 2008 when their liquid milk products were found tainted with poisonous chemicals. Soon after the contamination was discovered, the two firms were stripped of their status as “Chinese national brands”.

business-article-page