CCM: Evolution of Dairy Marketing in E-commerce Channels 10-25-2016

Summary: As online shopping has become such a strong trend, dairy companies are increasingly developing their e-commerce strategies, with Huishan Dairy focusing on mobile purchasing and New Hope Dairy exploring crowd funding.


Source: Internet


Low prices and convenience have made online shopping the preferred choice for more and more consumers, meaning that dairy companies need to increasingly focus their efforts on e-commerce promotion and marketing.


It was not so long ago that dairy products selling online mainly referred to infant formula. In May 2014, Yili launched its pure milk on Tmall, where in just 80 minutes consumers bought 699,976 cartons (around 50,000 cases in total). This notable success opened the way for other suppliers to launch their liquid milk products online.


In March this year, Heilongjiang Feihe Dairy Co., Ltd. (Feihe Dairy) launched its Supernova infant formula, a product that is only supplied online on its official website and through e-commerce sites such as Tmall, YHD etc. The company stressed its intent to establish direct connections with its customers, highlighting its new selling points – zero inventory and rapid supply from the place of origin and in less than 28 days from production date. 


Less focused on the major e-commerce platforms like Taobao and JD.COM, China Huishan Dairy Holdings Co., Ltd. (Huishan Dairy) appears to be placing greater emphasis on Chinese consumers’ noted propensity to buy products using handheld electronic devices such as mobile phones. The Shenyang International Fresh Milk Festival was held on 17 June – this was an event run by non-governmental organisations, where entrepreneurs and academics gathered to discuss ideas around growing milk consumption for health. At this meeting Huishan Dairy delivered fresh milk to consumers through an efficient cold chain after they scanned the Quick Response code to add “Huishan Fresh Delivery” (public number) to the WeChat app to make their orders. Whilst clearly a limited exercise in terms of its intended scope, the activity was judged to have been very successful.


New Hope Dairy Holdings Co., Ltd. (New Hope Dairy) is now even looking at crowdfunding. In November last year it joined up with SFBest - an e-commerce platform operated by S.F. Express to launch the “Win Farm” online milk store, where the orders divide into “I want it” and “I want to give it to others”:

 

  • “I want it”: After filling in the delivery information, consumers can share it on Moments (a platform for sharing on WeChat) or with specific friends. Consumers can decide to pay through a third person or by "crowdfunding" amongst friends
  • “I want to give it to others”: After payment, the products are sent to friends as gifts.


Chen Hao, General Manager of New Hope Dairy, said: “Win Farm broke conventions by integrating with consumers in an innovative form of marketing”.


Shijiazhuang Junlebao Dairy Co., Ltd. has been a leader in developing e-commerce marketing for dairy products. Liu Senmiao, General Manager of its Milk Powder Business Department, has analysed the current scale and potential of selling infant formula online: “In 2010, online shopping for infant formula only accounted for 10% of sales, the remaining 90% being sold through traditional channels. However, the online share had grown to 24% by 2013 and I believe it will certainly exceed 30% in 2015”.


 


About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.

 

For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606. 



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