---
title: "Breaking | Haitian Enters Edible Oil Market, Priced 20% Above Competitors, Will Launch Rice and Flour in the Next 1-2 Months!"
description: "Yesterday, the author learned from a distributor of Haitian Weiye that Haitian has launched a new edible oil brand, \"Oil Commander,\" with soybean and corn oil products in 4.9L small packaging, targeting high-end family consumption with a focus on health and zero additives. Notably, the wholesale price per case for these two products is as high as 260 yuan and 272 yuan respectively, with distributor prices around 240 yuan after policy deductions, compared to about 190 yuan for similar competitor products. The distributor also revealed that Haitian will continue cross-category expansion, launching rice and flour products in the next one to two months."
author: "陈峰"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2021-01-19"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/8ZIYoInktAcU7hbm2NzStg"
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---

# Breaking | Haitian Enters Edible Oil Market, Priced 20% Above Competitors, Will Launch Rice and Flour in the Next 1-2 Months!

> Yesterday, the author learned from a distributor of Haitian Weiye that Haitian has launched a new edible oil brand, "Oil Commander," with soybean and corn oil products in 4.9L small packaging, targeting high-end family consumption with a focus on health and zero additives. Notably, the wholesale price per case for these two products is as high as 260 yuan and 272 yuan respectively, with distributor prices around 240 yuan after policy deductions, compared to about 190 yuan for similar competitor products. The distributor also revealed that Haitian will continue cross-category expansion, launching rice and flour products in the next one to two months.

Yesterday, the author learned from a distributor of Haitian Weiye that Haitian has launched a new edible oil brand, "Oil Commander." Currently, it has launched soybean and corn edible oil products in 4.9L small packaging, positioned for high-end family consumption, emphasizing health and zero additives.
It is understood that the reason Oil Commander does not directly use "Haitian" as the brand name is that the trademark for Haitian in the edible oil field has already been registered and used by another company called Qinglong Hi-Tech Oil Co., Ltd.
It is noteworthy that **the wholesale price per case for these two products is as high as 260 yuan and 272 yuan respectively,** **after deducting policies, the distributor's purchase price is about 240 yuan.** **It should be noted that the purchase price for similar competitor products of the same level and specification from other first-line grain and oil brands is generally around 190 yuan.**
In addition, the distributor also revealed that **Haitian will continue to operate across categories in the future, and will launch rice, flour, and other category products in the next one to two months.**
As a leading seasoning company, Haitian's entry into the grain and oil category reminds me of the grain and oil giant that also ventured into seasonings, whose market value has surpassed Haitian: Yihai Kerry. In recent years, Yihai Kerry has cooperated with the famous Taiwanese soy sauce brand Wuan Chuang, laying out its seasoning business, releasing a series of soy sauce products, and also expanding into other categories such as vinegar and sesame oil.
What puzzles me is whether Haitian's layout in grain and oil is a counterattack against Yihai Kerry's foray into seasonings. Why are both parties entering each other's categories? And what is the prospect?
**-01-** **Two "Oil Kings" Cross Categories, Seeking New Growth?**
Actions like Haitian selling edible oil and Yihai Kerry selling soy sauce are undoubtedly driven by the pursuit of new growth, as companies aim for profitability and would not invest resources and energy in new categories and brands without purpose.
Although Haitian and Yihai Kerry's main categories are essential products that traverse economic cycles, and they are dominant brands in their respective fields with clear advantages in capital, technology, brand, and channels, behind this "high certainty" good business, they also face limitations in overall industry space and other issues.
Haitian has advantages in the seasoning market, but its low- and mid-end products account for a relatively high proportion. In the current seasoning market, whether from raw material prices or consumption trends, mid-to-high-end products have more market prospects. Competitors Lee Kum Kee and Zhongju Hi-Tech perform better in the mid-to-high-end market.
Moreover, securities reports show that although Haitian's sales market share is 20%, when converted to retail caliber, the market share drops to 7.3%. These factors undoubtedly cause some anxiety for Haitian.
Although Yihai Kerry has nearly 40% market share and a seemingly more solid brand position, its category is related to people's livelihoods, and prices are strictly controlled. Furthermore, due to unstable costs (mainly soybean purchase prices), Yihai Kerry's edible oil main business has weak profitability and limited imagination space.
For example, in 2019, with revenue of 170.743 billion yuan, net profit was only 5.4 billion yuan, with a net profit margin of less than 3.2%. Therefore, it is inevitable to develop products with higher profit margins.
"It is inevitable for Haitian to do rice, flour, grain, and oil; as a listed company, the pressure for annual growth is significant," a Lee Kum Kee distributor replied to the author regarding Haitian selling edible oil. Yihai Kerry, whose market value once soared to over 700 billion within months of listing, likely faces the same pressure.
So why do they invade each other's main businesses? This can be explained by the attributes of their main categories.
**-02-** **High Adjacency of Categories**
**From a channel perspective, seasonings and grain and oil are industries with high channel barriers. Both Yihai Kerry and Haitian have high-density channel coverage, establishing good cooperative relationships with many catering companies through selling their main products. With existing channels, consumers can quickly access new products.**
Seasonings and grain and oil are both part of the "big kitchen" market, with almost identical consumer groups and consumption scenarios. The high adjacency of categories allows for efficient reuse of channels and resources, so it is not difficult to understand why they choose to enter each other's fields.
Not only that, **from the supply chain perspective, they belong to the same industrial chain. In terms of raw materials, Yihai Kerry is originally a food-grade soybean meal processor, and soybean meal is the main raw material for soy sauce. In fact, Yihai Kerry has long been the main supplier of food-grade soybean meal to domestic well-known soy sauce producers such as Haitian and Lee Kum Kee.**
Source: Prospectus
From this point, Yihai Kerry's move into soy sauce seems natural, as it is a reasonable reuse of its own main by-products. In fact, not only Yihai Kerry, but also leading edible oil companies such as Luhua, Changshouhua, and Dali have launched their own seasoning products.
**Haitian's advantage in the chain seems less obvious than Yihai Kerry's, and the purpose of making edible oil may be more to supplement its product line.**
**-03-** **Is Haitian Selling Oil a Good Business?**
**Back to the point, are these "new" category businesses of the two giants good or bad? The author conducted some interviews to hear how securities analysts and distributors view "Haitian selling edible oil."**
A well-known chief securities analyst in the industry said:
If the products and pricing are not problematic, Yihai Kerry's seasonings and Haitian's grain and oil should have a certain market, because raw materials and channels can be reused, and brand strength has a good foundation. **But from a long-term perspective, I am not optimistic about Haitian and Yihai Kerry doing these cross-category businesses.**
**From the consumer's perspective, consumer cognition of categories is divided; in the future, consumers will only favor more professional consumer brands. Social division of labor also determines that everyone can only do what they are best at. The category strategy in the United States is like this, and the future development of Chinese enterprises will also move in this direction.**
So I personally believe that Chinese companies should not blindly pursue scale, and brands that do everything but are not refined will eventually be divided by those who specialize in one thing.
The author also learned from a Haitian Weiye distributor, Mr. Zhou (pseudonym), that the Oil Commander launched this time is not only expensive, but other brands' similar competitor products in 5L specification have a purchase price of around 190 yuan, while Haitian's Oil Commander, after deducting manufacturer support, still costs nearly 240 yuan, and the specification is 0.1L less than competitors.
Mr. Zhou explicitly told the author that he is unwilling to sell this product. He also revealed that **he is not optimistic about Haitian's hot pot base "Haitian@me" series and compound seasoning "Shortcut" series. Although these products have fashionable packaging, they are not "down-to-earth," consumer feedback is average, and prices are significantly higher than competitors, making it difficult to have repeat customers, with many terminal returns.**
Mr. Zhou bluntly said: "I can't quite understand the logic behind Haitian's new products. Not to mention differentiation in product innovation, if they could just be comparable to competitors, relying on Haitian's golden signboard could also supplement the category, but these products are priced too high, and Oil Commander cannot even directly use the Haitian brand, making it hard for me to be optimistic about its market performance."
The above is the current market situation. **Regardless of whether Haitian has misjudged consumer demand or whether the product quality is indeed excellent and worth the high price, from a market logic perspective, as a follower, without long-term brand planning and strategic goals, blindly pursuing high-end positioning is not a wise move.**
**In general, the business overlap among companies and brands in the seasoning and edible oil fields is increasing. Regardless of long-term results, sparks are inevitable in the current situation. What is your view on this? Welcome to leave a comment and share your opinion.**
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