Introduction
****As the instant noodle market shifts toward high-end products, local and foreign brands are gaining momentum. With new product offensives and the repositioning of established brands like Uni-President, the old market structure where Master Kong holds half the market and Uni-President, Jinmailang, and Baixiang compete for second place may be disrupted. Will the rankings of instant noodle companies see new combinations?
Source: Beijing Business Today The "New Rich" of Instant Noodles Make Their Move In addition to familiar brands like Master Kong, Uni-President, and Wugu Daochang, some new brands have recently appeared on the market and are attracting attention. For example, high-end instant noodles launched by brands such as Jiu Jiu Ai and Baijia are priced even higher than the high-end products of Master Kong and Uni-President. For instance, a 231g Jiu Jiu Ai six-grain pickled pepper beef noodle is priced at 20.9 yuan. These niche brands are now coming on strong. Who are they? According to research, Jiu Jiu Ai is a subsidiary of Haoji Group. In 2011, Haoji Group launched a multigrain instant noodle—Jiu Jiu Ai brand non-fried multigrain instant noodles. The launch of Jiu Jiu Ai non-fried multigrain instant noodles marked a shift in Haoji Group's main product focus from its previous Haoji chicken essence to multigrain instant noodles. This brand's instant noodles are priced high and mainly sold in Sichuan and other regions. It entered the Beijing market during the 2014 Spring Festival and announced plans to expand nationwide that same year. Another high-end instant noodle brand, Baijia, comes from Sichuan Baijia Food Co., Ltd. This company is the largest producer of instant vermicelli in China. Baijia vermicelli announced its entry into the non-fried instant noodle market in 2008. According to information, Baijia instant noodles previously produced low-end products. A Baijia instant noodle representative stated that due to the recent trend of the instant noodle market shifting toward high-end, Baijia launched a high-end series. In addition to the activity of the "new rich," foreign brands have also shown unprecedented enthusiasm. Nongshim, Nissin, and other foreign brands are visible everywhere, with prices around 6 yuan or above. Foreign brands have significant ambitions for the domestic instant noodle market. According to data, Japan's Nissin Foods plans to double its direct-sales outlets in China by 2018. The company also plans to expand outlets in 60 cities with populations over 3 million, including Beijing, Tianjin, and Chongqing. What Are the "Veterans" Doing? In fact, the instant noodle industry has always been highly concentrated, with Master Kong, Uni-President, Jinmailang, and Baixiang consistently holding over 80% of the market share. Facing the impact of foreign brands and new domestic products, what are the "veterans" of the instant noodle industry doing? Industry insiders say that after ending the price war, Master Kong and Uni-President have shown a trend toward high-end transformation, and their products were quickly distributed in the first half of this year. The other two companies, however, appear relatively quiet in the market. According to Baixiang's official website, its latest product information is the launch of Baixiang Big Bone Noodles, which was over a year ago. Jinmailang, on the other hand, is still following the route of "more quantity, same price." Its recent launch of Dajinye Noodles boasts "6 bags equal 7 bags." It is understood that Dajinye Noodles is an upgraded version of the previous Jinye Noodles and is currently Jinmailang's main product. A Beijing Business Today reporter found that this product is still priced in the low-end market, at about 1.7 yuan per 100g (bagged). In the high-end instant noodle segment, Jinmailang has yet to launch a product that leaves an impression on consumers. Currently, compared to Uni-President's active performance in the emerging high-end instant noodle market, Baixiang and Jinmailang's strategies have not kept pace with market development. It is understood that Jinmailang still follows a low-end product route and seems indifferent to the increasingly popular high-end market. A Jinmailang insider said that Jinmailang is competitive in the low-end market and will not develop high-end noodles in the future. Baixiang's situation is even more bleak. When visiting large chain supermarkets, reporters found it difficult to see Baixiang instant noodle products. An industry insider said that due to the slow product update speed and strategic positioning failures in recent years, Baixiang's instant noodle performance has almost stalled. According to data, in 2014, Baixiang not only terminated its listing plan but also withdrew its Beijing branch. A Shakeup Is Coming According to Liang Mingxuan, a food industry researcher at CIC Consulting, with the upgrading of consumer demand and the slowdown of low-end instant noodle development, the trend toward high-end is irreversible. High-end products will become another "battlefield" in the instant noodle market. With the increasing number of participating companies and continuous product innovation, the old market structure may change. In the view of more industry insiders, this structural change will first be reflected in the consolidation of the second-place position. Previously, the domestic instant noodle market structure was as follows: Master Kong, Uni-President, Jinmailang, and Baixiang held 80% of the domestic market share, with Master Kong holding 50%. Even though Uni-President's instant noodle business turned profitable, its total revenue is less than half of Master Kong's, and the gap with the industry leader remains large. Master Kong's leading position is unlikely to be shaken in the short term. However, the "runner-up" position is becoming clearer as Uni-President focuses on high-end products. According to AC Nielsen data, Uni-President's market share reached 17.9% in 2014. Zhu Danpeng said that the price war between Master Kong and Uni-President directly hurt Baixiang and Jinmailang, which focus on the low-end market, with their annual revenue growth falling below 10%. "Uni-President's market share is already significantly higher than the other two. Now, Uni-President has seized the opportunity to enter the high-end market and used high-end products to turn its instant noodle business profitable. Currently, Uni-President has firmly secured the 'runner-up' position in the instant noodle market." Zhu Danpeng further stated that compared to Uni-President, Jinmailang and Baixiang are in an awkward position. If these two companies do not make a move within a year or two, their market share may be carved up by Master Kong and Uni-President, which still have advantages in the low-end market. In addition to the high-end transformation helping Uni-President secure the second position, the overall instant noodle market is also showing a trend of polarization between high-end and low-end. As a Jinmailang representative noted, high-end products do not fit Jinmailang's consumer positioning, so it will not enter the high-end segment in the future. Therefore, in the low-end market, the four-way split among Master Kong, Uni-President, Jinmailang, and Baixiang will continue. However, in the high-end market, since all companies are in the early stages and fighting independently, no true winner has emerged. "In another year, the market share of high-end instant noodles will become clearer, and as the high-end market continues to expand, the newly formed rankings will further impact the original structure, leading to a new round of industry reshuffling," an anonymous instant noodle company insider told reporters. 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