On August 25, Master Kong Holdings released its 2020 interim results. As of June 30, the company's revenue increased 8% year-on-year to RMB 32.934 billion. Profit attributable to shareholders surged 58.37% to RMB 2.38 billion, and net profit reached RMB 2.653 billion, up 47.26% year-on-year. The financial report shows that the instant noodle business generated revenue of RMB 14.91 billion in the first half, up 29.18% year-on-year. According to Nielsen data, the overall instant noodle industry saw volume growth of 5.6% and value growth of 11.5% in the first half. Master Kong's volume share was 42.9% and value share was 45.8%, both up year-on-year, maintaining its position as the market leader. Industry insiders marveled that Master Kong's performance surged against the trend during the pandemic, with instant noodles remaining popular. At this point, many might dismiss this as expected, given that the pandemic made instant noodles a hot commodity, making the strong financials seem inevitable. Of course, if you look only at this, it seems reasonable, but when you consider two other recent events, it becomes clear that the impressive performance is not simply due to a single external black swan event.
On September 2, Master Kong and China Aerospace held the "Aerospace Quality, Better Life—Master Kong Instant Noodle Handover Ceremony and China Aerospace Business Partner Signing Ceremony." Master Kong's "Braised Beef Noodles" and "Suda Noodle House" successfully became China's first space noodles. After three years of collaboration with China Aerospace, Master Kong used space noodles to exemplify aerospace quality and standards.
This is the first event, showcasing the synergy between enterprise and cutting-edge technology. The second event: On August 5, Master Kong was selected as an excellent case in the "UN Report" for its outstanding contributions to sustainable development, becoming a representative of the global Sustainable Development Goals. The report stated: "Master Kong's sustainable development efforts in the instant noodle industry chain are benchmark-worthy globally. Such an open attitude and achievements in encouraging upstream and downstream enterprises to learn together and improve the overall food safety management level of the instant noodle industry will also serve as a model for the industry." This is global recognition of Master Kong's contributions to the instant noodle industry. If you combine these three events, can you still simply attribute them to external factors? Every effect has a cause. Behind these three 'perfect' events, I think industry practitioners should dig deeper. Why Master Kong? Why did aerospace technology and UN recognition choose Master Kong? Is it just because the company is big? As an industry observer, I want to use the basic marketing 4P framework to analyze this, which might make it easier to understand.
-01- Product: Effort and Persistence Lead to the First "Space Noodle" Master Kong was founded in 1992 and has been around for nearly two decades. Without quality products as a foundation, it couldn't have come this far. Without quality, a company has no value for sustainable survival. Master Kong has always maintained high standards and strict control over product quality, investing up to RMB 500 million to establish an international-level food safety testing center, with a food safety management team of over 3,000 people, conducting more than 3.5 million tests on raw materials and final products annually. I remember reading an industry article that said, "The instant noodle industry has no technical content, no moat, and no secret recipes." I want to say: never use your existing knowledge to challenge others' professional fields, because that is their livelihood, and they are definitely deeper and more insightful than you.
For example, Master Kong's products contain advanced "aerospace technology." Master Kong applies FD freeze-drying technology and RP technology, used in aerospace, to instant noodle development. FD freeze-drying technology is mainly used for the "dehydrated vegetable packets" in instant noodles. It locks in the nutrition and flavor of vegetables, easily restored through "rehydration." RP technology maintains the "color, aroma, taste," and nutritional components of food for a long time, preserving the original flavor and texture of ingredients.
The saying "Food safety ensures national safety" reflects what Master Kong is working on: ensuring every bowl of instant noodles is safe, nutritious, and delicious. Correctly understanding the instant noodle industry is an unshirkable responsibility for Master Kong as the industry leader.
-02- Price: Not Just Business, but People's Livelihood Behind price is consumer affordability, and behind affordability is the scale of target consumers. To meet the consumption needs of over a billion people, a diversified product portfolio across low, medium, and high price points is a necessary measure for Master Kong, as it must match the affordability of different consumer groups. Stabilizing the mass market, advancing a multi-price-band product strategy, consolidating high-priced noodles, developing premium noodles, and responding to consumption upgrades and health trends are the directions Master Kong has been continuously working on in recent years.
As the veteran in the instant noodle field, when considering pricing, Master Kong often does not look solely from its own operational or cost perspective, but rather evaluates what different income groups can afford. Hence, the basic product—Master Kong Braised Beef Noodles—serves as a staple food for Chinese people, like rice and steamed buns. And the premium product—Suda Noodle House—offers a dining experience comparable to a noodle shop, becoming a new choice for middle- and high-income groups. Not one-size-fits-all, but multiple faces for multiple people. It's not just about using different product specifications and flavors to satisfy different consumer groups, but also different price bands that consider the actual purchasing power of each group. Frankly, Master Kong is not just running a business; it's serving people's livelihoods. Serving hundreds of millions of consumers and meeting their needs is creating value for society.
Master Kong has been actively exploring digital transformation: during the pandemic, it used digital tools and O2O platforms to deliver safe and delicious products to consumers without them leaving home. It also partnered with Tencent to build a data middle platform to empower business operations, gradually using data to guide business management. As it embraces the upcoming 5G era, Master Kong, as a food manufacturing and sales company, will more actively embrace digital transformation to gain systematic support for its development.
-03- Channel: Adaptive Strategies That Change with the Times Regarding channel strategy, let's first talk about what just happened. According to insiders, from the early days of the pandemic, Master Kong monitored data changes daily and regularly adjusted work priorities. Because it anticipated potential inventory buildup and shortages, it promptly shifted sales focus from large offline supermarkets to O2O, online malls, and small convenience stores. At the same time, due to the high flexibility of its supply chain, Master Kong could continuously adjust based on the reopening of retail outlets. As Master Kong Holdings CEO Wei Chun-hsien explained: "During the pandemic, getting the right product to the right place at the right time and into the right hands was a huge challenge. We had to distribute appropriate quantities to all people across the country even when supply was insufficient." The result: within a few weeks of the outbreak, Master Kong's supply chain had recovered to over 50%, and it could supply 60% of reopened channels—three times more than its main competitors.
This is Master Kong's adaptive channel strategy. Of course, looking back, this is thanks to its "change with the trend" channel strategy. In 2018, Master Kong actively embraced the internet, using digital management concepts behind the internet to respond to changes in diverse scenarios. Using internet tools as a lever, it independently developed a digital channel platform and implemented responsive distribution. In short, it used efficient internet tools to increase sales and improve distributor efficiency.
In 2017, Master Kong upgraded its successful "channel refinement" strategy with further reforms: "Small headquarters, large branches; remove large regions, establish provincial regions; refine cities, jointly sell in counties; protect profits, focus on execution." Through these reforms, Master Kong effectively reduced communication costs with offline distribution partners and achieved efficient dialogue. Adapting to changes, not clinging to past success, and striving for reform are Master Kong's proactive measures at the channel strategy level. It is precisely this mindset of constant adjustment that enables rapid response during special times.
-04- Promotion: Doing Difficult Things, Doing the Most Valuable Things Here, "promotion" does not mean discounting, but rather promotional strategies to drive market development. In the past, the instant noodle category was often wrapped in negative perceptions. To break such perceptions, simply relying on advertising, information transmission, and memory-reinforcing communication is no longer effective in an era of information equality. To change such perceptions, you must start from the ground up, involve consumers in interaction and experience, let them see and touch, and only when consumers are willing to learn and accept can they correctly understand the instant noodle category.
From late October 2018 to early 2019, Master Kong used aerospace science exhibitions to fulfill the task of reshaping category perception. It is understood that Master Kong's aerospace science exhibitions have toured Xi'an, Lhasa, Jinan, Shenzhen, and other cities, attracting over 200,000 young visitors and over 100 million online viewers. These consumer engagements not only allowed them to see the technological progress of the national aerospace program up close but also showcased Master Kong's product development capabilities.
With high-quality products, telling the story well externally is not easy. Master Kong chose the approach of "planting trees for future generations" by using academically valuable science exhibitions to let more consumers understand the "aerospace-grade" quality of Master Kong products. In fact, this also plants a seed for a healthy category in the next generation. In his latest speech, Master Kong Holdings CEO Wei Chun-hsien proposed the "One-Two-Three" development strategy: "One system, two actions, three systems." Wei emphasized that the food and beverage industry, like aerospace, is a systems engineering endeavor. Master Kong deeply studies aerospace systems management and implements it in two actions: first, supporting youth aerospace science education; second, continuously promoting high-end R&D and technology transfer. In the future, it aims to build a comprehensive knowledge system, education system, and application system that integrate aerospace and food safety, enhancing the aerospace knowledge and food safety literacy of the public, especially young people. As a category representative and industry benchmark, outputting category value is far more indicative of leadership than simply talking about oneself.
The series of 4P actions above, when combined, not only enhance the brand awareness behind the name "Master Kong" but also build brand trust as the synonym for "China's first space noodle." "Trust" is like air: important but invisible in daily life. Only when tested does the power of brand trust emerge, becoming the strongest voice in consumption.
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