--- title: "Nestlé's Performance in Greater China Plummets, Yinlu Says It's Not to Blame!" description: "According to a report by Economic Voice's 'Company World' program, FMCG giant Nestlé is going through a difficult period in China. Based on Nestlé's latest fourth-quarter and full-year results briefing, 2016 sales were CHF 89.5 billion, up 3.2%, but organic growth was only 2.4%, below the company's target of around 5% annual growth. The decline in the Chinese market is likely a major factor affecting Nestlé's growth plans. According to the latest financial report, Nestlé's sales in Greater China in 2016 were CHF 6.54 billion, down 7.4% from 2015." author: "赵珂" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2017-02-23" language: "en" canonical: "https://xinjignxiao.com/en/articles/nestle-s-performance-in-greater-china-plummets-yinlu-says-it-s-not-to-bl-d86dea86/" markdown: "https://xinjignxiao.com/en/articles/nestle-s-performance-in-greater-china-plummets-yinlu-says-it-s-not-to-bl-d86dea86.md" original_source: "https://mp.weixin.qq.com/s/YwShGjTyHjIrza77eId2LA" translation: "https://xinjignxiao.com/zh/articles/%E9%9B%80%E5%B7%A2%E5%A4%A7%E4%B8%AD%E5%8D%8E%E5%9C%B0%E5%8C%BA%E4%B8%9A%E7%BB%A9%E5%A4%A7%E5%B9%85%E4%B8%8B%E6%BB%91-%E9%93%B6%E9%B9%AD%E8%AF%B4%E8%BF%99%E9%94%85%E6%88%91%E4%B8%8D%E8%83%8C-d86dea86.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/nestle-s-performance-in-greater-china-plummets-yinlu-says-it-s-not-to-bl-d86dea86/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # Nestlé's Performance in Greater China Plummets, Yinlu Says It's Not to Blame! > According to a report by Economic Voice's 'Company World' program, FMCG giant Nestlé is going through a difficult period in China. Based on Nestlé's latest fourth-quarter and full-year results briefing, 2016 sales were CHF 89.5 billion, up 3.2%, but organic growth was only 2.4%, below the company's target of around 5% annual growth. The decline in the Chinese market is likely a major factor affecting Nestlé's growth plans. According to the latest financial report, Nestlé's sales in Greater China in 2016 were CHF 6.54 billion, down 7.4% from 2015. According to a report by Economic Voice's 'Company World' program, FMCG giant Nestlé is going through a difficult period in China. **Based on Nestlé's latest fourth-quarter and full-year results briefing, Nestlé's 2016 sales were CHF 89.5 billion, up 3.2%, but excluding price effects, organic growth was only 2.4%, below Nestlé's own plan of around 5% annual growth.** **The decline in performance in the Chinese market is likely a major factor affecting Nestlé's growth plans.** According to the latest financial report, Nestlé's sales in Greater China in 2016 were CHF 6.54 billion, down 7.4% compared with 2015. Some analysts believe this may be due to the drag from Yinlu Foods. In 2011, Nestlé acquired a 60% stake in Xiamen Yinlu Food Co., Ltd. But starting in 2015, Yinlu's performance began to decline. Last year, Yinlu launched some new products, such as premium eight-treasure porridge with brown sugar and longan, and white fungus with rock sugar, as well as nut protein drinks, but so far there has been little effect. In fact, since 2015, FMCG giants have been having a tough time in China. In 2015, more than half of the food and beverage sub-sectors saw production decline compared with 2014, with typical fast-moving consumer goods such as instant noodles, cigarettes, and beer all showing negative growth. **Therefore, Nestlé is far from the only one suffering from declining performance in the Chinese market; many global FMCG giants have faced setbacks in China, including Coca-Cola, Unilever, Procter & Gamble, and even Ting Hsin International Group.** The latest financial reports show that in 2016, Uni-President's first-half revenue fell 2.4% year-on-year, while Master Kong's first-half revenue plummeted 13.94% year-on-year. Zhao Jingqiao, deputy director of the Chinese Academy of Social Sciences' Research Center for Service Economy and Catering Industry, believes that Master Kong's severe decline is partly due to macroeconomic influences, and partly because it needs to adapt to the current market environment of consumption upgrading. **Some commentators point out that the collective decline of FMCG giants is largely related to their outdated advertising and communication concepts.** Over the past 20 years, many FMCG brands have won the market through a single advertising positioning. For example, functional positioning: whitening for toothpaste, antibacterial for body wash, anti-dandruff for shampoo. But after more than a decade, these have become default functions for these product categories and no longer have novelty. Now emotional communication and resonance are becoming increasingly important, but FMCG giants find consumers increasingly elusive. **FMCG brands can no longer resonate emotionally with men and women of the post-80s and post-90s generations, making it difficult to attract consumers through emotional advertising positioning.** Gao Jianfeng, founding partner of Zhonglue Capital, believes that **the decline of FMCG giants is also related to market changes**; some niche brands are eroding the market share of traditional large companies, such as 'Laiyifen' in the food industry. These niche brands firmly occupy the hearts of new consumer groups, making the market fragmented, which makes it difficult for big brands like P&G and Unilever to attract new-generation consumers. Some viewpoints suggest that **the main force of current consumers has been updated; the new generation of consumers has more purchasing power and cares more about product quality rather than price;** they are true global citizens, studying abroad and traveling are no longer privileges enjoyed by a few; they have a broader vision and know what good things are; they like to express their preferences and trust word-of-mouth rather than advertising; they prefer to share through social media. Gao Jianfeng, founding partner of Zhonglue Capital, said that **in the Internet era, information flows completely horizontally, and the traditional top-down product promotion advertising model is becoming weaker; more interactive communication is needed. In segmented markets, small brands that communicate deeply with consumers are increasingly popular, while large brands find it increasingly difficult to operate single products.** -END- --- ## Copyright and AI use This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL. Contact: zhaobo258@gmail.com · +86 158 5481 7671