---
title: "No Price War! Uni-President Makes More Money in Mainland China"
description: "Uni-President Enterprises reported record first-quarter results, with revenue of NT$107.791 billion (approximately RMB 23.768 billion) and net profit after tax of NT$5.276 billion (approximately RMB 1.163 billion), up 99.85% quarter-on-quarter. Its mainland China business, Uni-President China Holdings, saw net profit surge 48% to RMB 380 million, driven by value marketing and healthy channel inventory management."
author: "New Distribution"
publisher: "New Distribution"
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published: "2019-05-12"
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---

# No Price War! Uni-President Makes More Money in Mainland China

> Uni-President Enterprises reported record first-quarter results, with revenue of NT$107.791 billion (approximately RMB 23.768 billion) and net profit after tax of NT$5.276 billion (approximately RMB 1.163 billion), up 99.85% quarter-on-quarter. Its mainland China business, Uni-President China Holdings, saw net profit surge 48% to RMB 380 million, driven by value marketing and healthy channel inventory management.

**Behind Uni-President's Strongest First Quarter**
Uni-President Enterprises recently released its first-quarter 2019 financial report, showing revenue of NT$107.791 billion (approximately RMB 23.768 billion), gross margin of 34.42%, and net profit after tax of NT$5.276 billion (approximately RMB 1.163 billion), up 99.85% quarter-on-quarter, rewriting historical records with impressive performance.
Among them, the mainland China business familiar to food industry professionals: Uni-President China Holdings Co., Ltd. (hereinafter referred to as "Uni-President China"), saw first-quarter net profit after tax of RMB 380 million, a significant increase of 48%.
In addition, Uni-President's convenience store business (Uni-President Supermarket) reported net profit after tax of NT$2.908 billion (approximately RMB 642 million), up 14.6% year-on-year, not only hitting a five-quarter high but also the highest for the same period in five years.

**Four Business Divisions Continue to Drive Growth**
Looking at Uni-President Enterprises' six business divisions, the food, convenience store, distribution, and grain divisions all showed positive revenue growth.
For the food division, Uni-President stated that both Taiwan Uni-President and Uni-President China adhered to brand value marketing, maintained healthy channel inventory, and optimized product freshness. In the first quarter, Uni-President China saw particularly strong sales of Tang Daren (Master Kong) instant noodles and Assam milk tea, driving the overall food division revenue up NT$763 million year-on-year, a growth of 2.6%.
Next, the convenience store division: Uni-President Supermarket's first-quarter net profit was NT$2.908 billion, up 14.6% year-on-year. Uni-President noted that Taiwan's 7-ELEVEN continued to expand, now exceeding 5,400 stores, and benefited from innovative composite store formats opened through cross-industry alliances, leading to a first-quarter revenue increase of NT$697 million, up 1.9%.
Furthermore, the distribution division: Uni-President stated that 7-ELEVEN in the Philippines continued to enter new regions, with store count reaching 2,593 by the end of the first quarter, an increase of 265 stores year-on-year. Coupled with steady growth from investees like Uni-President Lifestyle, the distribution division's first-quarter revenue rose NT$1.264 billion, up 9% year-on-year.
Additionally, the grain division: Uni-President emphasized that in Taiwan, it continued to adjust customer structure and select high-quality customers, while in Vietnam, aquatic feed sales grew steadily, resulting in a first-quarter revenue increase of NT$309 million, up 8.7%.
As for the packaging container and pharmaceutical divisions, they saw slight declines. Uni-President explained that the Wuxi tinplate plant in mainland China disposed of its plant and land last year, and this period began relocation, reducing sales volume, leading to a first-quarter revenue decrease of NT$108 million, down 1.9%. The pharmaceutical division's first-quarter revenue fell NT$89 million, down 10.4%.

**Uni-President China: Uni-President's "Golden Hen"**
Regarding the first-quarter growth momentum, Uni-President China, in which Uni-President Enterprises holds a 70% stake, is a key factor! Uni-President China's first-quarter net profit after tax was RMB 380 million (approximately NT$1.736 billion), a substantial increase of 48%. Such high growth is related to Uni-President China's recent strategies of channel inventory management and eliminating weak products, and not engaging in price wars is the key to steady and long-term success.
Uni-President China is an important "golden hen" contributing to Uni-President Enterprises' revenue and profit. In 2018, its revenue reached RMB 21.772 billion, with net profit after tax of approximately RMB 1.03 billion, up 17.25% year-on-year. Currently, it has 35 production bases in mainland China, including the Tianjin plant expected to commence production in 2019, focusing on beverages and instant noodles.
Regarding first-quarter operational growth, Uni-President China stated that through continuous healthy channel inventory management and optimized product freshness, first-quarter revenue was particularly strong for Tang Daren instant noodles and Assam milk tea, further improving product structure, and various expenses were in line with the principle of efficiency improvement.

**Reasons for Uni-President China's Strong Performance**
**Adhering to Value Marketing**
In 2014, Uni-President jumped out of the price war and launched the new product Tang Daren. From 2014 to 2015, Tang Daren's growth rate exceeded 100% for two consecutive years, with sales surpassing RMB 500 million. Today, Tang Daren's annual sales are around RMB 2 billion, becoming a classic case of a towering tree.
Uni-President has publicly stated: "Value marketing" is the core strategy of Uni-President Enterprises. In the highly competitive mainland China market, Uni-President does not engage in price wars. It targets and is optimistic about the high-priced food and beverage market opportunities, launching the best beverages and instant noodles to capture the "high-quality" market of China's 1.3 billion population. Although its market share still lags behind the market leader, Master Kong, its star products launched in recent years have begun to make competitors uneasy.

**Corporate Transformation Shows Initial Results**
Uni-President's Lo Chih-hsien previously described the current Uni-President Group with the "clear the drawer strategy." In 2016, Lo made bold moves, successively selling stakes in Jianlibao and Jinmailang, and in 2017 sold its Starbucks stake. Having disposed of many assets in the past, the Uni-President Group operates more efficiently, and slimming down has improved its figure.
Since 2016, Uni-President has promoted reforms such as "zero-based budgeting," "channel reform," and "food and beverage merger." Channel construction has gradually shifted from "direct operation" to "customer operation," and the beverage and instant noodle businesses have merged teams. Through structural innovation to accelerate corporate development, it aims to achieve a revenue target of RMB 30 billion in the mainland market within three years.

Source: Food Industry Expert (ID: shiyehome)
Tips will be paid 400-2000 yuan once adopted.

**China FMCG + Internet Professional New Media**
**Dedicated to FMCG manufacturers' transformation and upgrading and channel digital solutions**


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