△Add friends, please note "inspection" to register Vitasoy soy milk, a household name in Hong Kong, has quietly entered KA stores, large supermarkets, and even convenience stores in residential areas in mainland China, occupying the best-sighted positions. To date, mainland China has become Vitasoy International's largest and most important market, contributing over 60% of its annual revenue. Since last year, the company sold its North American tofu business and, apart from establishing a soy milk joint venture in the Philippines, its focus remains on mainland China. The company has proposed a "broader and deeper" strategy to deepen its expansion in the mainland market. However, with mainland China's annual revenue growth exceeding 30%, capacity expansion may have lagged. The company says it is eager to continue growing, but the growth rate will slow slightly. Mainland China contributes 60% of revenue On November 21, Vitasoy International disclosed its 2018/2019 interim report, showing revenue of HK$4.448 billion, of which mainland China contributed HK$2.992 billion, accounting for 67.27% of total revenue. At the end of March this year, in the 2017/2018 fiscal year report, the company's revenue was HK$6.465 billion, with mainland China contributing HK$3.7 billion, or 57.23% of total revenue. Not only has the revenue share from mainland China increased year by year, but its revenue and profit growth have also followed suit. The 2018/2019 interim report shows that revenue in mainland China grew 33% and profit grew 42%; in the same period last year, revenue and profit grew 39% and 41%, respectively. Ten years ago, mainland China was still a small market for the company, with sales in North America, New Zealand, and Australia far exceeding those in mainland China. Starting in 2009, mainland China's sales share surpassed that of Australia, New Zealand, and North America. This is attributed to the company's "deeper and broader" business strategy, coupled with hiring Yuan Jie, former sales director of PepsiCo's South China region, to focus on and expand ready-to-drink soy milk products in the mainland market. After 2009, mainland China completely emerged from among Vitasoy International's global market segments. The 2009/2010 interim report shows that revenue from mainland China accounted for 28%. In fiscal 2010/2011, the company's sales in mainland China were HK$854 million, accounting for 26% of total revenue. In 2014, Vitasoy International achieved revenue of HK$1.916 billion in mainland China, nearly matching the HK$2.049 billion from its core markets of Hong Kong and Macau. In fiscal 2015/2016, mainland China's sales share increased to 43%, surpassing the Hong Kong market for the first time. Even after the melamine incident that severely impacted the dairy industry, Vitasoy International's performance was unaffected and continued to grow, expanding from South China to the whole country. A box of soy milk has a gross margin of 53% Mainland China is not only served by Vitasoy International for ready-to-drink soy milk products. In the past three years, Yili, Mengniu, Dali Foods, and even veteran soy milk company VV Group have launched similar products. Unlike mainland food giants that spend hundreds of millions on celebrity endorsements and nationwide distribution, Vitasoy International is quite low-key, with almost no advertising, yet its products quietly land in KA stores, large supermarkets, and even community convenience stores. Zebra Consumption noted that the company's low-key style is one reason, and another is product design. Vitasoy International's soy milk products have detailed and clear flavor distinctions. Whether it's soy milk, milk tea, soy drink, or lemon tea, they pay special attention to individual needs, offering low-sugar, sugar-free, and regular sugar options. Even milk tea comes in regular and strong concentrations, showing the company's attention to end users. Additionally, changes in consumer habits regarding soy milk consumption have to some extent driven the popularity of Vitasoy products. "Soy Milk King" VV Group has been making soy milk powder for 25 years, with a market share that once exceeded 70% and dominated the market. With the emergence of bottled and packaged soy milk, the lower-margin soy milk powder business has shown signs of fatigue. In 2017, VV Group's soy milk powder (including soy milk powder and chewable) sales were 86,600 tons, up 1.04% year-on-year, generating revenue of RMB 1.51 billion, up 0.22% year-on-year. VV Group's soy milk powder market share has fallen from 70% in 1997 to about 30% now. As soy milk shifted from hot brewing to ready-to-drink, Vitasoy International exactly catered to this drinking habit, ultimately leading to a sales explosion. In terms of gross margin, Vitasoy International has maintained around 53%. Even under the pressure of rising raw material costs for soybeans and milk powder in 2017, the company still maintained the same gross margin as the previous fiscal year. According to Euromonitor International data for 2016, the overall retail market size for soy milk (soy drink) in China was RMB 8.4 billion, with Vitasoy holding a 42% brand share in China. Capacity constraints, slowing growth? In fiscal 2017/2018, Vitasoy International sold its North American tofu business and established a soy milk joint venture in the Philippines. The company publicly stated that it will "more concentratedly develop the Asian region and core categories with huge potential." This implies an acceleration of expansion, especially in mainland China, which places demands on the company's production capacity. To date, Vitasoy International has four factories in mainland China: Shenzhen, Foshan, Wuhan, and Shanghai. Although the company has not disclosed annual capacity, the over 30% annual revenue growth in mainland China and changes in non-current assets corroborate the company's need for capacity expansion. The 2018/2019 interim report shows a significant increase in self-used leased land and other property, plant, and equipment, with non-current assets rising from HK$2.349 billion in the same period last year to HK$2.512 billion, an increase of HK$163 million. In the 2017/2018 interim report, capital expenditure increased to HK$168 million, which the company said was mainly used to purchase new production lines and upgrade existing production machinery in Hong Kong and mainland China. Industry analysts say that a significant increase in fixed assets such as machinery, land, and equipment indicates that while revenue is growing, capacity expansion has lagged. On October 30, 2018, Vitasoy International invested RMB 1 billion to start construction of its largest production center in Dongguan, expected to be operational by 2021. It is reported that after the Dongguan factory is operational, existing capacity will double, which also indirectly shows that Vitasoy International still faces capacity constraints over the past three years. Vitasoy International has anticipated this situation. As stated in its 2018/2019 interim report, the company is eager to continue growing, but the growth rate will slow slightly. Source: Zebra Consumption (ID: banmaxiaofei) Tenth B-end E-commerce Inspection -- "From Product to Scene" Event time: December 10-13 Event location: Wuhu, Nanjing, Changsha Event schedule:
Morning of Dec 10: Visit Three Squirrels headquarters + snack store
Afternoon of Dec 10: Visit Nanjing Squirrel small store
Evening of Dec 10: Visit Nanjing Master Gao Beer Workshop
All day Dec 11: Nanjing-Changsha, or free arrangement
Morning of Dec 12: Community group buying exchange salon
Afternoon of Dec 12: Koala Selection Hero League launch event
Evening of Dec 12 to early morning of Dec 13: Field visit to Koala Selection logistics center — This time is the peak warehouse sorting period, allowing direct observation and learning of the backend operation process of community group buying e-commerce Welcome interested distributor friends to join us to learn and inspect on-site : Organization format 1. Expert exchange salon************2. Company visit
- On-site explanation
- One-on-one communication************5. Actual market case visit Friends who want to participate If you are interested in a particular day's content, you can register separately Long press this QR code or click "Read Original" to register in one click! Add friends, please indicate your intention -END-