On November 20, China Want Want Holdings Limited (00151.HK) (hereinafter referred to as "China Want Want") released its interim results report for the nine months ended September 30, 2017. The report showed that from January to September 2017, China Want Want's revenue was RMB 13.5854 billion. Among this, from April to September, revenue was RMB 9.0057 billion, a year-on-year increase of 6.3%. Over the past three years, due to changes in consumption habits and market demand, China Want Want's revenue experienced three consecutive declines. In response to market changes and consumption upgrades, China Want Want began optimizing its product structure and marketing organization, exploring new channel operating models. These reform measures were reflected in its 2017 financial performance and brand influence. Multi-brand strategy: Rice crackers grew 10.7%, dairy and beverages grew 6.5%, and snacks grew 2.8% PART ONE China Want Want divides its business into three main categories: rice crackers (such as Senbei and snow crackers), dairy and beverages (such as flavored milk and lactic acid drinks), and snacks (such as candies, jellies, and nuts). From April to September, Want Want's rice cracker products generated revenue of RMB 1.9 billion, a year-on-year increase of 10.7%; dairy and beverage products generated revenue of RMB 4.6 billion, up 6.5% year-on-year (with the single product Want Want Milk seeing a year-on-year revenue increase of 10.1%); snack products generated revenue of RMB 2.5 billion, a year-on-year increase of 2.8%. Adopting a multi-brand strategy is one of China Want Want's reform strategies to address consumption upgrades. This year, Want Want launched the internet-famous "Want Want Extra Rich Milk," Da Kou Shuang, O-Pao Lactic Water, and Shawa Wine (milk wine). In response to consumers' increasingly strong health demands, China Want Want, while advancing product upgrades, also emphasizes the health orientation of its products, successively launching new products such as "Aiyou Buckwheat Rice Noodles" with buckwheat content over 50%, Mochi Q Rice Noodles, and Tom Yum Kung Noodles. Next year, it may launch the world's first aseptic-filled high-quality ice cream product—Dongchi. Product differentiation and emphasis on new channel development PART TWO To reverse the three-year revenue decline and attract a new generation of young consumers, China Want Want is seeking breakthroughs in new channels. In the first half report, China Want Want stated that it would further penetrate sales channels, continue to increase investment in maternal and infant, e-commerce, and special channels, and extend the diversity of future sales channels. This report also mentioned that for different channels, customized and differentiated products are launched to meet the needs of consumers in different channels. For example, "Baby Mama" is exclusively sold in maternal and infant channels, the "La Ren" series is exclusively sold in e-commerce channels, and the star product "Want Want Milk" has introduced packaging combinations suitable for family consumption based on consumers' purchasing habits in modern channels, thereby stimulating dairy and beverage products. At the same time, it emphasizes the development of new channels such as e-commerce and maternal and infant channels, for example, by launching lively and fashionable marketing strategies, creating hot topics online, further penetrating new channels like maternal and infant, and continuously launching new products that meet the needs of online shoppers, such as the 'Mr.HOT' series of heavy-flavored snack packs. For traditional channels, China Want Want continues its channel penetration strategy, "to accelerate the execution of marketing policies and response to market changes, through marketing organization optimization, reducing service radius, and continuously exploring blank markets in fourth- and fifth-tier cities." Strengthen cross-industry brand cooperation to capture young consumers PART THREE The IP image of China Want Want's brand is a childhood memory for the current young generation. To increase communication with young people, China Want Want uses social media, digital marketing, and various cross-industry collaborations to further penetrate consumer minds and enhance brand recognition. Recently, a Want Want Milk advertisement featuring "Li Ziming from Class 6, Grade 3 is back" went viral on Weibo and major video sites. Li Ziming, who was an elementary school student many years ago, returned to Class 6, Grade 3, and his mother still brought him Want Want Milk... The exaggerated and slightly "awkward" performance, while being ridiculed, still generated considerable buzz. China Want Want also actively engages in cross-industry collaborations with major brands, such as partnering with Alibaba to launch the 511 (I Want Want) Want Want Day; collaborating with Google China for a "Want Want Gift Pack" live stream, inviting over a hundred official Weibo accounts to send New Year greetings; and cooperating with Ele.me for a "Halloween Trick or Treat" activity to attract young people's attention and participation. The "Want Want Club" fan organization now has 12 million fans. Through the "Want Want Club," China Want Want releases innovative content, gradually awakening the brand's impression in consumers' minds as a childhood memory. As an old brand, China Want Want also faces the crisis of aging brand marketing positioning and strategy. Once in the television era, Want Want captured the hearts of countless mothers and children with the slogan "Drink you up if you look again." In the social media era, Want Want must increase its presence in new channels to reach its target consumers. In addition, in the food sector, consumers are no longer simply pursuing deliciousness; "tasty but unhealthy" is outdated. In terms of health orientation, this is a key focus for China Want Want's breakthrough. In the chairman's report in March this year, Want Want Group Chairman Tsai Eng-Meng stated: "I believe that in the next 2-3 years, the landscape of China's food industry will undergo structural changes. Historically, competition has always been the principle of progress. In crises and challenges, there are many rare opportunities waiting for those who are prepared to break through." Source: Food Business Observation -END-