"Yili, leading all the way, is leaving other competitors far behind"... Q1 Performance Overview On the evening of April 25, Yili Co., Ltd. released its 2019 first-quarter report, continuing the high growth momentum of 2018. Yili got off to a good start in the first three months, with total revenue surging 17.1% to 23.13 billion yuan, far exceeding market expectations and setting a new historical high. Historically, Q1 revenue is not the highest proportion of the full year; if the growth trend continues, Yili's achievement of the previous 90 billion yuan annual target is not difficult. In Q1 2019, Yili's market penetration rate was 64.3%, far higher than the industry average growth rate. At the same time, Yili's overall market share steadily increased to 25.6%, ranking first in Asia and continuing to lead the industry. Breakdown by Product Category By segment, in the first three months, Yili's liquid milk business revenue was 18.96 billion yuan, milk powder and dairy products completed 2.55 billion yuan, and cold drinks revenue was 1.5 billion yuan. The industry believes that Yili's Q1 performance exceeded expectations, following the 2018 double-digit growth, the 2019 target of over 90 billion yuan is achievable, and the value of its health ecosystem is highlighted.

Holding Three 10-Billion-Yuan Products, China's Nestlé Rises

1. Ambrosial (Anmuxi) Since Yili launched Ambrosial in 2013, the brand has experienced explosive growth. In 2014, Ambrosial's annual sales were about 700 million yuan; in 2015, about 4 billion yuan; in 2016, about 9 billion yuan; in 2017, Ambrosial's single-product sales exceeded 10 billion yuan. In 2018, Ambrosial sales exceeded 14 billion yuan. 2. Jindian (Satine) As a high-end brand benchmarked against Mengniu's Telunsu, Yili Jindian has been a key focus since its launch in 2007. In early December 2018, Yili confirmed that Jindian's 2018 sales exceeded 10 billion yuan, making it another 10-billion-yuan product after Ambrosial. 3. Yili Pure Milk Yili's parent brand, Yili Pure Milk, has been on the market since April 2014. In 2018, Yili Pure Milk sales exceeded 10 billion yuan. The pure milk line now includes: Yili Pure Milk, Yili Breakfast Milk, and Yili High-Calcium Milk. Giants Run Faster, Regional Dairy Companies Have Mixed Prospects Q1 annual reports of listed dairy companies are gradually being disclosed. Overall, the performance of listed dairy companies continues to diverge, with the market showing a pattern of the strong getting stronger, and the competitive landscape is clear: (1) Yili and Mengniu's leading advantage expands. From the 2018 performance of Yili and Mengniu, their growth rates far exceed most regional dairy companies and SMEs, indicating that the market is accelerating concentration towards the two giants. Meanwhile, another giant, Bright Dairy, saw a decline instead of growth; the former "Three Kingdoms" has completely become "Two Dragons Playing with a Pearl." (2) Regional dairy performance diverges, with mixed results. The star companies of 2017, Tianrun and Kedi, showed clear divergence in 2018 performance. Tianrun continued high growth through differentiated products and channel cultivation; while Kedi saw sluggish growth due to the popularity of small white milk. Other regional dairy companies mostly had growth rates below 10%. (3) Upstream companies improve performance. Upstream dairy companies represented by Modern Dairy and Western Dairy, benefiting from rising milk prices and internal cost reduction and efficiency improvements, reversed their decline in 2018 and significantly improved performance. Data source: Listed company announcements / Ruinong Dairy Research Department Yili 2019 Strategy Interpretation In 2019, Yili plans to achieve total operating revenue of 90 billion yuan and total profit of 7.6 billion yuan. Looking at the period from the end of 2018 to Q1, Yili's main changes include: First, in December 2018, it changed its LOGO. The new LOGO is simpler and clearer than the original. Reviewing the evolution of LOGOs of many international brands such as Coca-Cola, it can be found that the more international a company becomes, the simpler and clearer its LOGO becomes. Therefore, Yili's move is also intended to further strengthen brand influence and prepare for internationalization. Second, it added a health beverage and cheese division. It is entering drinking water, plant protein beverages, and focusing on the cheese category. This is not only because the company is optimistic about the potential of these categories, but also because Yili is fully utilizing its brand influence for category extension and making forward-looking arrangements to find new growth points. Third, overseas expansion. Following the launch of Joyday ice cream in Indonesia in October 2018, the acquisition of Thai ice cream company Chomthana in November, and on March 18, the acquisition of Westland, New Zealand's second-largest dairy cooperative. From Yili's overseas actions, it can be seen that when the domestic market reaches a total volume ceiling, Yili is seeking new growth points through market expansion. It is foreseeable that competition in China's dairy market will be more intense in 2019. The strong will become stronger, the market position of large enterprises will become more stable, and the entire market will continue to concentrate towards large enterprises. In such a market environment, where can SMEs find differentiated advantages? The only answer is brand. Only brands can form true differentiation; only brands with differentiated positioning can achieve true breakthroughs; and only enterprises with clear brand strategies can achieve sustainable development! The first quarter has passed, and large enterprises remain as solid as rocks. We have found that more and more SMEs are realizing the power of brands and showing clear brand strategies. We believe that enterprises that insist on building brand value will have better market performance! Source: Compiled by New Distribution from Yili's annual report and Ruinong Dairy Research Department Tips will be paid 400-2000 yuan upon adoption. China FMCG + Internet Professional New Media Dedicated to FMCG manufacturer and distributor transformation and channel digital solutions