Interface News Reporter | Li Ye
Yizi, which owns multiple brands such as Oreo, Quduoduo, Youguan, Yikolian, Xuanmai chewing gum, and Guozhen, needs to further penetrate the Chinese market.
At the 2023 performance meeting on January 31, Dirk Van de Put, CEO of Yizi, expressed the international snack company's idea of further expanding its distribution channels in emerging markets, including China, by selling products such as Oreo through more convenience supermarkets and mom and pop stores. He revealed that about 50% of Yizi's organic growth in emerging markets is driven by distribution expansion, and if we look at the world, about 2% of the additional organic growth comes from it.
This company has just achieved good performance in 2023.
According to Yizi's 2023 annual report, in the fourth quarter of last year, Yizi reported a net revenue of 9.314 billion US dollars (approximately 65.943 billion yuan), an organic growth of 9.8% year-on-year; After adjustment, the net profit was 1.15 billion US dollars, a year-on-year increase of 22.6%. In 2023, Yizi reported a net revenue of $36.016 billion (approximately RMB 254.993 billion), a year-on-year increase of 14.7%; After adjustment, the net profit was 4.371 billion US dollars, a year-on-year increase of 17.5%.
Specifically, the AMEA (Asia, Middle East and Africa) region, where China operates, reported a net revenue of $1.736 billion (approximately RMB 12.29 billion), an organic growth of 7.9% year-on-year; The annual net revenue was 7.075 billion US dollars (approximately 50.091 billion RMB), a year-on-year increase of 11.7%.
Luca Zaramella, Chief Financial Officer of Yizi, revealed at the performance meeting that China's business recorded high single digit growth throughout last year and the previous quarter.
Interface News Fan Jianlei
In order to make more money in China, Yizi's strategy is divided into three parts: expanding sales networks in the lower tier markets, providing more new products to the middle class in the first and second tier markets, and doubling e-commerce sales by 2025.
For snacks and cookies, various offline supermarkets and mom and pop stores are the main battlefield. But Feng Pude said that currently, among the potential 6 million branches, Yizi's cookies have only entered about 3 million, and there is still huge room for growth. In the previous three years, Yizi China has added 350000 new distribution stores for biscuit products and over 500000 new distribution stores for chewing gum products, which has directly driven Yizi's high growth in China.
Yizi's main product in the Chinese market is Oreo. Zhu Yijing, Vice President of Yizi's Greater China Market and Development Department, stated in a 2022 interview with industry self media "Snack Generation" that Oreo's annual sales in China have reached billions and have maintained "very impressive annual compound growth" in the past four to five years. As the most successful brand under Yizi, China has become Oreo's second largest market after the United States.
In Yizi's distribution plan, Oreo's core products will be used as a starting point to expand its biscuit business in the Chinese market. Yizi plans to add 500000 distribution stores in China by 2025.
On the other hand, with the changing consumption habits of Chinese consumers, snack brands need to make up for the blank circulation routes that traditional channels such as supermarkets cannot take care of through e-commerce or O2O, and Yizi is no exception. E-commerce has accounted for 20% of Yizi's sales in China, and according to institutional data cited by the company, its snack category in China's e-commerce channels ranks first in share.