China's dairy industry: multinational giants "stealthy" market grab

Introduction: just in the past 2002, China's dairy industry has been surging At the end of the year and the beginning of the year, there was another sensational news in the industry, namely, three international well-known investment companies, Wall Street Morgan Stanley, CDH investment, and Allianz investment, injected RMB 216 million into Mengniu, becoming the first overseas venture capital obtained by China's dairy industry so far According to industry review, Mengniu's huge capital injection marks the climax of a new round of investment in China's dairy industry by international capital What is more noteworthy is that the international dairy giants have adopted a hidden behind the scenes approach in brand strategy Their patience and strategies in this emerging market are worth studying by domestic manufacturers WGk Mengniu takes advantage of the situation to want to be listed overseas wGk last year, bright before and after the listing on the merger and acquisition of a series of actions; waiting for the listing of 3 yuan is not willing to be outdone, first "kill" to bright home Shanghai to get all the best dairy products, now to Guangzhou popular wave; new hope is in three months to swallow 10 "city" In contrast, Mengniu seems to be quiet However, in 2002, Mengniu became the fastest-growing private enterprise in China with a growth rate of 1947% after the settlement of the base point Its total assets increased from more than 10 million yuan in 1999 to nearly 1 billion yuan Its sales revenue increased from 43.65 million yuan to more than 2 billion yuan, and its ranking among dairy enterprises in China rose from 1116 to 4 This is undoubtedly the main reason for Mengniu among Morgan Stanley, CDH investment and Allianz investment Secondly, the Chinese dairy market has become the fastest growing and the most potential market in the global dairy consumption According to statistics, China's dairy market sales will reach 35 billion yuan in 2002 Industry insiders pointed out that in the next few years, China's dairy market will still be in a period of rapid development According to the data of China Dairy Association, at present, the per capita consumption of dairy products in China is less than 10 kg, which is quite different from that in developed countries The growth rate of fresh milk in Inner Mongolia is nearly 6 times higher than the national average growth rate The growth rate of fresh milk has exceeded 1 / 10 of the national increment In addition, the prospect of western development has finally achieved the project of attracting investment which shakes the industry It is reported that Mengniu's recent goal is to go public overseas Some insiders of wgk pointed out that in fact, foreign investors have already begun to pay attention to China's dairy industry, but they have their own ways Nestle entered the Chinese market in the early 1980s, focusing on its own product brands, and did not really operate until 10 years later More foreign investors choose the method behind "invisibility", instead of making their own product brands, they open the way with funds Like Danone in France, although it started to enter China as a "Danone" brand, it later chose to share in Guangming and gave the brand to Guangming for free, and even handed over Shanghai Danone and Guangzhou Danone to Guangming trusteeship Similarly, Beijing Sanyuan acquired Philip Morris's "Kraft" brand in the United States, Parmalat leased its Heilongjiang dairy factory to Yili for about 5 years, etc Why does wgk choose stealth? Senior insiders said that this is a smart and labor-saving way for foreign-funded enterprises to enter the Chinese market late On the one hand, it is easy to "make enemies" by entering directly with its own product brand, which is an unfriendly signal for domestic enterprises to declare war directly But to open the way with capital is the same purpose and another deduction, which can at least meet the capital needs of domestic enterprises On the other hand, after foreign capital enters China, it has no great advantage in market development and milk source control, so choosing domestic enterprises as partners is equivalent to "recruiting troops and buying horses" in the Chinese market, waiting for a favorable opportunity to make efforts In the first year of China's accession to the WTO, there have been many merger cases in the domestic dairy market, many of which have foreign background It can be predicted that the trend of foreign investment into China's dairy industry will start in the next few years In front of the strong capital offensive and strength of foreign capital, how can domestic dairy enterprises win their own day? According to the analysis of some insiders in wgk, as 80% of domestic dairy enterprises are small and medium-sized enterprises, even some of the largest enterprises are hard to compete with foreign capital in terms of capital and strength Therefore, in the long run, domestic dairy enterprises should take a good look at the situation and opportunity, give full play to their advantages in milk source base, local brand familiarity and sales network, complete the "upgrade" as soon as possible, raise their value, strive for a strong "foreign big money", and take the road of Sino foreign cooperation to the stage of the international market Wgk (Huang Haiyun) (from Yangcheng Evening News) wgk