Chinese Ice-Cream Maker Takes a Novel Approach
With punishing price wars, widespread losses and hundreds of rivals, China's ice-cream business is proving a bitter battlefield -- and spawning an unusual alliance that underscores the growing marketing clout of domestic Chinese companies.
When Beijing Faxi Ice Cream Co. set up a joint-venture factory in 1990 to sell San Francisco-based Bud's Ice Cream in China, the frozen treat was still a novelty. In the decade since, ice-cream sales have boomed, driven by massive investments by Wall's, a unit of conglomerate Unilever NV, and Nestle SA. Pioneer Beijing Faxi remained locked in the premium end of the market, keeping its business and market share relatively small. It's a common conundrum for some less-successful foreign consumer-goods companies in China, from beer to cosmetics.
Now, Beijing Faxi is embracing a novel strategy to compete more vigorously in what's estimated to be a $2.4 billion market. Beijing Faxi -- since renamed Beijing Allied Faxifood Co. and majority-owned by a Hong Kong investment company -- has joined forces with Beijing Sanyuan Foods Co., one of China's largest dairy companies. Under the alliance, Beijing Allied will make ice cream while Sanyuan handles sales, marketing and branding -- areas in which traditionally foreign companies have outpaced their domestic rivals in China.
Bud's "is a high-end brand. The market is good, but it is by definition limited," says Zhou Wei, general manager of Beijing Allied. "Sanyuan's name recognition in the whole country is much stronger than ours."
It's an acknowledgment that abandoning a focus on the niche market for the mass market, however brutal the price competition, may be necessary to survive. It's also an acknowledgment of how quickly domestic Chinese brands are becoming worthy rivals and potential partners. In sectors including mineral water and toothpaste, multinationals have acquired Chinese brands for both their strong name recognition among consumers and their distribution reach.
China's ice-cream market exhibits many of the hallmarks of the country's ultra-competitive marketplace. While Wall's and Nestle remain market leaders, Chinese brands like Mongolia Yili Industrial Group Co. and Mengniu Dairy Co. are gaining ground with savvy marketing, strong distribution and locally appealing flavors like mango and green bean. Price wars are endemic; Ms. Zhou estimates ice-cream prices have dropped between 20% and 30% since last year.
Beijing Allied has high hopes for its move into the mass market. Although the company says it ranks No. 3 in Beijing's high-end ice-cream market after Wall's and Nestle, nationally it enjoys less than a 5% market share, according to the China Association of Bakery and Confectionery Industries, in large part because of its high price. A 19 oz. tub of Beijing Allied's ice cream sells for $2.40; a same-size container under the new venture with Sanyuan will sell for a third of that price. (The company stopped using the Bud's name in 2000 but continues to use the "Baxi" brand, the original Chinese transliteration of Bud's.)
The ice cream will be sold under the Sanyuan brand, for which Beijing Allied will pay a fee. The first three flavors -- chocolate, vanilla and lychee -- were launched in April, and a broader range of flavors and products is planned for next year. Beijing Allied is also building a factory in a suburb of Beijing that will significantly increase its production capacity when completed in September.
Sanyuan says it expects the new venture to post sales of $18 million next year. The company hopes it can parlay its name recognition and its sales and marketing network for milk into ice cream.
Competition is stiff. Unlike in the U.S., which requires ice cream to have a certain amount of milk fat and other ingredients to be worthy of the name, some manufacturers in China substitute milk powder, water or even vegetable oil, allowing them to cut costs. And because it's hard to transport frozen foods over long distances in China, where few rural homes have freezers, ice-cream makers compete in a few big cities.
"The market has a lot of potential but the industry is seeing losses," says Ms. Zhou, "with most companies losing money."
在华冰激凌生产商面对严酷竞争调整市场定位
中国冰激凌市场对生产商而言可是一个水深火热之地：价格战愈演愈烈，企业普遍亏损，竞争对手层出不穷。在这种情况下，一种不同寻常的合作关系应运而生，这显示出中国本地企业在产品营销方面越来越大的优势。
早在1990年，北京发喜冰激凌股份有限公司(Beijing Faxi Ice Cream Co.)就与中国一家国有企业合作，开始在中国销售旧金山一家公司的八喜(Bud's)牌冰激凌。当时，冰激凌对于大多数中国人来说还是一种待客的奢侈品。在随后的十多年间，随著雀巢公司(Nestle SA)以及联合利华(Unilever NV)旗下的和路雪(Wall's)两家公司在中国市场的巨大投入，冰激凌在中国的销量开始不断攀升。当时北京发喜仍主要开发高档冰激凌市场，这使它的市场占有率相对较低－对于外资消费品公司来说，不论是啤酒行业还是化妆品行业或其他行业，这种情况都非常普遍。
北京发喜后来更名为北京艾莱发喜食品有限公司(Beijing Allied Faxifood Co.)。现在，艾莱发喜正在实施一项全新的战略，它希望在规模高达24亿美元的中国冰激凌市场上大展身手。它已与中国最大的奶制品企业北京三元食品股份有限公司(Beijing Sanyuan Foods Co.)结成合作伙伴。艾莱发喜负责生产冰激凌，三元负责销售、推广和品牌建设－在其他大多数行业，这些工作通常是外资公司较本地企业更擅长的领域。 艾莱发喜总经理周炜说，八喜属于高价位产品，虽然销售情况不错，但市场规模毕竟有限。国内对"三元"品牌的认知度要比对艾莱发喜高得多。
艾莱发喜的举动表明，虽然大众化市场的竞争异常激烈，但该公司已经意识到，为维持企业的生存和发展，放弃高端市场、转向大众市场或许是必要的。它还表明，中国国内品牌已经迅速发展为外国企业强有力的竞争对手，同时也成为它们潜在的合作伙伴。在矿泉水行业和牙膏行业，一些跨国企业已收购了数家本地企业，通过收购，既可以借助它们的知名度，还能利用它们的分销渠道。 中国市场严酷的竞争态势在冰激凌市场上有诸多表现。目前，尽管和路雪和雀巢仍稳坐该行业的头两把交椅，但国内企业内蒙古伊利集团(Mongolia Yili Industrial Group Co.)和蒙牛乳业(Mengniu Dairy Co.)依靠明智的营销策略、有力的分销网络和适合中国人的口味，正在日益扩大市场地盘。价格战正到处蔓延。据周炜估计，自去年以来，冰激凌价格已经下降了20%-30%。
艾莱发喜对打入大众化市场的期望非常高。虽然该公司自称在北京的高档冰激凌市场仅次于和路雪和雀巢，排名第三，但据中国焙烤食品糖制品工业协会(China Association of Bakery and Confectionery Industries)的数据，该公司在全国市场上的占有率只有5%。
(艾莱发喜此前已几易其主，现在持有其多数股份的股东是香港投资公司京泰农工商有限公司(Hong Kong Jingtai Nonggongshang Co.)。艾莱发喜2000年已停止使用Bud's的英文品牌，但仍保留了原来的中文品牌。)
艾莱发喜与三元合资的冰激凌产品将用三元的品牌销售，为此艾莱发喜将向三元支付品牌使用费。今年4月份，他们推出了最受消费者欢迎的三种口味－巧克力、香草和荔枝味冰激凌，明年他们还将推出更多口味的产品。艾莱发喜在北京郊区新建了一家工厂，9月份即将完工，预计新厂将大大提高公司的生产能力。
三元方面称，预计合资公司明年的销售额可达1,800万美元。三元希望，能利用其市场知名度和牛奶的销售推广网络来拓展冰激凌业务。
在中国冰激凌市场上，某些"中国特色"的影响加剧了竞争的热度。美国规定，冰激凌里要有一定比例的牛奶脂肪和其他成分，但中国没有类似的要求，生产商大多用奶粉、水甚至还有植物油来生产冰激凌，因此生产成本有很大的压缩空间。
而销售过程中涉及的物流方面的问题也导致竞争进一步白热化。由于冷冻食品长距离运输比较困难，同时，许多农村家庭没有冰箱或冰柜，因此，冰激凌市场主要集中在大中城市。据美国政府下设的研究机构Foreign Agricultural Service提供的数据，去年，中国市场共销售了140万吨冰激凌，而仅广东、上海和北京三地就消化了其中的四分之三。
周炜说，中国冰激凌市场蕴藏著巨大潜力，但目前，该行业仍处于普遍亏损状态，大多数公司都不赚钱。
