(CN) Dairy sales

[Guest guest]

South China Morning Post

Saturday, January 3, 2004

http://biz.scmp.com/bizchina/ZZZJTJ6BPOD.html

 

Dairy sales pitch aims to win over mainland tastes

Advertising is seen as key to spurring demand in a largely untapped

market

 

by SIDNEY LUK

 

Mainland dairy companies are spending millions of yuan on advertising

to convince Chinese to eat more yoghurt and drink more milk.

 

It will be a hard sale: the average Chinese consumes just 9.7kg of

dairy products a year, compared with 200kg in Europe and a world average of

100kg.

 

" Chinese still drink too little milk, " a sales manager at a foreign

milk producer said. However, the manager believes the mainland could become

the biggest market for dairy products within 10 years.

 

Dairy companies believe they can whet appetites for their products by

spending big on television campaigns.

 

Two months ago, Inner Mongolian-based Mengniu Dairy astonished auction

crowds in Beijing by paying 310 million yuan for a 55-second advertising

slot on Chinese Central Television (CCTV).

 

Rival Yili Dairy followed close behind, spending 210 million yuan for

a slot after the evening news.

 

A spokeswoman for Shanghai-based Guangming Dairy said: " Intensifying

competition in the industry is an unarguable fact. "

 

The dairy company, the mainland's largest, was the third-biggest dairy

product advertiser in the first 10 months of last year, spending 159.54

million yuan.

 

" We have been spending more money these past two years to build our

name to let people know that we are transforming from a Shanghai enterprise

to a national firm. We must put our marketing campaigns on nationwide

platforms such as CCTV, " the spokeswoman said.

 

This is causing a subtle shift in the mainland advertising industry.

According to Nielsen Media Research, advertising spending between January

and October for dairy products climbed 82.82 per cent year on year to 2.31

billion yuan. This compared with 46.29 per cent growth for rice and 46.65

per cent for snacks.

 

In total, the country's advertising spending for the 10-month period

was 42.23 per cent higher at 159.6 billion yuan.

 

" Chinese are increasingly health conscious, especially those in

Shanghai and Guangzhou, " Nielsen Media Research China director Rita Chan

said.

 

Dairy advertising in Shanghai in the 10-month period totalled 191.92

million yuan, up from 76.7 million yuan a year ago. In Guangzhou, it

increased 136.64 per cent to 100.35 million yuan.

 

Nine of the top 10 dairy product advertisers were mainland brands,

spending 1.29 billion yuan in the 10 months. Nestle was the only foreign

name, ranking ninth with an ad expenditure of 70.62 million yuan.

 

" Local brands see more advertising dollars as a way to promote their

product in China, " Ms Chan said. " After all, this is the most direct channel

for products and companies to be heard in the huge and fragmented China

market. "

 

For the first half of last year, mainland production of dairy goods

rose 30.87 per cent from a year ago, while sales climbed 39.35 per cent. The

country produced 11.2 million tonnes of milk products in 2002.