Less than expected performance of Mars Wrigley in China

category:Finance
 Less than expected performance of Mars Wrigley in China


China is Marss second largest market after the United States. In 2018, Berninger, vice president of global public affairs of Mars, publicly said: Mars was a brilliant era in China in the 1990s, but now it only exists, so we hope to find a sense of existence in the future. Berningers sense of existence is to hope that by 2025, Mars China market performance will triple its global share. It is said that Marss sales in 2019 will be about $40 billion, but it has not publicly disclosed its sales in China.

Xu Xiongjun, a strategic positioning expert and founder of Jiude positioning consulting company, said that from last year to this year, the sales situation of Mars Wrigley was not ideal, so there was only one reason for the change: poor performance.

In Mars global market, the pet sector is its largest business, which is different from the situation in China. It is reported that in the Chinese market, Mars has more than 30 brands. Mainly concentrated in the food industry, including dove, Schlicker, M & Ms, crisp rice, green arrow, Yida, dada, zhenzhibang, Swiss sugar and other brands.

However, in recent years, with the enhancement of peoples health awareness, consumers awareness of abstaining from sugar and reducing sugar has gradually deepened, resulting in the continuous decline in the growth rate of the candy and chocolate market. According to the data, in 2018, the retail market size of the candy and chocolate industry was 112.9 billion yuan, a year-on-year decrease of 2%. The output of candy also dropped from 3.62 million tons in 2014 to 2.88 million tons in 2018.

While the overall growth rate of the market declined, Mars Wrigley was also impacted. According to Euromonitor International data, in 2016, dove still ranked first in Chinas chocolate market, but its market share declined significantly. Similarly, the two star products of M & Ms and Schlickers lost 0.3% share in the Chinese market.

According to Xu Xiongjun, the main challenge facing Mars arrow is that its products are concentrated in areas with high caloric content such as sugar and fat, which is not friendly to consumers with sugar free demand and the three high population. This can be seen from the vigorous forest which claims 0 sugar and 0 fat.

Like Procter & Gamble, Coca Cola and other international enterprises, Mars has been in China for 30 years, but the overall product system has not changed much and can no longer adapt to the current Chinese consumer market, so it is urgent to transform. Bao Yuezhong, a new retail expert of FMCG, said.

Mars is also aware of this, and began to lay out the field of healthy food. In 2018, Mars China introduced be-kind taste energy bar, positioning it as a healthy snack nut stick product. Be-kind is just one of the cases of turnaround of Mars business. At this years Expo, Mars launched a variety of products, such as healthy snacks, kitchen seasoning and pet food.

However, Shen Meng also expressed concern about this: snacks, pet care and food all have great market potential in China. As a global leading brand, Mars has advantages in medium and high-end markets. However, with the rapid development of local brands driven by capital and the rapid expansion of e-commerce and other consumption channels, Mars also faces many challenges. If we can not strengthen the local landing, It may lead to lower performance than expected.

Source: Wang Xiaowu, editor in charge of Beijing Business Daily_ NF