In the competitive instant noodle market dominated by Taiwan’s Master (康师傅) Kong and Uni-President (统一) Enterprises Corp, the only way for smaller Asian rivals to gain a larger market share may be to resort to magic. Perhaps that is why Huafeng (华丰) recently hired famed magician Liu Qian (刘谦) as its brand spokesman, hoping to boost sales in the country’s vast second- and third-tier cities. Master Kong and Uni-President, along with Hebei Hualong (华龙) and Sichuan-based Bai Xiang (白象), control more than 60 percent of the instant noodle market. For a company without an established distribution network and brand awareness, it will be difficult to compete with Master Kong and Uni-President. The market research firm Euromonitor International reported that Ting Hsin (顶新) International Group, which owns Master Kong, led in domestic market share with 27.2 percent in 2007, followed by Uni-Present with 7 percent. Huafeng (华丰), with a 1.3 percent share, ranked ninth among leading instant noodle makers. However, Huafeng (华丰), which suffered losses from the end of the 1990s through 2004, has recruited a fresh new management team. Market conditions in China’s first-tier cities have been extremely competitive, dominated by top brands that created barriers to entries due to their economies of scale.
Master Kong (康师傅) and Uni-President (统一)
Ting Hsin International Group is a Taiwanese-owned company based in Tianjin (天津), PR China. It’s China’s biggest instant noodle maker, owning the Kang Shi Fu brand also known as Master Kong (康师傅) or Tong Yi. It also partly holds 33.2% of shares of its associate Tingyi Holding Corportation. Uni-president Enterprises Corporation is an international food conglomerate based in Tainan (台南), Taiwan (台湾). It is the largest food production company in Taiwan as well as in Asia, and has a significant market share in dairy product, foods and snacks, and the beverage market. It’s also responsible for running Starbucks, 7-Eleven, Mister Donut and Carrefour in Taiwan. In addition, Uni-President also has subsidiaries in China and Thailand.
Foreigners’ instant noodles in China: pasta and Shin Ramen
Voiello is an Italian food company based in Torre Annunziata. It was founded in 1879. Voiello produces a range of pasta. The company exports products to about 30 countries and offers private-label production services. Shin Ramen is a spicy brand of Korean instant noodles produced by Nong Shim Ltd. since 1986. It exports its products to over 80 different countries, and is the highest selling brand of noodles in Korea. Shin Ramyun comes with a seasoning packet and a packet of dehydrated vegetables, and is usually prepared in a pot or other container. It is also sold in an instant cup or instant bowl form. This version was first produced in Korea in 1981.
Recession-resistant in instant noodles market
While the global financial crisis has hit some industries hard, the instant noodle sector is apparently recession-resistant and China is among the largest consumers of the food. A Euromonitor study showed that the consumption of instant noodles has increased significantly since 2003. The industry has maintained a positive growth rate for five consecutive years, with 69.5 percent sales growth to 59 billion yuan in 2008 – up from 34.8 billion yuan in 2003. Sales of Huafeng’s instant noodles increased 70 percent from $89.28 million in 2006 to $151.92 million last year, according to the company’s 2008 financial report.
Picture Source: Instant noodles