Uni-President's Laotan pickled cabbage flavor instant noodles with beef. (Photo/CFP)
At the end of 2013, the battle between Uni-President China Holdings and its main rival Tingyi Holdings, the largest instant noodle producer in China which sells under the Master Kong brand, began to heat up.
The Chinese subsidiary of Taiwan-based Uni-President has begun to give the Master Kong brand a run for its money, according to the Shanghai-based China Business News.
The daily noted that since launching its new braised beef-flavor instant noodles in November 2013, Uni-President had as of January generated growth of 140% in product sales. Figures from a third-party market survey company cited by Uni-President indicated that 70% of consumers on the mainland had bought its new braised beef-flavor instant noodles in the two-month period.
According to market data provider Nielsen, as of the first half of 2013 Master Kong's share in the Chinese instant noodle market had dropped by 2 percentage points to 55%, while that of Uni-President rose to 16.9%.
The gap was a result of strong sales of Uni-President's kimchi-flavor instant noodles, Nielsen said.
Sales of the new flavor instant noodles totaled 4 billion yuan (US$653 million) in 2012, accounting for 55% of Uni-President's total revenue generated from sales of instant noodles, making kimchi instant noodles the second most popular instant noodle product in China, following braised beef flavor.
However, even as Uni-President catches up with Master Kong in the Chinese instant noodle market, it is evident that the costs involved in climbing to the top are not insignificant.
In Uni-President's financial report for the first half of 2013, the enterprise reported a deficit of 60.31 million yuan (US$9.85 million) despite its instant noodle sales rising 10.4% from the same period last year to 3.78 billion yuan (US$617 million), according to the daily.
Uni-President has attributed the deficit to a surge in marketing costs. Compared with Master Kong's 60% market distribution, that of Uni-President now stands at 50%, up from 20% five years ago.
In 2012, Uni-President completed the establishment of a nationwide sales network on the mainland by setting up outlets not just in cities, counties and townships, but also in stores, along railway lines and roads, airports, factories, construction sites and chain hotels.
Li Zhanshu is director of the General Office of the CPC Central Committee and a member of the Politburo. A native of Pingshan county in Hebei province, Li was born in 1950 and joined the party in ...