What caught my eyes recently is the buy one, get one free promotion for Huiyuan’s Bing Tang Hu Lu 冰糖葫芦 or hawflakes fruit juice at Aeon Big, Mid Valley in Kuala Lumpur, Malaysia. This drink is an adaptation of the popular Chinese snack sugarcoated haws but in the drinkable format. Huiyuan, China’s biggest pure juice and nectar juice maker, launched the drink during 2013 Chinese New Year amidst mixed reception. Some find the drink tastes bad and prefer to eat the actual sugarcoated haws but there are consumers who love it. Yours truly has tasted it in China but agree it is better to eat the real thing.
In Malaysia, the Huiyuan’s Bing Tang Hu Lu drink seems to have met its Waterloo moment. The importer HPG Marketing (M) Sdn Bhd is selling it cheap now. The gift pack, which is likely meant for the 2014 Chinese New Year, is selling for RM19.88 for a pack of 15x250ml. By paying RM19.88, you will take home 2 boxes totaling 30 drinks. Malaysians have no tradition of eating sugarcoated haws. Even if they eat it, they tend to taste it when traveling in China for the photo moment. Moreover, you do need to love the strong hawthorn taste to finish the whole bottle.
Buy one, free one at Mid Valley Aeon Big
Even if Malaysians, mainly referring to ethnic Chinese, do travel to China, high chances they wouldn’t know about this drink. Therefore, this sort of drink should be sold through China food store. There is one outside UCSI University catering to mainland China students wanting to taste something back home. Also, instead of selling it in gift pack, the importer should sell the 250ml drink individually. People will not want to pay for RM20 for a drink they haven’t tasted before. For those who really like liquid hawflakes juice, yes, they are available at Aeon Big at a deep discount. So grab them now.
Aeon Big, formerly Carrefour, has introduced the Topvalu range of private label products in Malaysia. As with all private label products, the aim is to deliver the best price without sacrificing quality. Consumers are feeling the heat over the rising cost of living and this is not helped with the impending introduction of the 6% GST in April 2015. Many are looking for ways to cut their spending such as buying in bulk, dining out less and turning to group buying sites.
Private label seems to be the panacea but private label only represented 2% of dollar share in Malaysia, according to the Nielsen Private Label Global Report, 2011. An earlier Nielsen report valued the private label market at RM240 million or 4.3% of total sales in February-September 2008, up from 3.8% a year ago. The numbers range from 2% to 4.3% but they do show private label share has not exceeded 5% and may in fact falling eg 2% in 2011.
Private label seems to be a Western thing. This concept hasn’t really taken off in Asia including in China despite numerous attempts to try winning the hearts and minds of Asian consumers. According to Nielsen, no countries in Asia has a private label share higher than 6%. Dia, the hard discount blue chip of Carrefour, never seems to be able to use private label as the key pillar of its price image strategy in China. Despite having a total of 954 private label items in China in 2010, private label share stood at a mere 10% lower than other emerging markets such as Brazil and Turkey, each with 35%. Dia announced in 2014 that it was withdrawing from Beijing but is keeping the Shanghai stores running, which shows Dia’s discount model is failing in China.
The key barrier for private label adoption in Asia is consumers are not really convinced of the quality. Nielsen‘s study shows of the bottom 10 countries that do not agree with the statement “Supermarket own brands are a good alternative to other brands”, eight are from Asia with Malaysian and Japanese consumers (35%) in least agreement with the statement.
Malaysian consumers have no qualm buying store-brand tissue, toilet roll, plastic utensil, mineral water, and other products they perceived where the risk is low and there is not much difference in the perceived quality. However, they are more choosy when it comes to products they enjoy. In China, consumers want quality assurance as they are constantly being inundated with food scares. With big brands in China failing to pass the national quality tests, what’s more for private label where the manufacturing of the products are usually outsourced to SMEs.
Tesco Loves Baby
In Malaysia, the low private label penetration in grocery has not deterred Tesco from introducing its new Tesco Loves Baby brand in April 2014. The retailer has set an ambitious target to capture 50% of the baby care and products market share (within Tesco stores or the overall baby care market??) by the end of 2014. Tesco has about 71% market share within key account hypermarkets and 38% within the modern trade category, according to Nielsen’s private label report released in February 2014. Tesco even has a website for the new baby range at http://baby.tesco.com.my, a strong indication that Tesco wants to win.
Back to Aeon Big, the key problem for Topvalu is the design, which exudes the signs of being cheap and low in quality. There is simply too many white spaces in the Topvalu design (left) compared with a more colourful pack design for the Tesco juice (right). So, the key to private label acceptance in Malaysia is simply put extra thought to the pack design and white space does not sell.
Pick a fight with the branded peers by placing the private label product next to the nearest competitor. Tesco is famous for using this approach to highlight the price advantage over the leading brands.
Tesco own brand instant noodles on the right (red and yellow)
Shelve display matters. Tesco is known for populating the entire shelve with its own private label range as shown in the example above.
One of the strangest thing about Malaysian consumers is we are willing to pay more for imported products including private label products. Premium imported private label products such as Waitrose and Marks & Spencer are prized for their quality. Private label sells if they are fully imported. This applies to Topvalu products with Japanese characters imported straight from Japan.
Private label fits the needs of the HoReCa (hotel, restaurant and catering) market. Restaurants buy in bulk and all they care about is low price and reasonable product quality. Packaging does not matter as long as the price is right.
Conclusion, private label does have potentials in Malaysia.
1.) Private label is ideal for HoReCa.
2.) Private label pack design has to look less like private label and resemble more like branded goods with less white spaces.
3.) Private label sells if they are imported eg. Waitrose and Marks & Spencer.
4.) Private label wins by occupying crucial shelve space and placing it next to leading brands to highlight the price advantage over branded goods.
7-Eleven Philippines recently announced it is offering free WiFi to its Every Day! Rewards Card holders. However, it come with a catch. You need to redeem with points. The rule says, you get 15 minutes of Every Day! WiFi with every one point. To accumulate one point, the consumer needs to spend PHP50 (USD1.12) in a single or accumulated purchases.
WiFi does attract more walk-in customers. Without the free WiFi and the seating area, 7-Eleven Indonesia would not be as successful as a place to hangout for Indonesian youths.
So, why not give the customer below free WiFi as “millions of people want it free.” Even the new kid in town FamilyMart Philippines offers free WiFi. The Internet is the future for retailing. Free WiFi can help stores offer personalised coupons and identify products that match the interest of the shoppers. So it remains one point for 15min of WiFi.
We all know breakfast is the most important meal of the day but many Malaysians regularly skip breakfast. The Malaysian Adults Nutrition Survey (MANS), carried out in 2002 and 2003, showed one in 10 (10.8%) did not eat breakfast. A more recent survey on Malaysia published in the American Journal of Food and Nutrition in 2011 revealed a similar finding. When asked if they eat breakfast on the day the survey data was collected, 10% said no.
Even if nine out of 10 consume breakfast, it does not really mean they are eating healthy breakfast. Most of the usual Malaysian breakfast fares including nasi lemak and Chinese oil stick are high in calories and fat. This is where the money lies. Brands want you, the consumer, to eat more nutritious breakfast to start your day. Milo recently organised the annual Milo Breakfast Day on 20 April 2014, an event participated by about 20,000 people. The mission was to “rally the nation in making the right nutritional choices for a balanced breakfast and to encourage an active lifestyle”.
F&N Seasons NutriSoy
However, many brands do not emphasise nutrition in their breakfast marketing. They simply want you to have something pleasant to start your day. Such positioning is taken by F&N, the maker of the Seasons Nutrisoy range of soya bean milk, for its latest F&N Seasons NutriSoy Breakfat Love campaign. The key message is love your breakfast and remember to eat it.
For Lam Soon, the producer of Home Soy, the tagline for its latest instant breakfast soya product is it “warms you up to a great day!” The main unique selling point of this product is it comes in the powder format, ideal for at home/office consumption and easy to carry around. The two variants are original without oat and with oat. Both are priced RM9.90 per pack at Aeon Big.
But for all Malaysians, we just want something quick, cheap and tasty. It is even better if it comes free. McDonald’s knows it and that is why its National Breakfast Day has been so popular. McDonald’s breakfast campaign has successfully converted many non-users into customers, thanks to the affordable pricing, innovative new products and price promotions (eg. free McMuffin and RM 1 Brekkie Wrap).
Similar to McDonald’s value meal, Oldtown, a coffee chain similar to Starbucks but with affordable price, is using MyBreakfast to drive footfall. The value meal program, launched in 2010, has increased usage during the breakfast daypart as patrons not only can enjoy their local breakfast fares but can also use the WiFi for free.
Breakfast is an important battle ground for brands as they are still many consumers who have yet to be persuaded to eat breakfast. You don’t need to tell people to eat lunch or dinner but you can for breakfast. The challenge is converting more people to consume your products for breakfast.
The good news for breakfast contenders is Nestle is going to increase Milo’s prices in Malaysia by 5-7% in May 2014 due to higher raw material prices However, the impact of the price hike will not be strong as Malaysians have been brought up drinking Milo and still can’t get enough of it.
Eru is the new cheese in town. The cheese products from the independent Dutch cheese maker are distributed locally by DPO International Sdn Bhd, which is also the distributor of Elle & Vire. Based on store checks carried out at Aeon Big Hypermarket, Mid Valley, in April 2014 Eru is priced at the premium and is the most expensive sliced cheese at Aeon Big. Apart from sliced cheese, other Eru cheese products include Gouda and cheese for kids. There is a belief that Asians including Malaysians do not eat cheese but this does not apply here.
There is a huge varieties of cheese products in hypermarkets and even more can be found in high-end supermarkets but the selections tend to be limited to packaged cheese rather than unpackaged cheese. Most Malaysians have not acquired the taste for strange, smelly cheese such as blue cheese but we do love our pungent durian for sure.
Sliced Cheese Store Check: 20 April 2014 – Aeon Big
Gram
RM
KG/RM
Eru Cheddar
150
8.5
56.7
Eru Cheddar with Herbs
150
8.5
56.7
President Toast with Emmental
200
11.0
55.0
President Burger with Cheddar
200
11.0
55.0
President Sanwich with Cheddar
200
11.0
55.0
The Laughting Cow 10 Slices
200
11.0
55.0
Mother’s Choice Extra Light Cheddar Cheese Slices
200
9.0
44.8
Mother’s Choice Cheddar Cheese Slices
200
9.0
44.8
SCS Cheese Black Pepper
200
9.0
44.8
SCS Cheese Slices Smokey BBQ
200
8.5
42.5
SCS Cheese Original
200
8.5
42.5
Bon Appetit Cheese Slices
170
7.5
44.1
Kraft Hi-Calcium Singles
125
6.9
55.2
Kraft HI-Calcium Singles
250
11.0
43.8
Anchor Cheddar Cheese Slices
200
8.5
42.5
Chesdale
125
6.0
47.6
Chesdale
250
9.0
35.8
Bega Super Slim
200
8.0
40.0
Bega Black Pepper
200
7.0
35.0
Bega BBQ Slices
200
7.0
35.0
Cowhead Cheese Single 12 Slices
250
10.0
39.8
Lactima Lower Fat High Calcium Cheese Spread Singles
Goji energy drink is nothing new in the West. Anheuser-Busch launched its goji berry energy drink 180 Red in 2007, while IronClad has its Goji Energy Drink. In China, Red Bull dominates the energy drink market but the Red Bull isn’t the one made by Austria’s Red Bull GmbH but produced by Thailand’s Red Bull Vitamin Drink Co. Recently, natural ingredients from the Amazon such as acai and guarana have become popular through Recca and Hong KongAmazon Group.
Now, goji has become the next emerging natural ingredient in energy/functional drinks in the country. Sinopec Ningxia Easy Joy (中石化宁夏易捷有限公司)sold RMB150 million worth of 启劲 (Star Energy) in 2013, of which most or RMB110 million were sold through Sinopec’s own EasyJoy petrol station convenience stores. That is why even though Star Energy, which officially debuted in the market in 2013, is rarely seen outside of EasyJoy petrol station convenience stores. The company has plans to make its presence felt in other distribution channels.
Sinopec Ningxia Easy Joy has its own goji fields, measuring some 50,000mu in Zhongning and Tongxin in Ningxia through a joint venture with the local government. The entity is engaged in the planting, processing and selling of goji-based products.
Type 88 contains 88 goji berries, while type 158 contains 158 goji berries
The company leverages on its parent’s extensive EasyJoy petrol station convenience stores to reach out to motorists looking for a quick, healthy energy boost. Star Energy is available in 14,000 of the 23,000 EasyJoy petrol station convenience stores. It is priced at a premium at RMB7 for a 248ml can and is positioned as a natural plant-based functional drink. A 250ml Red Bull, on the other hand, sells for RMB5.3.
Even though it is a plant-based drink, the marketing of Star Energy resembles the marketing techniques usually used by energy drinks companies. Star Energy’s tagline is “If you want to have strength, drink Star Energy.” The advertisements focus on delivering the message to motorists, white collar workers doing overtime and for those who engage in sports.
The debut of Star Energy not only shows the potential of goji as a ingredient in functional/energy beverages, it highlights Sinopec’s ongoing move to diversify from the oil and gas business, which is tightly controlled by the government. The recent plans to list the EasyJoy convenience store business and the selling of Star Energy beverage through the expanding EasyJoy network show Sinopec is moving in the right direction.
B2C retailers in China have set their eyes firmly on convenience stores to address the so-called “last mile” problem – how to deliver products quickly and efficiency to consumers. In the US, Amazon.com has toyed with the idea of drone delivery. However, this is not feasible due to security concerns, both in China and in the US. The best bet in China is through convenience stores. Convenience stores are near to consumers, have a strong network of stores and tend to open 24 hours a day.
In March 2014, JD.com, China’s second biggest B2C retailer, announced it entered into online to offline (O2O) agreements with 12 convenience store chains in 15 cities including Shanghai, Beijing, Guangzhou, Dongguan, Wuhan, Xian and Dalian. These chains collectively own more than 10,000 stores throughout the country. They include Quik (快客), Buddies (良友), Meiyijia (美宜佳), Guoda365 (国大365), Renben (人本), Good Neighbours (好邻居), Zhongyanghong (中央红), LiKe (利客), Yituanhuo (一团火), Meiri Meiye (每日每夜) and Puluoyun (普罗云).
The idea is once consumer places the order, they can choose to pick up their order from the nearest convenience store. JD.com has previously introduced an innovative one-hour express delivery service in December 2013 in cooperation with Tangjiu (唐久) convenience store in the coal-rich Shanxi province in northern China. Therefore, the latest O2O arrangement runs in the similar vein as the Tangjiu example.
JD.com – Tangjiu online store
For convenience store operators, not only do they serve as a pick-up destination for B2C operators, they can also increase their SKUs by making more products available online as illustrated in the Tangjiu-JD.com partnership.
With their burgeoning B2C business, the “last mile” problem also affects department stores. As department stores shift more of their sales online, they are increasing coming to grips with the reality of B2C and the challenges of delivering their goods to shoppers. The solution for some is to set up their own convenience stores.
Rainbow Department Store announced in early April 2014 that it plans to establish its own network of convenience stores to address the “last mile” problem. The first outlet will open in Shenzhen in June 2014. Apart from selling through the physical stores, the proposed convenience stores will encourage consumers to buy online as more products will available on the online store.
Better Life Commercial Chain Huimiba Convenient Stores
Rainbow Department Store was not the first department stores to dabble into convenience stores. Better Life Commercial Chain already has a network of Huimiba convenience stores in Changsha city since 2011. There are about 18 stores listed on the website. Shirble Department Store runs its own chain of 24-hour Shirble Express convenient stores. These convenient stores are effective platform for O2O.
Shanghai Hualian Lawson still bleeding
Amidst the positive signs that convenient store is the perfect vehicle for O2O to fill the “last mile” gap, the key problem facing convenient store chain operators in China is the lack of profit. Many leading chains including 7-11 in Beijing and Lawson in Shanghai do not make money. In fact, they are operating at a loss. Shanghai Hualian Lawson, the company that runs the Lawson chain in Shanghai, has been unable to make a profit.
E-Commerce China Dangdang Inc IPO in November 2010. Look what happens after the IPO?
Even B2C players are not making money. JD.com in its updated IPO prospectus said its net loss in 2013 was RMB50 million (US$8.11 million), narrowed from a net loss of RMB172 million a year ago. There is a 50-50 chance that JD.com will swing into profit in 2014 as it needs a clean set of financials for its IPO (We all know what happens to NYSE:DANG). It is thus safer to say JD.com revenue is expected to continue to rise. In 2013, the company posted revenue of RMB69.34 billion (US$11.24 million), up from RMB40.35 billion a year ago.
The whole B2C is on shaky ground as many B2C retailers themselves are burning cash hoping to outlast their rivals. That is why they need raise cash from IPOs. Using convenience stores to bridge the “last mile” gap can be a solution for the logistics problem. However, for convenient stores, the alliance with B2C companies needs to be profitable to both parties as convenient stores are also in desperate need to put their business on a profitable footing without which their business will not be sustainable. Therefore O2O is a marriage of convenience between B2C and convenient stores.
The Chobani Greek Yogurt appearing lately at Village Grocers in Malaysia is actually made at the new Chobani factory in Australia’s Dandenong South in the state of Victoria. The US company commissioned the new plant in December 2012. According to foodnavigator-usa.com, the factory has now increased its output to 25,000 cases per day from 25,000 cases per week. That’s a huge increase within one year.
The article mentions Chobani is now the second best selling yogurt in Woolsworth and has shipped its first palette to Asia. That’s the reason why we are seeing Chobani in the Malaysian market lately.
In Singapore, Chobani has struck a deal with Frosts Food and Beverage Pte Ltd to make available nine Chobani Greek Yogurt SKUs in the local market. With a short distance from Asia, the Australian plant does make economic sense as the manufacturing site for products destined for Asia. In Singapore, Chobani is available at NTUC Fairprice and Cold Storage.
The nine SKUs in Singapore include 170 single-serve pots in Plain, Blood Orange, Blueberry, Honey, Mango, Raspberry, Passion Fruit and Strawberry, in low-fat and fat-free varieties. The 907g multi-serve format fat-free Chobani will also be made available. The recommended retail price for the 170g pots is S$3.95 (RM10.21). At Village Grocers, Malaysia, the same 170g pot sells for RM8.69, that’s 15% cheaper than in Singapore.
Nestle Bliss Yogurt Drink - Image taken by the author
In Malaysia, one image is no longer enough to convey the message when addressing women consumers. It now takes two – one with the tudong (headscarf) and one without. Nestle’s latest ad for its yogurt drink shows just that, one female donning the headscarf and another without, to promote Nestle Bliss to a multicultural audience.
The contemporary representation of Muslim women in advertising in Malaysia has changed from a Western-centric, no-tudong look to become more acceptable of models wearing the headscarf. The shift is a reflection of the rising tide of the Hijab movement in the Islamic world where women are displaying pride in their identity. In Indonesia and in Malaysia, the Hijaber movement has become a fusion of faith and fashion.
Young Muslim women are dressing themselves to become chic and beautiful in a hijab, setting them apart from older women. The Hijaber movement also provides Muslim women with an outlet of expression of their taste in fashion, while doing it within the bounds of Islam.
Shila Amzah epitomises the Hijaber trend in Malaysia. She is making her name known regionally in the I Am A Singer 2 reality singing contest in China and appearing confidently with the Hijab look. Yuna is another Malaysian singer/songwriter who has gone from a local singer to a rising global star through her English songs, all the while preserving her Hijab appearance.
Shila Amzah
Yuna, songwriter/singer
Even Rexona has jumped into the bandwagon featuring three female students, one of them with the headscarf, in its latest deodorant TVC in Malaysia in 2014. Hijab is often presented as an “empowerment” and a “choice.” As time passes, tudong-covered female models may even become necessary on TVCs to reach out to the key young Muslim women audience.
Emmi Swiss Premium Greek Style Yogurt Natural - Image taken by the author
We were initially skeptical of the reception of Greek yogurt in Malaysia due to its high price point, which is 1.5 times more expensive than an ordinary yogurt (comparing Nestle Greek Yogurt with Nestle non-Greek yogurt variant). However, we have now changed our minds as we have detected a steady flow of new Greek yogurt brands into the country, an indication of demand.
Emmi Swiss Premium Greek Style Yogurt Natural – Image taken by Mini Me Insights
Switzerland-based Emmi is the third company to introduce Greek yogurt in the Malaysian hypermarket channel after Nestle and Sunglo. This Swiss Premium Greek Style Yogurt weighs 150g and sells for RM 7.10 (Aeon Big) or RM 7.50 (Village Grocer). At this price, it is the most expensive Greek yogurt in the hypermarket chain, slightly over two-thirds (70%) more expensive than the 135g Nestle Greek Yogurt on a per unit basis.
Chobani range
Another interesting development is Chobani, the brand with the biggest share of the US Greek yogurt market, has finally arrived in Malaysia. Distributed by Gourmet Partner (M) Sdn. Bhd., a unit of Angliss Hong Kong Food Service, Chobani is currently available at Village Grocer, a high-end supermarket chain and perhaps in other high-end chains as well.
Chobani and Emmi Greek yogurts are priced at the upper mid-end, below Fage and Tamar Valley, while Nestle and Sunglow are at the bottom of the price chart. The entry of more brands such as Emmi and Chobani into the Greek yogurt category could potentially turn Greek yogurt into a mainstream category in the Malaysian yogurt market.
Greek Yogurt Store Check: Village Grocer at 1Mont Kiara, 14 April 2014
RM/KG
Volume (g)
RM
Fage Fruyo 0% Fat Free Bluberry Greek Yogurt
67.6
170
11.5
Fage Total Natural Honey Walnut Greek Yogurt
69.4
180
12.5
Fage Total Natural Greek Yoghurt
64.0
500
32.0
Fage Total 2% Natural Greek Yoghurt
64.0
500
32.0
Fage Total 0% Fat FreeGreek Yoghurt
64.0
500
32.0
Tamar Valley Greek Style Yoghurt with Rapsberry (98% fat free)
60.8
230
14.0
Tamar Valley Greek Style Yoghurt with Passionfruit (98% fat free)
Nutrifood's Tropicana Slim has launched Tropicana Slim Drip Coffee Seville Orange made from 100% Arabica Toraja with a herb, fruit and chocolate flavour note....
