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Nestle's expansion strategy set for Chinese market

By Chen Qide (China Daily Shanghai Bureau)
Updated: 2010-09-09 16:47

Nestle announced an expansion strategy for the Chinese market Thursday to push forward sales of its three newly-launched premium coffee products.

"Our strategy is aimed to open 1,000 shops in China this year to stimulate their sales," said Lin Jianhua, general manager of Nanpu Food (Group) Co Ltd, a sales partner with Nestle.

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Reinforced efforts will be made to increase the number of shops up to 10,000 next year, said Lin.

Sales of these three premium coffee - Koumibaisen, Impressario and Gold - are expected to reach 100 million yuan (US$14.7 million) next year as the nationwide sales network is completed, he said.

Shanghai will have 50 shops this year, which will be risen to about 200 next year, said Adrian Ho, head of Coffee & Beverages Business Unit, Nestle China.

Except Nescafe Gold which was introduced to China in 2003, both Koumibaisen and Impressario are new products on the Chinese market, which are first available in Shanghai, Ho said.

Ever since it was marketed in China, Nescafe Gold has enjoyed a tremendous success with surging sales especially in major cities like Beijing and Shanghai, thus a demonstration of the increasing demand for premium coffee products.

The three premium coffee products imported from Japan are top quality, which are produced with advanced processing technology and fine coffee beans from globally renowned coffee growing areas.

"The launch of the three new coffee products underscores the fact that Shanghai is one of the most mature coffee markets in China and also indicates that China is a market with great potential," Ho said.

A per capita consumption of coffee in Shanghai is 35 cups per year, 10 more than Beijing, while that in other cities is only five to six cups annually, said he.

Nestle now occupies a share of 67 percent to 73 percent in China's coffee market, even though it faces a fierce competition, said Lin.

"We are confident the newly launched premium coffee products will surely win the hearts of Shanghai consumers," Lin said. Sales in the first half of this year increased by 40 percent compared with that in the same period last year thanks to the World Expo, according to Lin.

"Nestle is able to keep an annual growth rate of about 30 percent for its sales in China," Lin said.