interface news reporter | Ma Yue
interface news editor | Ya Hanxiang
Vitasoy finally found a new head of the mainland business.
Vitasoy confirmed to Jiemian News on April 23 that Wang Dong will serve as the CEO of Vitasoy in Mainland China starting from April 18, 2024.
This new coach is a "veteran" in the FMCG field - Vitasoy said in a statement that Wang Dong served as the president of Tupperware China and also held senior management positions in companies such as Procter & Gamble and PepsiCo. Wang Dong has more than 30 years of senior management and business experience in the fast moving consumer goods industry. Vitasoy also expressed its belief that Wang Dong’s appointment will further boost Vitasoy’s sustainable growth and long-term development in the Chinese mainland market.
The reason why the outside world is paying close attention to the new person in charge of Vitasoy’s mainland business is that this position faces complex challenges.
On April 18, 2023, Su Qiang, CEO of Vitasoy International Group Co., Ltd. and CEO of Mainland China, announced his resignation. Later, Lu Botao, CEO of Vitasoy, was appointed as the head of Mainland China. Public information shows that Su Qiang previously served as a professional manager in a number of large fast-moving consumer goods companies. He has served as president of the Nestlé Hsu Fuji joint venture, vice president of Ant Financial Group, general manager of Mars Pet Business China, and general manager of Wrigley East Region. He has also worked in companies such as Johnson & Johnson and PepsiCo, and has more than 20 years of experience in the FMCG industry.
Picture source: Jiemian News Fan Jianlei
Su Qiang, who took the helm at the end of 2021, can be said to have "taken orders in times of crisis." In July 2021, Vitasoy was involved in social incident controversy. Products were removed from the shelves in different channels in the mainland, and the brand image also suffered a major blow.
After Su Qiang took office, he made a lot of efforts to revitalize the brand image, product innovation and channel reform.
For example, when he made his first public appearance after taking office, he once said, "As a Chinese, I am proud to join this national brand."
As for the more critical level of product innovation, Vitasoy during the Su Qiang period It launched new products in oat milk and lemon tea, and gradually focused on the sugar-free tea track. In terms of channels, Su Qiang has spent a lot of energy focusing on offline channels, including focusing on execution and price control, which has played a significant role in repairing Vitasoy's offline channels.
Judging from Su Qiang’s first complete semi-annual report after taking office, in the six months ended September 30, 2022, Vitasoy’s revenue was HK$3.642 billion, a year-on-year increase of 1.05%; net profit was HK$142 million, a year-on-year increase of 33.03% %. Among them, Vitasoy's mainland market business, which is the largest source of revenue, turned a profit, with a net profit of HK$139 million, compared with a loss of HK$33 million in the same period last year.
But from the perspective of the entire industry, Vitasoy has been facing challenges for a long time.
As an old brand founded in Hong Kong, China in 1940, Vitasoy entered the Chinese mainland market in 1994, with ready-to-drink soy milk and lemon tea as its main products, focusing on the South China region, and subsequently expanded to the national market.
As traditional giants and emerging brands continue to invest in ready-to-drink soy milk and ready-to-drink tea, Vitasoy has also encountered fiercer competition. For example, Mengniu, Yili, Nestlé, and Oatly are all competing for the plant milk market; in the field of bottled tea, in addition to continuing to compete with the iced black tea products of Uni-President and Master Kong, Vitasoy's Vita Lemon Tea is also in its new development. The sugar-free tea track is already crowded with large and small brands such as Nongfu Spring, Suntory, Uni-President, Master Kong, and Yuanqi Forest.
This has also caused the mainland market, on which Vitasoy relies heavily, to go from rapid growth to sluggish growth.
In the 2017-2021 fiscal year, Vitasoy’s mainland market revenue increased rapidly from HK$2.67 billion to HK$5.01 billion, and its proportion of Vitasoy’s overall revenue increased from 49.3% to 66.6%.
In the 2021/2022 fiscal year, Vitasoy’s revenue in the mainland market fell to HK$3.913 billion, and operating losses reached 280 million yuan, accounting for 59% of Vitasoy’s overall revenue.
In the 2022/2023 fiscal year, Vitasoy’s revenue in the mainland market further declined to HK$3.509 billion, and its proportion of Vitasoy’s overall revenue also dropped to 55%.
During this process, Vitasoy’s mainland leaders also changed frequently.
In 2017, Yuan Jie, managing director of Vitasoy in China, who had served for 13 years, resigned; in 2018, Zhong Tingyi from Danone became the new chief executive of mainland China, but resigned in 2021 after Vitasoy fell into public controversy; Later, Su Qiang took over at the end of 2021.
In November 2023, the "three-generation succession" of Vitasoy Group was also officially settled. The current non-executive director of the company, Luo Qimei, has been appointed as the vice chairman of the board of directors, effective from November 21, 2023. At the same time, Luo Qimei will continue to serve as a non-executive director of the company. Luo Qimei is the daughter of Vitasoy executive chairman Luo Youli. She has been a non-executive director of Vitasoy since June 2017.
For new coach Wang Dong, his long-term experience in large-scale international fast-moving consumer goods brands is a necessary condition for taking charge of Vitasoy’s mainland business. His experience in the local market is also a key factor that is valued by Vitasoy and hopes to further develop and revitalize the mainland market.
Public information shows that in March 2021, Wang Dong, then Vice President of Franchise Operations of PepsiCo Greater China, attended the kick-off event of the PepsiCo series beverage project with an annual output of 500,000 tons in Yichang, Hubei Province. Master Kong Beverage Holdings Co., Ltd. became PepsiCo's franchise bottler in China in March 2012. Moreover, in 2020, Wang Dong also participated in the deepening strategic cooperation between Dada Group, an instant retail and distribution platform, and PepsiCo Beverages.
But what is left to Wang Dong now is the arduous task of revitalizing Vitasoy.
In November 2023, Vitasoy stated in its interim performance report that in the first half of the fiscal year 2023/2024, its mainland revenue reached HK$1.962 billion, a year-on-year decrease of 11%. Net profit reached HK$189.5 million, a year-on-year increase of 36%. The financial report stated that this was mainly due to the restructuring of the organizational structure and the control of operating costs during the period.
As mentioned in the financial report, Vitasoy will continue to improve product supply, strictly implement sales and marketing plans, increase growth potential and improve profitability in the second half of the fiscal year. From a longer-term planning perspective, how to further enhance Vitasoy's product competitiveness and channel capabilities in the crowded beverage market, as well as further enhance its product image, will undoubtedly be a test for new coach Wang Dong.
