How Yili became the first RMB100bn dairy company in Asia: ‘Innovative products have maintained continuous growth’

By Katy Askew contact

- Last updated on GMT

Yili products are China's 'most chosen' according to Kantar figures / Pic: Yili
Yili products are China's 'most chosen' according to Kantar figures / Pic: Yili

Related tags: Yili, China, Dairy

Chinese dairy group Yili is the first dairy company to top annual sales of RMB100 billion in Asia and it has been named the ‘most chosen’ CPG brand in China with a household penetration rate of 92.4%. What’s the secret to its success?

Data released by Kantar Worldpanel in its Chinese Mainland Brand Footprint Report 2022 show Yili now reaches 1.3bn consumers in China, meaning that for the tenth consecutive year it is the ‘most chosen’ FMCG brand in the country.

What is Yili’s recipe to success? Powerful brands, agile innovation, a focus on health benefits during the pandemic and supply chain strength all have a role to play, according to Jason Yu, the managing director of Kantar Worldpanel Division, Greater China.

“Although the Chinese market has undergone rapid changes in the past decade, the leading brands always stay ahead of the curve, set up a sustainable growth model of shoppers through building the power of brands, channels and product innovation. Nowadays, brands must have a deep insight into the impact of pandemic which has led to constantly changing shopping behavior and new usage occasions. It is also critical for them to constantly review their product assortment and supply chain agility as well as the development of new channels to grow against the headwind,”​ Yu observed.

Focus on quality management

Responding to Kantar’s findings, Yili suggested its success is linked to its philosophy that ‘Yili means best quality’. “Yili has established a holistic internal quality management system that involves all employees and whole operation processes, featuring over 1,000 inspections that each Yili product goes through,”​ the company said in a statement.

In its upstream supply chain, Yili has developed a ‘smart farm’ system for more ‘targeted and scientific cow raising and health management’ to provide high-quality raw milk. The Chinese dairy major has also upgraded its processing footprint with investment in ‘smart factories’ equipped with an end-to-end product traceability system that gather and analyze production data for product quality monitoring and prevention to provide early warning about quality risks.

The company is also leveraging technological innovation to get closer to the consumer. Yili has launched a digital platform that enables more ‘efficient and accurate insights’ into consumer needs to support further optimization of product and service quality, the company explained.

The importance of innovation

According to Kantar, as a leading dairy company in China Yili has been able to remain the ‘most chosen’ brand thanks to its focus on innovation and product development.

This, Kantar stressed, has been particularly true in the wake of COVID-19 with product launches concentrating on targeted health benefits including immunity. By building up a ‘wide range of dairy categories with comprehensive health and nutrition product matrix’, Yili have responded to the ‘rising needs of immunity and diversified usage scenarios since the pandemic of COVID-19 began in 2020’.

Yili noted that this year it has launched products that aim to fulfil ‘diverse’ nutritional needs. “Backed by innovative marketing initiatives, Yili's new products and new businesses have achieved rapid growth. The Satine Ultra-Filtered Milk, for example, has been well-received in the market by meeting consumers' health needs. This new product features higher protein and calcium and lower fat and sodium through the application of ultra-filtering technology on raw milk to reduce extra fat, lactose and sodium, along with water, in order to concentrate the condensed milk proteins,”​ the company revealed.

Yili has established 15 innovation centers, based in Asia, Europe, Oceania and the Americas.

In addition to the parent brand, Yili operates 20 ‘sub-brands’. The annual sales of parent brand Yili, AMBPOMIAL and Satine each hit a revenue of over RMB20 billion, while that of Jinlingguan and Youngfun each surpassed RMB10 billion, the company detailed.

“Innovative products have helped Yili to achieve continuous growth. In 2021, Yili realized a total revenue of RMB110.595 billion, becoming the first RMB100 billion-dairy company in Asia.”

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