Rapid innovation: Accelerated NPD strategy reaps rewards for Chinese dairy giant Yili
According to the firm, its total revenue and net profits reached ‘new heights’ this year, rising 12.3% year-on-year in revenue to hit CNY63.5bn (US$9.2bn) and 15.4% year-on-year in profits to hit CNY6.1bn (US$890mn) in the first half of its 2022 financial year (ending August 30th 2022).
“Yili’s milk powder and dairy products business overall achieved a growth rate of 58.3%, which is the fastest [recorded in the local] dairy industry,” Yili Chairman and President Pan Gang stated when announcing the financial results.
“[We also saw] our cheese category grow by over 40%, our liquid milk business grew 31.7% to the largest national market share in China, and our ice cream business has also continued to be the main market leader in the industry, making this our twenty-eighth year of leadership in this category.
“In addition to these value-added products, other items that have been leading the market in their respective categories include our AMBPOMIAL yoghurt drink which holds 65% market share nationally and our organic milk brand Satine.
"[As such], despite the challenges in the external environment, moving forward we remain confident and capable of improving [further and] unleashing our full potential for value creation and future development. “
The firm also emphasised constant new product innovation as a successful strategy by which it has managed to continue growth even amidst adverse conditions such as recurring COVID-19 lockdowns in China, challenged supply chains and inflation.
“[Instead of slowing innovation down], Yili opted to accelerated our pace of rolling out new products – these accounted for 12.5% of revenue in this half,” said Pan.
“Amongst the new products launched in the first half of this year included Satine Ultra-filtered Milk, Cute Star A2β-casein Pure Milk, Jinlingguan Seine Mouiller A2 OPO Organic Infant Formula and many more.
“We have also maintained focus on categories such as organic milk, milk-based nutrients, cheese snacks, natural mineral water and other businesses that show high growth potential, as these categories are growing by over 20% year-on-year – and moving forward we will launch even more innovations.
“We are also extending our reach to novel channels by seizing new growth opportunities in the maternal and infant, catering, e-commerce, community group purchases and other special channels.”
Commitment outside China as well
Yili is also determined to maintain the momentum of its overseas expansion in addition to its local successes, utilising the global operating supply chain network it has built across multiple markets in China, South East Asia and New Zealand.
“We successfully managed to expand overseas revenue by 58% year-on-year via efficient coordination amongst our operations bases in the region,” Yili stated.
“Utilising this leverage, we managed to ensure timely delivery of products to various markets of demand despite COVID-19 and the impacts of inflation.”
In addition to its China headquarters in Inner Mongolia, Yili also has operational bases and production plants located in Indonesia and Thailand, as well as innovation centres and bases in New Zealand and Europe.
