What is Sales and Marketing Strategy of Feihe Company?

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What is the Sales and Marketing Strategy of Feihe?

Feihe, a leading Chinese dairy company, has navigated a challenging market by implementing innovative sales and marketing strategies. Facing declining birth rates, the company launched a nationwide subsidy program in March 2024, offering incentives and support to expectant families.

This strategic initiative highlights Feihe's commitment to adapting its approach in the competitive infant formula sector. The company's evolution from its founding in 1962 to its current market dominance is a testament to its effective go-to-market tactics.

Feihe's sales and marketing strategy is multifaceted, focusing on broad distribution, impactful advertising, and strong brand positioning. The company has secured the top spot in the Chinese infant formula market for six consecutive years as of 2024, and globally for four consecutive years. In 2024, Feihe reported a revenue increase of 6.2% to RMB20,748.6 million and a net income rise of 11.1% to RMB3,654.1 million, demonstrating the success of its adapted strategies. This performance is particularly notable given a 33.5% profit decline in FY23, underscoring the effectiveness of its recent campaigns and market penetration efforts. Understanding how Feihe reaches its customers, builds brand loyalty, and differentiates its products provides valuable insights into successful market engagement. A key element of their strategic planning can be further understood through a Feihe Porter's Five Forces Analysis.

The company employs a robust omnichannel sales approach, blending a substantial offline presence with a growing digital footprint to connect with consumers. This strategy ensures broad market reach and caters to diverse purchasing preferences.

Extensive Offline Network

The company's primary sales channel is its nationwide offline distribution network. As of June 30, 2024, this network included over 2,800 offline customers and more than 80,000 retail points of sale.

Diverse Offline Partnerships

These offline customers encompass distributors, direct partnerships with major maternity store operators, supermarkets, and hypermarket chains. Offline sales contributed a significant 76.8% to total dairy product revenue in the first half of 2024.

Strategic E-commerce Integration

To capitalize on e-commerce growth, the company sells directly through major online platforms and its own digital channels. This digital push is crucial for reaching younger demographics and enhancing customer acquisition.

Innovative Digital Initiatives

A key digital initiative is the partnership with JD Super, offering a 28-day 'farm-to-milk bottle' delivery service. This has led to an eightfold year-over-year sales increase for participating products, with an average delivery time of 22 days.

Feihe's Omnichannel Advantage

The company's Feihe sales strategy is built on a strong foundation of offline presence, complemented by strategic online expansion. This dual approach is central to its Feihe business strategy and understanding the Target Market of Feihe.

• Leveraging over 80,000 retail points of sale nationwide.
• Early adoption of partnerships with key maternity stores.
• Significant revenue contribution from offline channels (76.8% in H1 2024).
• Expanding direct-to-consumer sales via e-commerce platforms and proprietary apps.
• Pioneering rapid delivery services to enhance product freshness and customer experience.

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The company employs a comprehensive marketing strategy that blends traditional and digital methods to enhance brand recognition, attract potential customers, and boost sales. This approach is central to its overall Growth Strategy of Feihe.

Extensive Face-to-Face Seminars

A cornerstone of the company's marketing involves numerous in-person events. These include specialized seminars like 'Mother's Love,' alongside Carnivals and Roadshows.

Customer Acquisition Through Events

In the first half of 2024, the company hosted approximately 460,000 of these events. This significant outreach resulted in the acquisition of over 1.43 million new customers.

Annual Seminar Volume

For the entire year ending December 31, 2024, the total number of face-to-face seminars conducted surpassed 920,000.

Digital Engagement Strategy

Digitally, the company prioritizes increasing consumer interaction online. It also focuses on targeted and effective exposure across various digital media platforms.

Adapting to Market Trends

The company's marketing mix has been refined to address challenges such as the declining birth rate. This led to intensified marketing efforts, contributing to an 18.1% profit increase in the first half of FY2024.

Nationwide Subsidy Program

A key innovation is the nationwide subsidy program, launched in March 2024. This initiative provides financial aid and services to expectant families, supported by an anticipated RMB 1.2 billion fund.

This program represents a strategic pivot towards direct consumer engagement and support. The aim is to encourage birth rates, which in turn is expected to boost demand for infant formula, reflecting a sophisticated Feihe sales strategy.

Key Marketing Tactics and Outcomes

The company's marketing tactics are designed to build brand awareness, generate leads, and drive sales, contributing to its overall Feihe marketing strategy.

• Extensive use of face-to-face seminars, including 'Mother's Love' seminars, Carnivals, and Roadshows.
• Acquisition of over 1.43 million new customers through approximately 460,000 seminars in H1 2024.
• Over 920,000 face-to-face seminars conducted in the full year 2024.
• Focus on maximizing online interactivity and targeted digital media exposure.
• Nationwide subsidy program launched in March 2024 to support expectant families.
• Strategic shift towards direct consumer engagement to stimulate demand.

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Feihe's brand positioning is built on the powerful message 'More Suitable for Chinese Babies' (更适合中国宝宝体质) and 'Wise Babies Opt For Feihe' (聪明宝宝喝飞鹤). This strategy highlights the company's dedication to understanding and catering to the unique physiological needs of Chinese infants.

Scientific Foundation for Local Needs

Feihe differentiates itself by emphasizing extensive research into Chinese mothers' breast milk. This focus allows them to tailor infant formula to the specific biological needs of Chinese babies, a key unique selling proposition.

Building Trust Through Data and Collaboration

The company has developed a comprehensive Chinese breast milk database with over 1,500 samples. Collaborations with leading research institutions further enhance its formulations, building trust and a premium brand reputation.

Market Leadership and Quality Assurance

Feihe has maintained its leadership in China's infant formula sector, holding a 21% market share as of December 31, 2023, according to AC Nielsen. Frost & Sullivan data shows Feihe has ranked first in the Chinese infant formula market for six consecutive years as of 2024.

Adaptability and Portfolio Diversification

Responding to market shifts, Feihe has diversified its portfolio to include adult milk powder and liquid milk. This strategic move addresses changing consumer demands and the impact of declining birth rates.

Commitment to Vertical Integration

Feihe's commitment to quality is reinforced by its vertical integration strategy. This control extends from pasture management to production, ensuring both freshness and safety in its products.

Innovation in Product Development

The company invests in innovative products, such as the Astrobaby Zhuorui series. This demonstrates a forward-thinking approach to product development and market relevance.

Global Recognition

Feihe has been the top seller in the global infant formula market for four consecutive years as of 2024. This achievement underscores its strong brand perception and product quality on an international scale.

Addressing Consumer Sentiment

The brand actively responds to consumer sentiment, including the growing demand for premium products. This adaptability is crucial for maintaining its competitive edge in a dynamic market.

Strategic Market Positioning

Feihe's strategic positioning, focused on suitability for Chinese babies, has been instrumental in its success. This targeted approach resonates deeply with its core consumer base.

Euromonitor Data

Euromonitor data indicates Feihe held a 17.5% market share in 2024. This data point further solidifies its significant presence in the infant formula market.

Feihe's sales strategy is deeply intertwined with its brand positioning, focusing on building trust and demonstrating superior suitability for Chinese infants. This approach is evident in their consistent market leadership and efforts to understand consumer needs. The company's robust marketing strategy emphasizes scientific research and local adaptation, which are key differentiators in the competitive infant formula market. Analyzing Revenue Streams & Business Model of Feihe provides further insight into their overall business strategy and how their brand positioning supports their financial performance.

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Key campaigns are central to the company's robust sales and marketing strategy, driving brand recognition and customer engagement. These initiatives are designed to build community, foster trust, and ultimately increase product adoption across various demographics.

Face-to-Face Engagement

The company has conducted a significant number of face-to-face seminars, including 'Mother's Love seminars', Carnivals, and Roadshows. In the first half of 2024 alone, approximately 460,000 such events were held, successfully acquiring over 1.43 million new customers.

Fresh Formula Delivery Partnership

A notable campaign is the partnership with JD Super for a '28-day farm-to-milk bottle' fresh formula delivery service. Launched in August 2023, this initiative guarantees product freshness and has led to an eightfold sales increase year-over-year for the featured formulas.

National Subsidy Program for Births

To address China's declining birth rate, a nationwide subsidy program was launched in March 2024, supported by a RMB 1.2 billion (US$166.5 million) fund. This program offers expectant families at least RMB 1,500 (US$206.34) in subsidies along with comprehensive prenatal and postpartum support.

Premium Product Launch Success

The successful introduction of the Astrobaby Zhuorui series, a premium-priced product, has significantly strengthened the company's market standing. This product is recognized as a leader in China's omni-channel infant formula sector, contributing to strong financial results.

These diverse campaigns highlight a multi-faceted approach to market penetration and brand loyalty, integrating direct consumer interaction, innovative e-commerce solutions, social responsibility initiatives, and premium product offerings. This comprehensive Feihe sales strategy aims to solidify its position in a competitive market, demonstrating effective Feihe customer acquisition tactics and a strong Feihe business strategy. Understanding these campaigns provides insight into the Competitors Landscape of Feihe and the company's overall Feihe marketing strategy.

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