Oatly is proving its value in the investment world

Recently, the Swedish oat-milk maker Oatly AB has sold a $200 million stake to a group led by private-equity giant Blackstone Group Inc. that includes Oprah Winfrey, Natalie Portman, former Starbucks Corp. chief Howard Schultz and the entertainment company founded by Jay-Z. The move is a sign of growing interest in milk made with plant alternatives.

What is Oatly?

Oatly is a vegan food brand from Sweden which produces alternatives to dairy products from oats. It was founded in 1990 using research from Lund University and today, Oatly is Scandinavia’s leading brand of plant-based products.

Oatly entered the US market four years ago and the product proved so popular it created shortages. Oatly announced its first factory in the US in 2018 and plans to open a second this year, part of a wider effort to add plants close to its customers. The firm's products are available at 50,000 locations across 20 countries.

In addition, in 2016, it formed a Joint Venture with China Resources Corporation (CRC) which is a Chinese state-owned conglomerate that owns a variety of businesses in Hong Kong and Mainland China. In early 2018, Oatly started its operations in China and its APAC HQ is in Shanghai. It has since opened an office in Shanghai and deployed a new Chinese character for “vegan milk” to attract more milk drinkers to its products. Oatly is now sold in supermarkets, as well as Starbucks and Pacific coffee shops.

Reasons of Oatly partnerships

Prior Oatly investors include Belgium-based Verlinvest and China Resources, a state-owned company.

Then Oatly chose to partner with Blackstone Group because of their enormous resources and unique reach.

The $200m investment announced on represents about a 10% stake Oatly, putting the firm's value at about $2bn. The commitment of its new partners in supporting us and promoting our mission is a clear indication of where the world is going, which is in a new, more sustainable direction.

Indeed, Oprah's recent investment in Oatly aligns with her interest in helping the environment. She is only the newest star to invest in plant-based food companies. Snoop Dogg is an investor in Beyond Meat, as well as Leonardo DiCaprio and others.

Growth of Oatly products demand in US and China

Plant-based milk, specifically oat milk, continues to increase in popularity. Oatly is one of the closest tasting plant milks to the real thing and consumers have adopted it because of this close semblance to dairy.

Oatly sales doubled in 2019, growing from $100 to $200 million in less than a year, as more plant-based consumers expanded their tastes beyond soy, almond, and coconut milks. Therefore, sales of oat milk are expected to increase rapidly in coming years, also due to an increased dairy allergies and concerns about dairy's environmental impact which push shoppers to look for alternatives.

In US about 41% of households purchased vegan milk last year. In addition, Oatly has expanded its products from milk, to ice cream and yogurt and is seeing great growth in China.

This successful fundraising round will allow Oatly to further extend its supply network to Europe, the United States and China.

Oatly's efforts for eco-sustainability

Oat milk is full of protein and has a low impact on the environment, and Oatly is known as one of the most environmentally-conscious companies.

Oatly is hoping to inspire others in the industry to follow its sustainable lead. In recent months, the company has made significant changes to its business model to help fight climate change.

As stars continue to invest in the plant industry, more consumers will become aware of the positive impact that plant-based foods have on human health, the environment and farm animals.

What will Oatly's future look like?

The company faces increased competition, as firms such as PepsiCo's Quaker Oats and dairy giant HP Hood launch their own brands.

New milk alternatives, made from products like peas, have also gained in popularity among consumers. In the US, dairy companies, which have lost ground to the alternatives, have also attacked plant-based rivals over the sector's nutritional claims.

Therefore, despite its success today, what will Oatly's future be?

If it continues to have such innovative marketing strategies and adapt to local markets and local demand, it will certainly have no problems.

To know the reasons of Oatly’s success, read the following article:

• https://www.marketingtochina.com/oatly-another-swedish-success-story-in-china/

Mom & baby products market growth has shown no sign of stopping in recent years in China

China's maternal and infant market is expected to see steady growth over the next decade, with online distribution channels playing a vital role in bolstering consumption, due to growing demand from young parents who pursue high-end lifestyles, particularly in lower tier cities.

The increase in population in China has brought an increase in the demand for mother and babies products, stimulating the development of the related market.

Revenue from the maternal and infant market in China reached 2.9 trillion yuan last year, and the figure is expected to reach 3 trillion yuan in 2020. The whole industry will maintain a 20-to 30-percent annual growth rate in the next 10 years.

A growing online presence for mother and babies sector in China 

The growing online presence through both e-commerce and social media seems to indicate a promising future for the mother and baby market in China.

From community e-commerce, to user reviews left online, to simple discussion of new products on social media, Chinese mothers are using Internet as a source of information more than ever.

During Covi-19 outbreak, the demand for mother and baby products has been high. For example, on JD.com sales of daily necessities, such as baby and mother clothes, artificial milk and diapers, increased 10 times on a yearly basis.

With the rise of New Retail, or the integration of online and offline sales platforms, it is foreseeable that retail competition will grow in intensity.

Chinese consumption of mother and babies products

The post-1980 and post-1990 generations dominate the online maternal and infant goods sector, with baby clothes and diapers being the most important categories of online consumption.

The demand is not restricted to first- and second-tier cities, but has seen growth demand from lower-tier cities. Indeed, it is interesting to note that the growth in consumption from third and fifth tier cities is higher than that of first and second tier cities, showing enormous potential for the China’s mother and babies market.

Chinese families are increasingly demanding higher quality and premium products. Faced with increasingly demanding consumers and with the demand for high quality products, brands must distinguish themselves from the complex competitive environment by: 

• improving product quality, 
• creating a strong reputation,
• building brand awareness.

Chinese online retailers efforts to satisfy Chinese consumers demand for mom and baby products

Chinese online retailers are looking to satisfy Chinese consumers demand for mother and babies products, launching tailor-made commodities and cooperating with various overseas brands to cater to their diversified and personalized demands.

JD.com and a diaper brand cooperation

JD.com(京东Jīngdōng) is a Chinese e-commerce company headquartered in Beijing. It is the second B2C online retailer in China after Alibaba’s Tmall. It is partly owned by Tencent, which has a 20% stake in the company.

JD is banking on the consumer-to-manufacturer or C2M sector to expand its presence in the maternal and baby products market.

By partnering with a diaper brand, JD, using online research and comment data analysis, has found that users often search for specific keywords like “diaper rash” and look for diapers that won’t damage baby’s skin.

Based on big data and consumer preferences, JD and the diaper brand subsequently developed a new diaper product for sensitive baby’s skin.

Currently, JD has become one of the largest retailers for many world-famous brands such as Wyeth, Kao, Unicharm, Frisco, Nestle, Danone and Pigeon.

Online retailers specialized in imported mother and baby products

MIA.com and its brand Mompick

Mia is an online retailer specializing in items for mothers and baby. Founded in 2011, Mia.com is committed to helping middle and high-income families access the best products for mothers and babies, such as diapers, infant formula, toys, and baby clothes from abroad.

Mia is ramping up efforts to build up the supply chain of maternal and baby commodities and establish its self-owned brand Mompick.

Statistics from Mia showed: 

• its users from first-and second-tier cities are more willing to spend on comfortable underwear, snacks and intelligent home appliances, 
• its users living in third-to fifth-tier cities tend to buy women's apparel, latex pillows, juice extractors and other homegrown products.

BABYE TREE

Babytree is China’s largest online parenting site. In 2018 Babytree reached a strategic cooperation agreement with Alibaba on e-commerce to further improve its consumer services for Chinese families. 

Babytree has announced strategic cooperation with Japanese TV station Tokyo MX to form a joint venture in Japan, sourcing quality Japanese consumer goods for mothers and their families in China.

Babytree will jointly develop professional and interesting intellectual property such as content with Tokyo MX, combining the concepts, use and functions of high-quality products with the current visual pan-entertainment content that is most popular with young Chinese families.

Here is a guide on how to promote and sell mother and babies products in the Chinese market:

• https://www.marketingtochina.com/business-guide-for-mother-baby-products-in-china/

The Chinese jewelry industry has experienced high demand recently

According to Retail News Asia, the Chinese jewelry industry is in the midst of a major recovery in the second quarter of 2020. Manufacturers have experienced higher volumes of demand especially for new types of materials such as platinum.

Platinum and other gems are the new Oro in China

Platinum jewelry manufacturers reported higher demand volumes from April to May following a significant level of purchases of platinum supplies. Despite the Covid-19 crisis, in May, platinum manufacturing volume had returned to a level on par with the same period last year.

After the reopening, retailers saw a gradual increase in business volume with some platinum jewelry sales reaching around 80% more than the same period last year.

The record low platinum price made platinum an attractive substitute for gold, offering better profit margins and better curves.

In the jewelry industry in China, gold products have always been the most popular category and accounted for more than half of the industry’s revenue, followed by diamonds, jade and silver.

However, in recent years, gold jewelry has faced stiff competition from gems or other jewelry products in top tier cities.

Platinum and heat-treated alloys allow refined contours in the designs, better polishing, better shape retention and greater scratch resistance.

These innovations are expected to allow platinum to gain a more competitive market position in the jewelry space.

Chow Tai Fook and other players are meeting the demand

To meet the demand of the Chinese market, many companies including Chow Tai Fook, an Hong Kong based company, have incorporated new materials, including glazes, which add color and novelty, to their collections (Frozen II by Chow Tai Fook).

Other players have started to enter or re-enter the jewelry industry, leading to a growing interest in the manufacture of platinum and other gems.

New players in the gem industry and gold retail have started to transport platinum. For example, Shining House, which is a newcomer to platinum gemstone jewelry, now transports platinum to 100 of its more than 300 stores in central and eastern China.

The growth of the middle and upper classes, and urbanization, remain strong and are also expected to improve jewelry market conditions in the next few years.

To stay in step with the times, however, companies must absolutely keep up to date on changes in the Chinese market.

Jewelry market in China: An increasingly digitalized market

Given the digitization of this market in recent years, being present on Chinese digital channels is an excellent step to be successful in this growing market.

The rapid increase in e-commerce in China has forced traditional retailers to focus on the unique qualities of shopping, leading to the development of integrated multi-channel sales strategies, in which online stores and platforms complement each other.

However, both for big and small companies, with or without a presence in the Chinese market, what is necessary in China is BRANDING. Before to open an online store on this platform, brands should focus on branding and e-reputation as it is essential in China to sell products.

For more China’s jewelry market insights: 

• https://www.marketingtochina.com/jewelry-in-china-a-market-full-of-new-interesting-trends-for-brands/

New regulations in July for China’s eCommerce Livestreaming sector

The success of e-commerce live streaming in China

In the last years, e-commerce live streaming, a combination of streaming video and e-commerce, have become increasingly popular in China.

During Covid-19, live streaming proved to be a valuable tool for brands and retailers, who used platforms to engage consumers and showcase their products.

New rules and standards occur in the e-commerce live streaming sector

Since the success of e-commerce live streaming in China, a supervision occurred because of fake data, exaggerate promotions, unqualified products and others. China has no laws regarding e-commerce livestreaming, that’s why in June the China General Chamber of Commerce issued a notice on the development of national standards for e-commerce livestreaming, which are expected to be adopted in July.

An industrial forum was recently held in Hangzhou, where the provincial Internet Business Association published a draft of the comment standards for live e-commerce, marking the first time that these rules were developed in the country.

On June 8, 2020, Professional Committee of Media Shopping, China General Chamber of Commerce released two drafts of Group Standards:

1. Basic standards of video live shopping operation and service (definitions, product quality, promotion, practitioner qualification, etc.)
2. Guidelines for the evaluation of service system of online shopping integrity (the rights and obligations of the enterprises, live streamers and livestreaming platforms)

In addition, a six-month campaign, led by the Cyberspace Administration of China, is already doing its job with regards to the goal of sanctioning:

• Pornography,
• Illegal content,
• Counterfeit goods.

Authorities have already reported that 44 small platforms have received penalties ranging from fines to closings. While, nearly 2,000 sellers in Beijing received warnings and were ordered to pay taxes on their inflated sales figures.

In the meantime, companies must comply with general regulations such as the advertising law, the fleeting nature of the transmissions allowed the sellers to play quickly and without rules, such as those which prohibit the use of hyperbolic advertising.

For example, phrases like the following are considered illegal:

• The lowest price in the whole network (全网最低价),
• National level (国家级),
• Superlatives (最高级),
• Best (最佳).

As a result, it may be time for additional updates to the laws and regulations to specifically address e-commerce livestreaming.

New standards will lead to a better consumer experience

A report on consumer satisfaction on live streaming e-commerce released by the China Consumer Association on March 31, 2020, showed that 37.3% of consumers surveyed had encountered problems in live streaming e-commerce. 

The main concerns:

• Product quality is not guaranteed 
• Poor after-sales service

Therefore, this new standards and regulations will have a positive impact on live streaming e-commerce, because these rules can increase the perception of safety and quality by consumers, and therefore lead to better sales for companies.

If you want to know more about e-commerce live streaming read the article below:

https://www.marketingtochina.com/live-stream-in-chinese-e-commerce-retail-the-new-way-to-market-your-product/