Fonterra achieves strong sales growth during China's 'Double 11' event

Sales of Anchor UHT milk were particularly strong and the brand was the leading imported UHT product across all online sales platforms during the sales window.

Double 11 is characterised by deep-discounting and wide-ranging promotions, generating a level of hype similar to a holiday festival in China. According to data from Syntun, China’s 16 largest e-commerce merchants achieved a combined RMB 254 billion (NZD $55.1 billion) in sales this year during the period, up 43 per cent on last year’s total.

President of Fonterra Greater China Christina Zhu said Fonterra’s strong growth on last year reflects the strategic partnerships that the Co-operative has been building with China’s e-commerce giants.

“Forming win-win relationships with the major platforms has been a point of focus for us over the past 12 months,” said Ms Zhu. “We’ve gotten closer to Alibaba and its Tmall platform, demonstrated by how we secured a feature spot on the platform’s homepage in the lead up to November 11. We’ve also developed a good relationship with JD.com, having been identified as one of the platform’s strategic growth partners in the dairy category.”

Fonterra’s Vice President of Brands in Greater China, Chester Cao, said that the Co-operative took a different approach to this year’s sales period, which was the fifth time Fonterra had taken part.

“We were pleased to offer a much broader portfolio of product to consumers this year,” said Mr Cao. “In addition to our strong-selling Anchor UHT and powder products, Anlene and Anmum, we were also able to push our new premium and organic Anchor range and our Anchor Dairy Foods range of cream, cheese and butter.

“For us, it’s much more than just a window to sell more product than usual,” said Mr Cao. “With high levels of online traffic, it’s a real chance for us to reach a greater number of consumers with our brand and educate them about the goodness of our dairy. Given this, we had a strong focus on investing in the right media channels by using a data-driven approach, and creating engaging content for a range of different online and social channels. This approach paid off, as we had more than 30 million consumers visiting our online stores.”

Fonterra has flagship stores for Anchor, Anmum, Anlene products and has partnerships with eight major e-commerce platforms, including front-runners Tmall and JD.com as well as other companies such as Suning and Yihaodian.

China’s e-commerce market is far-and-away the world’s largest and an estimated USD $800 billion is set to be spent this calendar year according to figures from McKinsey & Company. This matches the market size of the next six largest countries combined: the United States, United Kingdom, Japan, Germany, Korea, and France. Growth is set to continue, with a compound annual growth rate of 18 per cent expected between 2016 and 2018.

“We are excited by the future of e-commerce,” said Mr Cao. “While some categories like electronics or apparel are starting to show signs of maturity, the fresh and packaged food categories have very low online penetration rates by comparison, so there is a lot of room for growth and we’re positioning ourselves well to capture it.”