Coke’s China Formula: A Pulpy and a Smile 可口可乐入乡随俗显成效

By newsdoug on August 19, 2011

Coca Cola (NYSE: KO) has made global headlines with its announcement that it will invest $4 billion in China over the next 3 years, as it soaks up more business in the nation’s smaller cites with its popular and affordable drinks. (company announcement) The figure certainly accomplished its mission as an attention grabber, and it’s easy to see why. While sales in most major global markets sputter as the Coke soaks up China dollars with locally-made Pulpy world economy struggles out of recession, Coke notched 21 percent growth in China in the first half of the year with unit sales surpassing 1 billion — equal to its annual sales for the market just 5 years ago. Clearly there’s plenty of room for growth, as Coke, despite its position as China’s largest software seller, still only has a relatively modest 17 percent of the market. What’s most interesting to me in this story is the fact that earlier this year Coke scored an unusual first in China with Minute Maid Pulpy, which claimed the honor of becoming the company’s first billion-dollar drink developed outside the US. (company announcement) I’ll admit to being a fan of Pulpy myself, frequently consuming this drink that at least superficially seems a bit healthier than Coke and no doubt is attractive to consumers in the country that gave the world mandarin oranges. Coke is clearly moving in step with other major consumer brands like fast food operators KFC (NYSE: YUM) and McDonalds (NYSE: MCD), which have developed a strong stable of products suited to local tastes, often providing stronger platforms for growth than their traditional offerings created in Western markets. Its latest mega investment testifies to Coke’s realization that such innovations are key to keeping its growth alive, and I wouldn’t be surprised to see it maintain the 20-plus percent growth rates in China into at least the next 2-3 years.

Bottom line: Coke’s $4 billion commitment to China underscores the huge success it has had in the market, and the enormous potential remaining for future growth.

可口可乐(KO.N)宣布未来三年将在中国增加投资40亿美元，因其在中小城市业务迅速扩张。这则消息使得可口可乐成为媒体焦点，它这麽做其实也很容易理解。全球经济迟滞之际，可口可乐在全球多数主要市场的销售业绩欠佳，但今年上半年在中国的销售则增长了21%，销量超过了10亿瓶，五年前这是在中国市场的全年销量。显然，可口可乐在中国还有很大的发展空间，虽然是在中国的软饮销售冠军，但市占率也才17%。而我最关注的是，可口可乐在中国推出的品牌“美汁源”，跻身其销售额过10亿美元的品牌行列，是可口可乐在美国以外地区开发的品牌首次销售达到10亿美元级别。我本人也常常喜欢喝“美汁源”，至少从表面上看，这比可乐要健康一些吧，这也无疑受到了中国消费者的欢迎。象肯德基(YUM.N)和麦当劳(MCD.N)这些全球知名品牌那样，可口可乐也试图迎合当地消费者口味、开发独特产品，开辟成长机遇，而非单调沿用在西方市场创立的产品系列。可口可乐此次在中国的大手笔投资，表明它已经意识到，创新是保持成长的关键。未来两三年，若可口可乐在中国能保持20%以上的增长率，我不会感到奇怪。

一句话：可口可乐在中国大手笔40亿美元投资计划，印证其在中国市场的成功，并预示其未来发展潜力。

Enjoy this blog? Please spread the word :)