作者：foodinc

On 21 May, a day full of sweetness and love, chocolate giant Ferrero and e-commerce giant Alibaba joined hands to celebrate the special day.

Ferrero China and Alibaba Tmall Tasty signed the FY21/22 Joint Business Partnership. Food Inc learnt that the two parties would carry out in-depth cooperation in three main aspects: riding on the youth consumption trend, deep diving into parent-child consumption scenes and cementing leadership in premium gifting. It is the latest movements of Ferrero to accelerate digital transformation and deep dive into diversified digital consumption scenes.

It is noteworthy that the two parties will try several new and interesting approaches under the cooperation.

For example, Ferrero announced that it would establish a brand-new flagship store named "Ferrero Young!" on the Tmall platform, targeting young consumers. Ferrero also participated in the new segment called "喵心礼 (Miao Xin Li)" launched in April by Tmall, and overweighted on the festival and gifting market.

"Digital transformation is one of the strategic priorities of Ferrero's development in China. Deep diving into diversified digital consumption scenes with Tmall will effectively help Ferrero formulate a more targeted and differentiated strategy aiming at consumers through cyberspace," said Mauro De Felip, General Manager of Ferrero China, noting that the company is expected to maintain strong double-digit growth in its e-commerce business next year.

Open A new store for the young generation

To capture the youth power, Ferrero plans to establish a brand-new flagship store named "Ferrero Young!" on the Tmall platform especially for the young generation. It is expected to officially open in August this year.

So, how will the new store be operated?

In terms of selection strategy, Ferrero China said that the focus of "Ferrero Young!" will be different than that of Ferrero's current Tmall flagship store. Ferrero's brands Raffaello and Kinder Bueno will become the first batch of brands to appear in the "Ferrero Young!" store. Rocher, Ferrero's most well-known brand in China will also appear in the new store with "innovative products" aimed at young people.

Rocher is heavily connected to festivals and gifts, such as Chinese New Year gifting. While Raffaello is more connected with romance, Ferrero China explained to Food Inc.

According to Ferrero's latest consumer insights. Ferrero said that it has interviewed many young Chinese consumers, and found that the post-90s generation would like to give gifts and express their love not only on Valentine's Day – they want to show their love every single day. To reflect this shift in consumer preferences, the marketing strategy of Raffaello has changed accordingly – the new slogan is "love every moment".

"Therefore, the brand Raffaello's concept could better cater to young people," the Company said, adding that Raffaello's appearance in the "Ferrero Young!" flagship store is expected to significantly increase sales.

Kinder Bueno is another key brand in "Ferrero Young!"

Kinder, a snack brand targeting young consumers, has been in the China market for over 10 years. Ferrero explained to Food Inc that "despite the impact of Covid-19 on many companies, Kinder Bueno realized that its sales growth bucked the trend, which surprised us. This year, we increased the brand promotion, and the sales volume doubled compared with the same period last year."

Ferrero revealed that Kinder will launch lots of new products in "Ferrero Young!"

"For example, in the following months, we will launch a smaller package - Kinder Bueno Mini, which is more suitable for individual consumers. At present, individual consumption accounts for 40% of our business," said Ferrero, adding that Kinder will introduce a series of biscuits and chocolates targeting the young generation in the next one or two years.

Cementing leadership in premium gifting

Ferrero's strengths in the Chinese market have always lain in the premium gifting scenes. Ferrero Rocher, and Kjeldsens which was acquired in 2019, are Ferrero's core products in the specialized area of premium gifting.

Food Inc noted that Ferrero has new moves in online channels that focus on these important business units. The company joined hands with Tmall to have its products appear in Tmall's new segment called "喵心礼 (Miao Xin Li)", inaugurated in April this year.

It is not common practice for e-commerce platforms to create a separate page dedicated for gifting. Peng Yue, Marketing Director of Tmall Food & Head of Snacking Food Business, explained to Food Inc that Tmall saw the huge opportunities in the gifting market. Last year, there were about 50 million consumers searching for gift packs on Tmall.

He said data shows that about 40% of consumers purchase gifts during festive occasions, such as Spring Festival, Mid-Autumn Festival, Dragon Boat Festival, Valentine's Day and Christmas. In addition, nearly 30% of consumers buy gifts during a series of important moments in their lives, including weddings and various anniversaries.

"For these reasons, Tmall launched a new segment called "喵心礼 (Miao Xin Li)", focusing on three aspects," Peng Yue noted. "Firstly, reshape and upgrade the service experience of purchasing and receiving gifts. Secondly, employ staff specifically to select products, and weight for the search of featured goods. Thirdly, launch large-scale marketing programs prior to important occasions to build up consumer interest in "buying gifts at Tmall".

When talking specifically about the cooperation with Ferrero, Peng Yue mentioned that there will be two "very big market opportunities".

"First, for major festivals, such as Valentine's Day, 520, Teacher's Day, we can work together to develop marketing plans with more focus on gifting, to strengthen Ferrero's brand image as the first choice for gifts," said Peng Yue. "Second,because of the pandemic, many young people have postponed their weddings to this year, so there will be more wedding occasions coming up. In conjunction with our targeted marketing and promotion plans, we believe this will drive Ferrero's growth in the sweet candy market."

In order to better drive growth both online and offline, the supplies for the two channels are now separated. For example, during the Spring Festival this year, Ferrero cooperated with Summer Palace to launch a CNY pack exclusively for Ferrero's flagship store on Tmall, the pack "sold out within an hour".

Since last year, Kjeldsens has also begun to launch some special packs for Tmall. "For example, we turned some typical Danish elements, such as mermaid, into a paper-cut and used it to decorate the special packs exclusively for Tmall. In the future, we will launch more Tmall-only premium gifting packs," Ferrero said.

Vast potential of children's snack food

In addition to young consumers and premium gifting and relying on Ferrero's children's snack food brands such as Kinder, its cooperation with Tmall this year is also focused on the growth opportunities in parent-child consumption scenes.

According to the 2020 Online Children Snack Industry Marketing Trend Insights released by Tmall Snack and Alimama, children's snacks have experienced explosive growth in recent years, making it a blue ocean market in the colossal snack industry. The "delicate mother" with strong consumption power and stickiness is the main driving force of children's snack food consumption.

"The purchase decisions for children's snack food are quite special," Mu Du, Chocolate Category Expert of Tmall Tasty explained to Food Inc. Consumption patterns of children aged 0 to 6's are mainly determined by their parents, while those of children aged 6 to 12's are more likely to come from their own choices.

"As more post-80s and post-90s generation have become parents, they will have more refined demands for quality and health, which will bring a new growth point for children's snack food,” Peng Yue said.

What is worth noting is that to cater to the high growth trend of this category, more category days have been launched with the theme of "children's snack food" on e-commerce platforms. Food Inc noticed that Tmall established a new "children's snack food section" for the first time last year, and Kinder has featured in Tmall's newly-launched children's snack food section as "Captain Brand".

Food Inc said that, according to Kinder, the brand "achieved triple-digit growth in e-commerce channels in the Chinese market" and "high growth on Tmall” last year. According to data from Tmall, the largest consumer group of Kinder is "delicate mothers", accounting for more than 50%; the second largest is "young white-collars", accounting for about 30%.

"However, in terms of business scale, our current business scale on Tmall is still small. According to Tmall's data, there are about 50 million "delicate mothers" in the Alibaba ecosystem. So, the next important challenge for Kinder is how to further explore this potentially huge market," Kinder said.