Nestle to Launch Digital Marketing Campaign with Alibaba
Alibaba Group Holding Ltd. together with Nestle SA will be launching a digital commerce and marketing campaign, a move that Nestle hopes will boost their disappointing business in China using innovation in the products and digital distribution channels. The six month joint campaign will leverage Alibaba’s mobile and online marketplaces, rural services and media platforms. Nestle stated that it will feature 154 products from 30 brands wherein 67 of the brands are to be introduced to Chinese consumers for the first time.
The company has been growing slowly in the past few years in China and the company has not reacted fast enough to trends such as e-commerce and healthier eating. Nestle Yinlu congee brand still faces challenges as consumers turn to more premium products. Chinese consumers are discerning and is now adapting to technology much faster that anywhere else in the world. According to Wan Ling Martello, Nestle executive vice president for Asia, Oceania and sub Saharan African regions that despite the slowdown of the economy and the fast moving consumer goods sector, China remains a great consumer due to its emerging middle class and a growing disposable income.
The driving force is innovation and technology by building new competency and dealing with new challenges in the digital contribution instead of the traditional brick and mortar stores. Researchers from Nestle said that more than 75 percent of consumers are using the internet t browse and buy. 80 percent of the shoppers are also giving online reviews with 50 percent of the purchase decisions are being made online. The company also created a stand alone unit a few years ago and was independent of the traditional business and has already expanded at a triple digit rate and has is on average more profitable than the brick and mortar stores operations.
China is still the largest e-commerce market and still reports a online penetration by the double digits growth. And as e-commerce become an established shopping channel in big cities in China, a vast potential is seen growing in smaller cities and rural areas.