Ichitan, Oishi pursue different strategies in Bt15-bn tea market

While Ichitan has invested heavily in extremely aggressive promotions, such as giving away luxury vehicles and condominiums, to gain market share, Oishi Group is to focus on strengthening its brand and long-term sustainable growth.
Ichitan Group yesterday gave away the first Bt10-million prize in its summer campaign. A luxurious condo in The River by Raimond Land project, fully furnished and ready to move into, was bestowed into the first lucky winner’s hands.
The campaign still has 29 other big prizes including a luxurious 80.94-square-metre duplex condo in the heart of Bangkok’s Thonglor area, worth Bt15 million, and 28 Mercedes-Benz GLA 200 Urban luxury vehicles valued at Bt2.09 million each.
Tan Passakornnatee, president and chief executive of Ichitan Group, said the company had selected only 30 deluxe rewards that people of any class dream of, worth Bt83 million in total.
“We selected condominiums in prime locations in Bangkok as prizes because condos are valuable assets whose value increases all the time, particularly those in good locations. Many new-generation and middle-income people want to own condominiums as one of the priority assets in life.
“We also decided to give away Mercedes-Benz in our campaign because it is a luxury vehicle brand that is known and desired by people at every level.”
Meanwhile, Jesdakorn Ghosh, vice president for beverage business at Oishi Group, said the company’s board decided not to invest heavily in hard-sell promotions, but to build brand loyalty and promote sustainable growth for the long term. This is in line with the company’s vision to triple revenue from its beverage business and to increase its net profit by 12 per cent by 2020.
“The policy has proved successful, with a significant increase of Oishi’s share in the local ready-to-drink tea market from 37.5 per cent in 2014 to 40.5 per cent last year,” she said.
“It left its closest competitor, which achieved a market share of 38 per cent, rather far behind, thanks to the company’s strength in all distribution channels: convenience stores, supermarkets, hypermarkets, and traditional retail shops.”
Oishi’s beverage business last year posted sales revenue of Bt6.3 billion, up 9 per cent from 2014. This was amid a slowdown in Thailand’s ready-to-drink tea market, which shrank by 2.5 per cent last year.
Net profit achieved by Oishi’s beverage business was Bt641 million, a 43-per-cent increase compared with 2014. That was a result of efficient production management, sales planning and marketing campaigns. Growth in international markets also leaped by 47 per cent last year.
Jesdakorn said the beverage group expected to achieve 11-per-cent growth in sales this year through five key missions.
They are to penetrate the market consistently and strengthen its market leadership by launching integrated marketing campaigns; to expand the target groups by offering product innovations to cater to younger people and health-conscious consumers; to increase consumer access via online channels; to adjust the product portfolio; and to facilitate growth in foreign markets, particularly the Asean region.
The company’s beverage arm posted strong growth of 47 per cent in exports last year, mainly to neighbouring markets such as Laos and Cambodia, as well as in other territories, such as the Middle East and Europe.