Recent market analysis reveals that Lotte, a leading player in the biscuits sector, is enhancing its focus on new and premium product markets to spur growth in Asia. This strategic pivot is driven by the growing saturation of the baked goods market, requiring innovation and diversification to sustain a competitive edge.
Market Trends
Lotte, known for its popular baked biscuit snacks like Koala’s March and Pepero, is re-evaluating its market strategy to encompass a broader range of product categories beyond biscuits. The company’s established presence in South Korea, Japan, and Thailand has seen considerable success over the years. However, to sustain and accelerate growth, Lotte is now targeting markets where it has yet to establish a significant presence, such as India.
According to Paul Yi, CEO of Lotte Wellfood, India has been identified as a key target due to its large population, improving productivity, and increasing consumption. The attractiveness of the Indian food industry is bolstered by the country's economic growth and changing global dynamics. India’s strengthening political and economic position, alongside its entry into the global top five in nominal GDP and market capitalization, presents substantial opportunities for Lotte’s premium brands like Choco Pie and Havmor ice cream.
Lotte’s strategic pivot is not limited to India. In Thailand, despite the success of Koala’s March, the company recognizes the need to diversify due to the highly competitive and saturated biscuit market. Thai Lotte Marketing Division Manager Mao Ogino highlighted the necessity to explore new business pillars, considering the maturity of many of Lotte’s legacy biscuit brands. The firm is also aware of the need to update its brand portfolio to remain fresh and relevant.
Strategic Action
Diversify Product Portfolio and Target New Markets
Recognizing the saturation in the biscuits market, Lotte is strategically diversifying its product portfolio to include more non-biscuit items and premium offerings. This approach aims to tap into new consumer segments and markets, thereby driving growth and enhancing brand presence.
Market Research: Conduct in-depth market research to understand consumer preferences and identify potential gaps in non-biscuit product categories across target markets.
Product Development: Develop and introduce new product lines tailored to regional tastes and preferences. Focus on premium products such as Choco Pie and Havmor ice cream, which have significant growth potential in emerging markets like India.
Brand Positioning: Strengthen brand positioning by highlighting the premium nature and quality of the new products. Leverage marketing campaigns to build brand awareness and attract new consumer segments.
Distribution Expansion: Expand distribution networks to increase product availability in both established and new markets. Prioritize high-growth regions with a focus on premium retail channels.
Innovation and Adaptation: Continuously innovate existing products, such as the Koala’s March brand, to broaden appeal beyond traditional demographics. Adapt marketing strategies to target a wider range of consumers, including office workers, ageing consumers, and health-conscious individuals.
Lotte’s strategic focus on new and premium product markets is driven by the need to stay competitive in the increasingly saturated biscuits sector. By diversifying its product portfolio and targeting high-growth markets, Lotte aims to enhance its market share and drive sustainable growth. This approach not only addresses the challenges of market saturation but also capitalizes on emerging opportunities in the dynamic Asian food market.
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