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Orion Corp., South Korea's second-largest confectionery company, is stepping up
efforts to expand into China's traditional trade channels in a bid to boost its
sales in the world's No. 2 economy, officials said Friday.
The company
has recently focused on bolstering its footing in China's traditional markets,
including mom-and-pop stores, they said.
As of 2010, China had 3.2
million retail sellers, of which 2.1 million or 65 percent were traditional
trade channels. Traditional trace channels are estimated to account for 44
percent of the country's total retail sales.
Orion aims to increase
the proportion of traditional shops to some 30 percent by the end of
2012.
Compared to its foreign rivals in China, Orion has been less
exposed to the traditional trade channels. In 2011, Orion's sales in traditional
markets accounted for 22 percent of its total sales in China.
Meanwhile, U.S. gum and candy maker Wrigley Co. saw half of its China revenue
come from the traditional market, while confectioner Krafts Food Inc., also of
the U.S., makes 40 percent of its revenues in China from the traditional
market.
"As we seek to advance into smaller Chinese cities, we put an
emphasis on securing traditional trade channels," an Orion official
said.
Traditional trade usually generates higher margins, compared to
large distribution channels such as discount stores, the official
added.
The South Korean confectionery maker's market share increased
to 2.7 percent last year, ranking fourth among the top six foreign confectionery
companies operating in China.
It expects to see its China sales rise
some 40 percent to reach 1 trillion won (US$880 million) in 2012, driven by
rising income levels in the world's most populous country.