Companies Target China’s White Collar Workers With “High-End” Instant Noodles

Taiwanese Companies Set To Introduce Higher-Priced Instant Noodles To Mainland

Will "high-end" instant noodles catch on in mainland China?

Will "high-end" instant noodles catch on in mainland China?

Instant noodles aren’t the first thing that pop into most people’s minds when they think about luxury products, but if a handful of Taiwanese companies have their way China’s well-heeled white collar workers could soon be enjoying upmarket ramen on their lunch breaks. This week, Taiwan’s China Economic News Service reports that Taiwanese noodle makers like Uni-President, Master Kong and Want Want hope to attract consumers with a taste for higher-quality materials by exploiting a niche not yet explored in mainland China — high-end convenience food.

From CENS:

Not surprisingly China is the world`s biggest instant noodle market, where quite a few of 1.3 billion people eat it daily, including white-collar office workers, blue-collar laborers regardless of income bracket. Market observers predict that the market value in China may double to US$13 billion by 2012 from the US$6.6 billion in 2008.

As expected, rising affluence in China is giving consumers a rare luxury of more leisure time to ponder issues as improving lifestyle for better health, sometimes known as LOHAS, hence the three Taiwanese instant noodle makers focus on upmarket products that are more nutritious and lower in undesirable fats.

C.H. Lo, president of Uni-President, also echoes the sentiment of the other noodle makers, believing rising living standards in China brings along demand for higher priced products. Unlike the harsher days of yore when being filled with food was sufficient, the more affluent consumers in China now are more health-conscious eaters.

Uni-President is adopting the same product strategy, targeting upmarket consumers. Lo says the price of a packet of budget instant noodle is on average US$0.144-0.22, with mid- and high-end ones being US$0.22-0.36.

As with most upscale products, profit margin rises with retail price. The gross profit on budget instant noodle is generally less than 15%, but over 30% on high-end ones, which adds impetus to instant noodle producers in China to go upmarket, Lo says.

The growing high-end instant noodle market in China will push up prices of such products in the near future. So, the time is ripe for Taiwanese noodle makers to tap this segment, Lo believes.

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