Binomial Innovates -
Binomial is an innovation consulting firm helping clients be disruption-ready
November 29, 2022
Pasta has long been viewed as one of the staple foods in western countries for centuries. In China, consumers had perceived it to be a higher-end product from overseas until instant pasta came onto the scene. Riding the emerging waves of live commerce and faster-paced lifestyles, Airmeter, the pioneer of selling instant pasta in China, became a remarkable hit as they won consumers’ hearts.
At first glance, one questions whether it even makes sense to sell pasta in a market where instant food choices are of abundance. With traditional Italian brands like Barilla that have been in the market for decades, how can Airmeter even compete with them? Yet sales figures show Airmeter succeeded in doing so.
“According to Euromonitor International Co. Ltd, Airmeter is the No. 1 brand of pasta in mainland China, measured in terms of retail sales value in 2021.”
“In May 2022, total monthly sales for Airmeter instant pasta from all sales channels including Tmall, TikTok, etc, are estimated to be more than ¥100 million.”
Founded in 2019, Airmeter sought to provide simple, quality ‘western’ meals at home by standardising the cooking process and packaging ingredients together for consumers to DIY at home. How did their approach enable them to stand out in the saturated and competitive market?
First, let’s understand the instant noodles market.
#1 How do instant noodles figure in the market?
Instant noodles have been popular in China since the 1970s, and is a common dish in every household. Demand for instant noodles surged during the COVID pandemic when people chose not to eat out. In 2020, retail sales amounted to US$15.1 billion, increasing 22% from US$12.4 billion in 2016.
Dominant players like MasterKong, Uni-president, and Baixiang, have built strong brand loyalty as traditional Chinese instant noodles producers selling at affordable prices for many years. However, there is an opportunity for brands to break traditions and innovate products that can be sold at a premium.
With the increase in spending power, Chinese consumers are not only spending on basic necessities, they are also looking for products that are better for their health and the planet. Brands can tap on this opportunity and break free from competing in price wars. This is the starting point of Airmeter - by offering pasta which is healthier, given the spaghetti does not need to be precooked and fried before packaging.
#2 Does it even make sense to try to sell pasta to Chinese consumers?
Despite the fact that China has always been regarded as a country where most of the population eat rice as a staple in their diet, noodles also play an important role in their cuisine. In fact, China is the country that has been credited with the invention of pasta. Allegedly, Marco Polo, the merchant from Venice, brought noodles back to Italy after his travel to China in the 13th century. Pasta has then been recreated by adapting recipes and adding more wheat into the flour. This is why pasta can easily be accepted by mainstream consumers in China, even if it comes from the West.
Revenue in the pasta segment amounts to US$23.1 billion in 2022. The market is also expected to grow annually by 8.70% (CAGR 2022-2027). It is therefore a sizable market for Airmeter to enter.
Competition in the traditional instant noodles market is very fierce. It is easy to replicate flavours, so innovation becomes the driving factor that helps brands stand out. Nissin is the first brand to instant-ise noodles. What happens if we apply the same logic to pasta?
That’s how Airmeter created its single product - instant pasta, and brought it to China to cater to the growing demand for instant food by this generation.
#3 How did Airmeter succeed in fighting off other brands?
1. Identifying the right target audience
It is hard to enter a market that fights on prices and targets the mass consumers. Hence, Airmeter chose to enter with high-end instant noodles that focus on quality. They also took extra effort to identify a specific group of consumers as the general public might not be receptive towards a western-style fast food.
Although pasta is not part of the traditional Chinese culture, Airmeter believes that as consumers become more educated, there are greater opportunities for cross-cultural exchanges to take place which can help change consumers’ perception of Western products. Therefore, adults aged around 35 in the middle-class income group in East and South China became the target customers for offline purchases as they have stronger purchasing power.
2. Innovating high-quality products
For a brand to have enduring appeal, its core value must come from the product. This is the philosophy of Airmeter, and they make sure to prioritise product quality.
To maintain the freshness of their sauces even after high-temperature sterilisation, Airmeter optimised their supply chain via strategic partnerships with suppliers of multinational chain restaurants like KFC and PizzaHut. They also promised the customers no preservatives and artificial colours added, and claimed that all the plants are certificated under HACCP, ISO9001 and other safety standards.
Airmeter’s other unique selling point is designing innovative cuisine with Michelin 3-Star chefs who combined Italian and Chinese tastes to allow customers to “cook star-level pasta at home within 15 minutes.”
3. Embracing digital sales & establish partnerships with growing channels
Although consumer packaged goods are typically sold in traditional brick and mortar, more consumers are switching to online purchases. According to the 2021 Instant Food Industry Insight Report, the growth rate of online orders has exceeded 70% in the past year. Apart from the mainstream shopping platforms like Tmall and JD.com, Airmeter also sells instant pasta on TikTok and mini programs on WeChat.
To survive, brands are seeking change by shifting online and optimising their user experience. To build an online customer base, brands need to enhance their brand awareness and reputation through offline channels.
Here are two specific case examples of how Airmeter succeeds in their online sales channels.
-> Case 1 Tapping on the livestreaming culture to build awareness and boost sales
Live commerce has evolved rapidly in China, and is an effective way to raise brand awareness and boost sales. One of China’s top influencers, Li Jiaqi is known for being extremely selective of the brands he promotes, with only 5% of the brands that sought partnership being selected.
Despite being a new brand, Airmeter stood out amongst many other brands and its instant pasta was featured in Li Jiaqi’s livestream for the 2020 11.11 Shopping Festival, which generated stellar results. 70,000 boxes were sold out within a minute and Airmeter was even invited to be featured for a second round afterwards.
-> Case 2: Community-based selling with Greentown Service
Greentown Service is a high-end residential property management services provider that owns a large number of properties and communities. It has exclusive rights to advertising on office buildings, and has high-quality owners and community residents. As part of their effort to target this group of residents, Airmeter tapped on community group chats, mini programs on WeChat, pop-up stores in the community, etc., and bridged the gaps between consumers and brands via scene marketing where product features and functions are showcased under different scenarios, resulting in higher conversion rates.
What can Singapore brands learn from Airmeter?
While the success of Airmeter is hard to replicate, the following points can increase your possibility of success when entering a market:
1. Emphasise quality as the core value
2. Identify your right target customers
3. Think beyond the traditional distribution channels
Binomial is an innovative consulting firm. We combine practical growth strategies, design thinking, and agile execution for your company to be disruption-ready and stay ahead of the curve.
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