Oishi maintains its leading position in China through continuous innovation

HOMEGROWN thrives in China’s highly competitive snack market, maintaining its fourth-largest sales position through continuous innovation and commitment to meeting consumer needs.

From the beginning as Prime Minister gawgaw (corn starch) in 1966, and in 1974, Liwayway Marketing Corp. entered the snack food market under the Oishi name, eventually grabbing a piece of the snack cake with its popular Prawn Crackers and Kerei Yummy Flakes under the supervision of brothers Carlos and Manuel Chan.

Most people probably don’t know that Oishi and Bench have a close connection, as the clothing brand’s CEO Ben Chan is their brother. Their parents were originally from Jinjiang, Fujian Province, and immigrated to the Philippines at an early age.

Carlos Chan began to explore the potential of China, especially in Pudong, Shanghai, where he opened his first store in 1993. As one of the pioneers in the snack and chips industry in the Middle Kingdom, Oishi quickly rose to the top and dominated the field.

After Shanghai, Oishi quickly expanded to other areas in China, such as Nanhui, Harbin, Kunming, Jiangxi, Hubei, Xinjiang, Shandong, Qinhuangdao, Hengshui and GLG Tianjin.

Walter Angsanto, executive vice president of Oishi-Shanghai Plant, said their president, Carlos Tan, was a visionary, having immediately recognized the market potential in China during his first visits to the country in the 1980s.

“Some people are just visionaries, that’s one word to describe a CEO. Some people are just talented,” he told reporters visiting the company’s headquarters in Pudong on Aug. 20, 2024.

However, the snack industry in China was in its infancy when Oishi entered the scene. As one of the early adopters, the company also benefited from its early entry, finding an early resonance with Chinese consumers who sampled its products.

Angsangto also said that the company only uses fresh ingredients and healthy raw materials to make its products. For example, Oishi was one of the first companies to stop adding aspartame to its drinks. They also recently removed trans fats and food coloring from ingredients.

Oishi spares no resources for research and development to be able to offer products adapted to the local market.

Between 1996 and 2017, Oishi also established factories in Vietnam, Myanmar, Thailand, Indonesia, Cambodia, India and South Africa. More recently, the company has also gained a foothold in Thailand, Bangladesh and Uzbekistan.

Today, Oishi has fallen to fourth place in China’s snack industry. While that’s still an impressive feat, the company isn’t resting on its laurels.

Lei Di Ming, executive vice president, acknowledged that China is highly competitive, so they must be vigilant to fend off newcomers who want to overthrow them. That’s why they continue to invest in research and development to introduce new products that appeal to both old and new consumers.

He said that when they started in Pudong, Shanghai was still a backward area. There were no high-rise buildings, factories or shopping malls. The company set up food stalls on Nanjing Road to sell its products.

Stretching five kilometers, Nanjing Road is Shanghai’s shopping district and the longest in the world. It attracts about a million visitors daily.

“All the big international companies want to enter the Chinese market, so the competition is fierce. So we try our best to maintain the highest level. So we create a lot of new products,” he said.

For example, Aldrich Calag, CFO of Oishi-China, revealed that it will launch 20 new drinks and chips in the next few months.

The company currently has about 120 snacks and drinks throughout China. In the meantime, they are constantly evaluating current products on the market to assess their sales performance before deciding to discontinue them.

“In that sense, we can still maintain our production capacity,” he said, adding that they have discontinued about 30 products over the years. However, he insisted that their factories still have the capacity to increase production if needed.

To further promote the brand, the company partnered with designers to incorporate the Oishi logo into its clothing brands.

Calag added that the situation has become even more difficult post-pandemic as consumer habits have changed, disrupting the standard way of doing business.

“There have been a lot of changes in the retail market in China since the pandemic. For example, in the Philippines, they use Grab Food and Food Panda. But they were ordering food from restaurants, not snacks,” he said.

“But here in China, there is a minimum order quantity that can be placed in a supermarket, home delivery is within 30 minutes, and online shopping is cheaper than in-store shopping, which disrupts the demographic structure of retail channels,” he added.

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