All of Mars’ brands in China, including Dove, Snickers, M&M's and Wrigley Extra (together worth over $1bn), will be available on all Alibaba’s platforms – Tmall.com and Taobao.
Mintel’s director of research Asia Pacific, Matthew Crabbe, previously told ConfectioneryNews Alibaba’s Tmall had an estimated 62% share of the business-to-customer online retail market by the end of 2015.
Advantages of partnering with Alibaba
Mars said in a statement that Alibaba's network will help expand its efficiency and reach.
Mars is the number one chocolate confectionery brand in China with 44.4% of market share, according to Mintel, while Mondelēz holds 1.6% of the market.
Alibaba will also cooperate with Mars Global Food Safety Center to “enhance food safety management, promote consumer education and share the latest scientific research findings with industry stakeholders”.
Consumer insight firm, Profitero, said Tmall is the dominant e-commerce platform in China. Increasingl, western confectionery brands are establishing their own stores on the platform, which gives them additional control over how products are presented.
Profitero’s strategy and insights analyst, Yan Deng, said major western confectionery brands, such as Hershey and Cadbury, are no longer new to Chinese consumers. She suggests brands should be more innovative with flavors.
“For example, Nestle introduced green tea-flavored KitKats in 2014 (first launched in Japan), which were really popular among Chinese confectionery lovers,” Deng said.
Mobile is the key
Mars hopes to attract China’s younger generation via the online shopping platform.
"China's younger generation is the new driving force of consumption. They rely on e-commerce, and place great value on the trustworthiness of the companies behind their brands and products,” the company said.
However, Consumers feel it’s difficult to view the images and information of products on their mobile phones, according to a customer experience study by UPS.
“Mobile devices are the primary connection point for many people, so optimizing content for smaller screens is essential,” VP of Insight at Profitero, Keith Anderson, told ConfectioneryNews. “Brands should focus on producing shorter product titles and descriptions and fast-loading images with clearly visible features and benefits.”
Mondelēz also said mobile reach is overtaking PC and laptop-use, and will surpass all other media both in terms of penetration and time spent in China.
In order to compete with Mars’ on Chinese mobile platforms, Mondelēz’s spokesperson, Valerie Moens, said 65% of the company’s total digital budget will go to mobile this year.
“We’re working with the top Chinese apps in each category such as, social app, Wechat and Weibo; photo app, Meituxiuxiu; weather app, Moji; and movie booking app, Weipiao and Gewala,” she said.
Renewing partnership with Facebook
But Mondelēz said its focus this year is on consumer insights and messaging through a renewed partnership with Facebook.
“On the consumer insights front, it’s about leveraging Facebook’s Audience Insights API to deliver better creative and mobile experiences,” Moens said.
“On the messaging side of things, we believe that messaging will have an even greater impact on how brands engage with consumers than social media has,” she added. “This could potentially be a new channel for us for consumer support, such as handling product inquiries, complaints, etc., and potentially commerce.”
Mondelēz declined to share the brands that will participate in the messaging or insights partnership with Facebook.
The company has been partnering with Facebook for a few years, but the company renewed its partnership as “a media investment,” according to Moens.
“Part of our strategy to shift more of our spending to digital, as it is typically lower cost than traditional media but gets higher returns," she said.
Mondelēz expects digital media to represent around 30% of its total media spend by 2018. Specifically, in North America, the goal is reach over 50% by the end of 2016.