Malaysian food trading company remains bullish on Chinese market

Food is one way to people’s hearts. And it also serves as a cultural bridge. As Malaysia’s Prime Minister begins his official visit to China, our reporter Wei Lynn Tang checks-in with one Malaysian food manufacturer and trading company. They talk about the company’s journey into the Chinese market over a decade ago, as well as the opportunities and challenges that lie ahead.

White coffee, chilli sauce, pre-made curry paste, these are just some of the Malaysian food products on shelves in China. This Malaysian food manufacturer and trading company has achieved an average revenue growth of 15 to 20 percent per year in the past fifteen years. It attributes much of this to China’s opening-up efforts, including joining the World Trade Organization in 2001.

LOH WEE KENG MANAGING DIRECTOR, REGAL PLUS (BEIJING) “Since ASEAN+3, import duties reduced or come to zero, a lot of Malaysian products come to China and become very competitive. Demand for Malaysian products are fantastic after free trade agreement, so our products like white coffee, biscuits, we experienced tremendous growth after the period.”

This burgeoning market demand has prompted Loh to set-up his own brand of food products, apart from also distributing that of other Malaysian brands.

WEI LYNN TANG BEIJING “Now I may not be the biggest fan of durian or durian-based products, but this Malaysian ‘King of Fruits’ has found its way into the stomachs of millions of Chinese. It’s a billion dollar market here, and this is enticing food vendors to make the most out of this tropical fruit.”

From coffee to ice cream. The sales from durian and its related products account for half of this company’s revenue. That said, competition remains rife in the FMCG sector, not just among established multi-nationals, but also with cost-effective local players. The biggest challenge, according to Loh, is the fast-changing consumer behavior and marketing tools.

LOH WEE KENG MANAGING DIRECTOR, REGAL PLUS (BEIJING) “The younger groups they purchase through hand phone, we have to have our own company apps to buy through phone. With this latest WeChat shop, no choice. In fact, the A&P spending for all these upgrading is quite a lot, even though the market is very good, but we have to spend a lot of money to follow the market trend.”

The company remains bullish in China as it deems the country a very viable market still.

LOH WEE KENG MANAGING DIRECTOR, REGAL PLUS (BEIJING) “3rd and 4th tier cities the buying power upgrading now, before that they can only buy the local products which is cost-concern, but now lifestyle has upgraded, they want imported products, food safety, good taste, so all these especially China they have one or two child policy, so they want to feed their children the best.”

SUPERMARKET CUSTOMER “We feel more comforted with imported products. As for goods from Southeast Asia, we usually buy fruits from the tropical region. My mom loves durian.”

Despite broader trade tensions and increased labor costs in China, Loh says he plans to one day set-up a manufacturing facility here. This is because being in the fast-moving consumer goods space, the ability to reach the market at a rapid pace is key. WLT, CGTN, Beijing.