Analysis on Market Status and Competition Pattern of Chili Sauce Industry in China in 2020; Laoganma’s sales scale is far ahead.

1. The production and sales of China sauce increased simultaneously.

Chili sauce is a kind of compound seasoning, and the so-called compound seasoning refers to different kinds of seasonings with different flavors, shapes and functions, which are mixed with vegetables and their products or animal meat, aquatic products, vegetable oil, spices and seasoning accessories.

In recent years, the output of Chili sauce in China has been increasing. According to the data in the Blue Book of Chili Sauce Products, the output of Chili sauce in China was about 5.76 million tons in 2019.

Statistics of Chili sauce production in China from 2010 to 2019

At present, Chili sauce has been widely used in daily life and food industry, and can be used to make various vegetables and meat foods. The consumption of Chili sauce in China is also increasing year by year. In 2019, the consumption of Chili sauce in China was about 5.28 million tons.

Statistics of Chili sauce consumption in China from 2010 to 2019

2. Laoganma’s sales scale is far ahead.

Speaking of the hot sauce industry, you will definitely think of a brand — — "Laoganma". Laoganma is a brand created by Ms. Tao Huabi, the founder of the company, from scratch. In 1996, Chairman Tao Huabi set up a factory in Longdongbao, Guiyang to produce flavored douchi products. After nearly 20 years’ development, Laoganma has become a popular pepper condiment brand among Chinese at home and abroad. Now Laoganma Company has three production plants in Guizhou Province, with a total area of 750 mu and nearly 5,000 employees.

According to the performance report released by Guizhou Nanming Laoganma Flavor Food Co., Ltd., the company’s sales revenue exceeded 5 billion yuan in 2019, a record high. The annual sales revenue was 5 billion yuan, up 14.43% year-on-year.

Statistics of sales revenue of Guizhou Nanming Laoganma Flavor Food Co., Ltd. from 2016 to 2019

From the perspective of revenue scale, Laoganma’s operating income in 2019 is far ahead of other enterprises. In 2019, the operating income of Haitian Weiye sauce products reached 2.3 billion yuan, and the annual sales of spicy girls was around 1 billion yuan.

Comparison of operating income of some Chili sauce production enterprises in China in 2019

3. Laoganma’s cost-effective advantage occupies a leading position in the market.

Throughout the whole hot sauce industry, Laoganma’s distribution rate, awareness and influence all occupy an absolute leading position, accounting for about 20% of the overall market of the industry. Other brands have obvious regional characteristics and are scattered all over the country. However, in recent years, the emergence of some recent hot sauce brands in the market has carved up part of Laoganma’s market share.

Fanye, a hot sauce brand founded by singer Lin Yilun, aims at young consumers and high-end markets, and has launched four flavors of Pleurotus eryngii hot sauce with truffle oil, which is priced around 30 yuan. "The first hot sauce in online celebrity" — — The "Tiger State Hot Sauce" brand was established in 2016, and it is mainly sold through take-away channels. Since its establishment, the operating income has increased at a compound annual growth rate of 300%, and the annual sales in 2019 exceeded 200 million yuan. However, Laoganma occupies the leading position in the market with its close pricing and high cost performance.

Analysis of Top Ten Brands of Chili Sauce in China

Judging from the product types of the top ten brands, Laoganma mainly uses Chili sauce, hot pot bottom materials and spicy dishes; Lee Kum Kee and Haitian have many kinds of products, including soy sauce, sauce, sauce, chicken essence and so on. Hubang, Jixiangju and other brands are similar to Laoganma, and they mainly produce Chili sauce. Judging from the richness of brand products, Haitian and Lee Kum Kee have many kinds of products, stronger influence and higher popularity among consumers.

Analysis of Ten Brand Products of Chili Sauce in China

The price of Laoganma products is 3-5 yuan per 100g, and the price of Huaqiao is similar to that of Laoganma, while the prices of brands such as Lee Kum Kee and Fansaoguang are higher than that of Laoganma. From the perspective of cost performance, apart from Laoganma, Huaqiao and Spicy Girl have higher cost performance, but the sales scale is quite different from Laoganma.

Price distribution of main brands of Chili sauce products in China

4, Haitian sales can compete with Laoganma

With chili sauce as the key word, according to the order of sales, in JD.COM, besides Laoganma’s flavored chili sauce made from fermented soybean oil and flavored chili sauce with chicken oil, the mushroom beef sauce with grassland fragrance and the spicy beef sauce with plums are ranked third and fourth.

Ranking of JD.COM Chili Sauce by Sales in 2020 (as of July 3, 2020)

In Tmall, the monthly sales of Haitian signature bibimbap sauce ranked first, with 40,000 pens; Laoganma flavor douchi bibimbap sauce ranked second in monthly sales, with 29,000 pens; Ranked 3-5 are Chubang garlic Chili sauce, Chuanwazi oil spicy sauce and Chuanwazi roasted pepper sauce.

Monthly sales ranking of Tmall Chili sauce in 2020 (as of July 3, 2020)

5. Did Laoganma cheat Tencent?

Tencent was cheated? On June 29th, a civil ruling issued by China Judgment Document Network showed that Tencent applied to freeze the property of Laoganma’s name of 16.24 million yuan, and then Tencent explained that Laoganma had placed an advertisement of 10 million yuan on Tencent’s side, but failed to pay according to the contract. Tencent’s repeated reminders failed, so it had to be prosecuted according to law. Later, Laoganma responded that the company had never signed the Joint Marketing Cooperation Agreement with Tencent or authorized others to sign the "Laoganma" brand with Tencent, and had never conducted any commercial cooperation with Tencent. Although the truth of this cooperation is unknown, it is the principle that Tao Huabi, the founder of Laoganma, insists on not advertising and not going public.

However, with the younger management, advertisements of Laoganma brand have begun to appear in the public’s field of vision.

In 2018, Laoganma sweater appeared in New York Fashion Week. Sweaters are priced as high as $120, but they are not for sale. They can only be obtained by purchasing designated products in Laoganma flagship store. This move has increased the turnover of Laoganma Tmall by more than 200%. In addition, the cooperation between Laoganma and men’s clothing and the online advertisement of "unscrewing the dopted mother" have made the popularity of Laoganma rise greatly.

Different from Laoganma, Haitian and Lee Kum Kee all choose traditional TV advertising channels, while brand advertisements such as Jixiangju, Fansaoguang and Hubang are mainly placed on the Internet. Judging from the strength and breadth of advertising, Haitian and Lee Kum Kee have an advantage by virtue of their strong financial strength.

Distribution of Advertising Channels of Major Chili Sauce Brands in China

On the whole, Laoganma is far ahead among the brands of Chili sauce, Haitian and Lee Kum Kee have strong comprehensive strength and high popularity, and they can also occupy a leading position in the brand competition of Chili sauce industry. Brands such as Fansaoguang and Hubang are well-known among young consumers by virtue of online publicity.

For more data sources and analysis, please refer to Forward-looking Industry Research Institute, which also provides industrial big data, industrial planning, industrial declaration, industrial park planning, industrial investment attraction and other solutions.