Financial results

Want Want Holdings set to be ‘one of the greatest brands in Chinese history’

By Douglas Yu contact

- Last updated on GMT

Pic: Want Want Holdings
Pic: Want Want Holdings
The chairman and CEO of Chinese rice crackers maker Want Want Holdings, Tsai Eng-Ming, has declared the company could become ‘one of the greatest brands in Chinese history’ following a 6.6% revenue increase for FY2017.

Want Want Holdings posted a RMB 20.27bn ($3.17bn) revenue for the year ended on March 31, 2018.

Tsai said the increase was mainly driven by the company’s transformation to its branding, distribution, sales channels and the ways it has been communicating with consumers.

We started to explore the vending machine channel to supplement points of sales in both online and offline channels last year,”​ said Tsai. “This year, I also asked our frontline sales team to enhance market information collection and timely feedback so that we can capture the latest market trends.

He added that “the current trends in China of having a second child and consumption upgrade have opened more market opportunities in the maternity channel.”

Despite the rise, Want Want’s gross profit margin dropped to 43.1% due to rising costs of raw ingredients and packaging materials.

Driving rice cracker sales

Want Want operates four main businesses: Rice crackers, dairy products and beverages, snack foods (including candies, popsicles, ball cakes, jellies and nuts), and other products (mainly wine).

In FY2017, revenue from the rice crackers and the snack foods segments together accounted for 52.1% of the company’s total revenue.

Rice crackers generated RMB 5.65bn ($883m) in sales for the period, up from RMB 5.22bn ($816m) the year prior. The snack foods business posted RMB 4.96bn ($775m), increasing from RMB 4.77bn ($745m).

According to Tsai, although over 90% of its business comes from Mainland China, its international market is growing rapidly.

“Revenue from overseas markets achieved a double-digit growth in fiscal year 2017, becoming one of the main drivers of our rice cracker’s sales growth,”​ he said. “The Group plans to further explore overseas market opportunities.”

2018: Year of dog

Tsai noted this is Want Want’s first new financial year after its financial year end date was changed from December 31 to March 31 last year due to different timing of the Lunar New Year.

He said: “Different timing of the Chinese New Year in each year may give rise to a substantial year-on-year fluctuation of the operating results of the Group with a financial end date of December 31, thus affecting the perception of the Group’s actual underlying business performance.”

He added the company will certainly take advantage of the year of the dog to boost sales as “Want Want”​ is an onomatopia for “dog barks”​ in Chinese.

“On Chinese New Year, I heard the crowds shouting ‘Want Want,’ [which has not been seen in 12 years – the previous year of the dog],”​ he said.

Related topics: Emerging Markets, Snacks, Manufacturers