Lotte Confectionery partners with DKSH to expand in Singapore

By Douglas Yu

- Last updated on GMT

Lotte Confectionery has plans to expand in Singapore. Pic: DKSH
Lotte Confectionery has plans to expand in Singapore. Pic: DKSH
Lotte has partnered with DKSH, a market expansion services provider, to expand its confectionery products’ footprint in Singapore.

The South Korean conglomerate established its Singapore headquarters in 2011, and has since been targeting markets, including Malaysia, Indonesia, Brunei, the Philippines in addition to Singapore, with products such as Pepero biscuit sticks, the Lotte Choco Pie and Lotte Custard Cream Cake.

With the partnership, Lotte said it “entrusts the full suite of marketing and distribution activities for its products in Singapore to DKSH.

“This includes sales management, key account and product management, credit control services, warehousing and stock management as well as order fulfillment.”

The confectioner added: “With DKSH’s vast experience in the consumer goods industry and its unique capillary distribution network, Lotte can tap into comprehensive market expansion solutions that include diversified marketing strategies and advanced distribution methods to achieve its goal of penetrating the Singaporean market.”

Lotte said it also plans to bring some of its domestic Korean products into the region.

Asia’s confectionery market

According to DKSH, Asia has become a “prime target”​ for regional brands to expand their businesses, resulting in the growth in inner-Asian trade.

“Today, approximately 30% of DKSH’s clients are of Asian origin,”​ it said, and the outlook for Asia’s confectionery market is promising.

“According to Statista, revenues in the Asia confectionery segment amounts to $80.3bn and are expected to grow annually by 5.7% (CAGR 2018 to 2021),”​ added DKSH. “Singapore’s confectionery segment is even expected to grow annually by 7.4%.”

Lotte taps into premium

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Lotte is traditionally known for its mass produced confections, snacks and baked goods, and it is the largest chocolate producer in South Korea followed by Ferrero, Crown Confectionery, Mars and Hershey, according to Euromonitor data.

However, the company has recently tapped into the premium category as Asian consumers demand for higher product quality and ingredients transparency.

In 2015, Lotte launched a range of cakes, called Farm on The Road that focuses on linking the provenance of the ingredients to the finished product.

“The brand’s name, the picture of a tractor on the pack and the imagery of some of the raw ingredients give consumers the feel this is made from products straight off the farm,”​ said Mintel.

“The pack also details the origin of the ingredients, including the use of tangerines from Jeju Island and Isigny butter from Normandy in France. Priced at KRW3200 ($3.02), this is a more premium product than Lotte’s popular Choco Pie snack cake,”​ it added.

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