Nissin Foods Win Chinese Hearts

Japanese instant noodle mogul, Nissin Food has vowed to create a healthier product so as to maintain its popularity with its large Chinese consumer base.

The company announced its plans to dominate the hard-to-penetrate Chinese market by focusing on the premium segment.

Speaking of the move to CNBC today, the company’s CEO and executive director, Kiyotaka Ando stated, “Some consumers stopped consuming instant noodles, but most consumers want to increase the quality (of food they consume). We can supply high-quality products so we have more possibility to develop our business (in China)”.

He went on to state that there has been a noticeable, double digit growth in demand for high quality instant noodle brands in China.

Ando made this statement despite statistics showing that the consumption of the standard variation of instant ramen dropped by almost 17% in China in the past fiscal year.

The company did not fare well in early trading either. Nissin Foods listed the shares of its Hong Kong and China business on the Hong Kong Stock Exchange today after raising close to $122 million in its initial public offering.

However, the company recorded a 12% fall in shares.

The company was the brainchild of Ando’s grandfather, Momofuku Ando. The company is currently the largest noodle supplier in Hong Kong, and boasts of a 65% market share based on retail sales value.

The company’s strong presence in Hong Kong is a polar opposite of its status in China. The company can claim only a 2.6% market share in the second largest economy in the world.

Analysts are a bit on the fence about Nissin Foods’ prospects. Some, like Kevin Leung, Director for global investment strategy at Haitong International Securities, believe the company could have a promising future.

However, he admits that the company’s valuation is too high.

Regardless, Nissin Foods knows that unless it manages to win over China’s booming market, its success will forever be incomplete.