Abstract
This case series focuses on branding efforts of Oatly, a Swedish oat-based foods producer, since its entry into the Chinese market. It revolves around the brand strategy adopted by Oatly China's management team headed by Asia president David Zhang, which placed a premium on sustainable development through ESG (environmental, social, and governance) initiatives. It also introduces how Oatly's value proposition struck a chord with Chinese consumers.
This case series first introduces Oatly's background and history and the challenges it faced as a new entrant on the Chinese market. At that time, plant-based protein-rich foods were still relatively niche in China, and Chinese consumers were not fully aware of how these foods might be related to carbon cutting or ESG issues. It was clear that the formula for penetrating the European market would not work in China. In the circumstances, David and his team decided to market Oatly's bestseller "Oat Drink Barista Edition" to coffee houses in Shanghai, so that the latter could sell oat-based coffee drinks like oat milk latte.
The partnerships with coffee houses gave Oatly significant brand exposure while turning oat milk latte into a bestselling product. This laid a foundation for Oatly's cooperation with Starbucks China, the largest coffeehouse chain in the nation, allowing it to consolidate its expansion and gain popularity. Next, Oatly doubled down on brand extension. While striving to provide more B2B solutions, it broke into the B2C marketplace through brand alliances. Additionally, it overcame supply chain weaknesses by producing locally.
Thanks to these efforts, Oatly established itself as a leading provider of plant-based drinks in China. Given the fierce competition in the ballooning yet homogenous market for plant-based drinks and the mismatch between Oatly's global strategy and local conditions, David and his team had to create a more memorable brand identity that would appeal to Chinese consumers, and define the unique value that Oatly could deliver to Chinese consumers – for example, Oatly's products were environmentally friendly, and might become a social lubricant for young people.
Oatly is a typical example of how a brand could work with various parties to carve out a market for a new product category overseas. Oatly's brand strategy designed based on ESG considerations, as well as the challenges it encountered in the Chinese market and the way it interacted with Chinese consumers, can provide assistance and reference for other companies hoping to help achieve China's "30-60" targets.
Translated title of the contribution | How Oatly Carved Out a Market for Plant-based Drinks in China |
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Original language | Chinese (Simplified) |
Number of pages | 16 |
Publication status | Published - 1 Jun 2023 |
Case number
MKT-23-059Case normative number
MKT-23-059-CCCase type
Field CaseUpdate date
02/06/2023Supplement
For more details, please visit www.chinacases.orgPublished by
China Europe International Business SchoolKeywords
- Brand Extension
- Brand Strategy
- Branding in the B2B marketplace
- ESG
- brand alliance
- green, low-carbon diet
- plant-based
Case studies discipline
- Marketing
- Strategy
- Ethics & Social Responsibility
Case studies industry
- Manufacturing
- Others
- Retail Trade