Targeting Korean Tourists: Chung Hsiang Identifies Opportunities and Enters Carrefour
After spending 47 years honing their craft of savory soda crackers, Chung Hsiang has observed the popularity of Taiwanese nougat sandwich crackers amongst Korean consumers, leading the company to actively invest in R&D. Chung Hsiang Executive Director Li Chuan-Wei explained that in order to access distribution channels, the company’s nougat sandwich crackers must have a shelf life of at least 5 months. Thus, they spent a lot of effort in development to make sure that the nougat sandwich crackers can maintain their crisp cracker and soft delicious nougat as if they just came fresh from the factory. The new nougat sandwich crackers were distributed through wholesale channels in Taiwan which resulted in the sales volume of the Guilin Carrefour in Taipei accounting for nearly one-third of sales of Carrefour across Taiwan. A closer inspection of the store saw that many Korean tourists were buying in bulk. This allowed Chung Hsiang to better understand the popularity of Taiwanese nougat sandwich crackers amongst Koreans and study the possibility of entering the Korean market.
From Carrefour to Costco Korea: Taiwanese Crackers Test the Waters in Korea
Once Korean distributors got wind, they immediately contacted Chung Hsiang for distribution rights. Chung Hsiang, who had only dedicated their efforts in the Taiwanese market, were initially hesitant towards foreign markets and lacked a substantial marketing budget; however, Korean distributors were extremely confident and recommended Chung Hsiang allow distributors to stock the 12 Costco wholesalers in Korea.
From Costco to Supermarkets: Taste Marketing Establishes a Reputation for Asia’s Nougat
Korean distributors believed that the delicious taste of Chung Hsiang’s nougat sandwich crackers meant that “taste test” marketing at Costco would be a great way to experiment with new products. They believed that if tasted, Chung Hsiang’s nougat sandwich crackers would sell well amongst Korean consumers. However, due to Costco’s membership fee policy that allowed consumers to buy large packs of foreign products at discount prices, Li Chuan-Wei designed a new large 30 pack priced at approximately 9,900 KRW (approx. NT$270)to remain competitive with foreign products; ultimately, entire containers of products sold quickly. After seeing the smashing success of Chung Hsiang’s Asian nougat sandwich crackers at Costco, 7-ELEVEn also contacted Chung Hsiang’s Korean distributor; however, 7-ELEVEn requested that Chung Hsiang design a new smaller packaging. Li Chuan-Wei stated how he observed young women as the most prominent consumers, therefore they designed a special pink packaging with a cute doodle of a dairy cow. The box was labeled with “Asia’s Nougat Sandwich Cracker” to maintain Taiwan creativity; Taiwan’s flag was even posted on the racks of Korea’s 7-ELEVEn stores in order to emphasize the great taste of Taiwan.
Chung Hsiang’s Asian Nougat Sandwich Cracker Gains Popularity in Korea
An interesting fact is that due to Korea’s cold weather, Korean distributors recommended consumers to heat the crackers up in the oven; however, since 7-ELEVEn only carried microwaves as opposed to ovens, many consumers ended up microwaving the crackers. This resulted in a surge in popularity for the product as the nougat became smoother and featured a better texture. In a few short months, Chung Hsiang’s Asian nougat sandwich crackers sold up to 8 cargo containers in a month. Li Chuan-Wei believes that while Korea has many more import/export regulations for food products, Taiwan’s insistence on high quality will ultimately lead to success in Korea. Today, Chung Hsiang’s Taiwan plant plans to increase investments into automation equipment in response to increased demand in Korean markets.