Inner Mongolia Mengniu Dairy Industry (Group) Co Ltd (Mengniu), China's leading dairy producer, moved closer to overseas expansion yesterday, when it announced a promotional partnership with the National Basketball Association (NBA).

 

Financial figures were not disclosed, but executives from Mengniu emphasized that domestic operations would continue to be the company's primary focus.

 

Under the partnership, Mengniu will have the opportunity to promote itself on the NBA's Chinese website and NBA programs broadcast over China's 51 TV channels. It can also sponsor sports and entertainment events offered by NBA China, including this year's NBA Jam Vam.

 

"The partnership will accelerate Mengniu's internationalization process," said Bai Ying, Mengniu's vice-president and general manager of the Normal Temperature Liquid Milk Department.

 

"This is only a start, and we will maximize the partnership, developing all-round cooperation beyond China," added Bai, who refused to elaborate, but noted "actions speak louder than words".

 

Partnership talks started about three years ago, Bai said, culminating with Mengniu becoming the first Chinese food and beverage brand to team up with the NBA. The popular world sport brand, which landed in China in 1987, has 19 partnerships of this kind here.

 

"NBA stands for positive values that Mengniu shares, like health," said Mark Fischer, managing director of NBA Properties Inc Beijing Representative Office. "We are both dedicated to improving the lives of people, especially younger people."

 

"I believe it will be a big help to Mengniu to build up its brand, and eventually business, in other parts of the world, the same as that with Haier and Lenovo."

 

NBA partnered with the two major Chinese brands last year, and insiders said the move would assist their overseas promotion.

 

"The potential of the partnerships is the same," Fischer agreed.

 

Although its dairy products have been on sale abroad since 1999, Mengniu did not focus on foreign markets until two years ago with a series of deals signed with overseas partners.

 

Last December, Mengniu joined with France's Danone, taking a 51 percent share in their joint venture.

 

Mengniu signed a three-year contract on January 12 with Malaysia Seagull Group, which will act as Mengniu's sole agent in Malaysia, where Mengniu hopes to gain a 10 percent market share.

 

The overseas moves come as the firm holds the top position in the domestic market. Since 2003, Mengniu has topped China's milk market for three consecutive years, and its ice-cream market in 2005; it has also been the best seller in the yogurt sector for the past 15 months.

 

East and Southeast Asia are Mengniu's target markets, said Bai, although it has entered the United States and Canada as well.

 

Although Mengniu is the largest of its kind in exports, "the overseas market is still a smaller part, only contributing 10 percent to sales - the domestic market will be the biggest thanks to China's large population," Bai said.

 

(China Daily January 23, 2007)