[Exclusive] Daesang's 'Lianyungang Factory' Fully Operational... Wings for China Business "50 Billion KRW Target by 2030"

Convenience Foods and Kimchi Produced at Lianyungang Factory... Operating Two Local Production Bases
China Business Sales Expected to Surpass 67 Billion KRW, Convenience Foods Achieve 10 Billion KRW Sales Success

[Asia Economy Reporter Lee Seon-ae] Daesang is setting a vision to achieve 500 billion KRW in sales in China by 2030 and is actively expanding its business. Recently, it started operating a new factory in Lianyungang, China, aiming to grow its business based on local production and secure new growth engines.

Full-scale Local Production and Sales of Convenience Foods and Kimchi

On the 18th, it was confirmed that the Lianyungang factory, established with an investment of about 25 billion KRW, completed construction and production permits in September and began full-scale production in October. The total site area is 33,000㎡ (about 10,000 pyeong), with an annual production capacity (CAPA) of about 20,000 tons. This factory is an expanded relocation of the Miyun factory in Beijing that was previously operated, and as a result, Daesang currently operates two factories locally in China, including the Tianjin factory producing red pepper powder and red pepper seasoning.

Daesang officially started its business in China by establishing Daesang Beijing Food Co., Ltd. in 2008 and later established Daesang Lianyungang Food Co., Ltd. in March 2019. The reason for choosing Lianyungang as the location is to leverage its geographical advantage as a logistics hub. Lianyungang is recognized as one of China’s top 10 container ports alongside Shanghai and Qingdao. It is also famous as the starting point of the Trans-China Railway (TCR), connecting inland China with Kazakhstan, Russia, and Rotterdam in the Netherlands.

Daesang plans to target the Chinese market by producing convenience foods, kimchi, sauces, and more at the Lianyungang factory, reflecting local consumer needs. In particular, it aims to secure a solid competitive edge by expanding marketing activities using e-commerce platforms.

A Daesang official stated, “With the operation of the Lianyungang factory, we have laid the foundation to expand existing businesses and secure new growth engines. Based on differentiated technology, we will continuously launch products that reflect local consumer needs to expand sales and achieve annual sales of 500 billion KRW by 2030.”

Chung Jung One Cheese Cup Tteokbokki product sold by Daesang in China.

Expanding Channel Sales and Strengthening Marketing

Daesang’s food business in China is rapidly growing, centered on convenience foods and kimchi. Especially, the convenience food business, led by cup tteokbokki, is showing remarkable growth. This year, Daesang’s sales in the Chinese convenience food market are expected to surpass 10 billion KRW just over three years after entering the market in 2017. The cup tteokbokki sold in China offers various flavors such as “spicy-sweet,” “cheese,” “curry,” “kimchi,” and “lactose (condensed milk),” tailored to local tastes, and products in pouches have also been introduced for customer convenience. In addition, Daesang is targeting the Chinese market with a variety of locally specialized products including cup jajangmyeon, cup bibimmyeon, spaghetti, naengmyeon (cold noodles), cup pizzas like “cream cheese,” “margherita,” and “spicy-sweet,” as well as meal kits such as budaejjigae and kimchijjigae. Daesang is expanding convenience food marketing activities not only on existing e-commerce platforms like Alibaba, JD.com, and Pinduoduo but also on new platforms such as TikTok and Kuaishou, and plans to continuously expand live commerce in collaboration with wanghong (Chinese influencers).

Jongga Kimchi focuses on sales through key channels such as local large supermarkets, convenience stores, and online platforms. Currently, it sells Korean-style kimchi including pogi kimchi, mat kimchi, and chonggak kimchi, as well as locally specialized pickled products like bamboo shoots, zha cai, and seaweed. To differentiate packaging, PET packaging has been introduced and small-sized products have been launched to enhance customer convenience. Recently, marketing activities have been strengthened with an emphasis on kimchi as a “healthy food that allows you to enjoy various vegetables at once,” including online advertising. Additionally, to expand the B2B business, Daesang proposes various ways to utilize kimchi to large fast-food chains, chain restaurants, and convenience stores, and is jointly promoting new menu development.

Marketing is also being strengthened for products produced domestically and exported to China, such as sauces, snacks, seaweed, and seasonings. Sales networks are being expanded mainly through online platforms, and partnerships with large-scale clients are being reinforced to promote new product development and promotional activities. Furthermore, Daesang plans to continuously launch new products by developing purpose-specific and customized products reflecting Chinese consumer needs beyond the currently sold products.

Based on this, Daesang’s sales in China have approximately doubled over the past three years, and sales this year are expected to exceed 67 billion KRW. As the China business continues to progress smoothly, Daesang’s overall overseas business sales are also expected to gain momentum. Overseas sales have shown an upward trend from 483.7 billion KRW in 2015 to 673 billion KRW in 2016, 722.4 billion KRW in 2017, and 818.8 billion KRW in 2018. Last year, it achieved 911.5 billion KRW, and this year it is on track to reach the first overseas sales milestone of 1 trillion KRW.

This content was produced with the assistance of AI translation services.