Ningxia Jinhe Dairy: Riding the Pinduoduo Wave, a Legacy Brand Finds New Life and Expands Nationally

Tech 2025-03-19 16:13:01 Source: Network

Ningxia Jinhe Dairy: Riding the Pinduoduo Wave, a Legacy Brand Finds New Life and Expands NationallyFor a couple of years, Jinhe Dairy, a Ningxia-based legacy brand with over two decades of history, faced significant challenges: declining profits, limited brand awareness confined to Ningxia, losing ground to major dairy companies, and shrinking shelf space in supermarkets. Founder Yan Jianguo was deeply concerned

For a couple of years, Jinhe Dairy, a Ningxia-based legacy brand with over two decades of history, faced significant challenges: declining profits, limited brand awareness confined to Ningxia, losing ground to major dairy companies, and shrinking shelf space in supermarkets. Founder Yan Jianguo was deeply concerned. However, with the help of Pinduoduo, this old brand successfully achieved a remarkable turnaround and is now expanding into the national market.

In 1998, Yan Jianguo founded Jinhe Dairy and launched its classic "Little Yellow Bag" yogurt. This product quickly became a childhood memory for a generation in Ningxia, similar to Wahaha in Zhejiang and Jiangsu, and Jianlibao in Guangdong. Jinhe Dairy's subsequent yogurt products filled the shelves of supermarkets and convenience stores across Ningxia's rural and urban areas, making the Jinhe brand a household name. However, the advent of the e-commerce era saw Jinhe Dairy, a bit slow to react, miss the best opportunity for national market expansion, even facing intense competition in its home market of Ningxia.

Located at 38 degrees north latitude, Ningxia enjoys abundant sunshine. The natural barrier of the Helan Mountains blocks cold air currents, nurturing vast pastures. The slightly alkaline nature of Ningxia's grasslands also results in milk with higher levels of trace elements. Yan Jianguo points out that Ningxia milk has 60% higher glutamic acid content than milk from other regions, giving it a unique fresh taste and even reaching a safe standard for direct consumption at the milking stage. Jinhe Dairy established its foothold in the Ningxia market precisely because of this unique resource advantage.

Jinhe yogurt holds countless childhood memories for people in Ningxia. Initially, the traditional yogurt was packaged in round glass jars, requiring a deposit from consumers. The 1998 launch of the "Little Yellow Bag" yogurt not only redefined the taste of yogurt but also offered a new drinking experience. That year, sales reached 5 million yuan, exceeding 20 million yuan the following year and 50 million yuan in the third year. Subsequently, annual sales exceeded 100 million yuan, making Jinhe a household name in Ningxia and even the Northwest region.

Building on the success of the "Little Yellow Bag" yogurt, Yan Jianguo established "Se Shang" Dairy, expanding the product line to include protein powder, cream, and more. Over two decades, he built the brand into a leading name in Ningxia's dairy industry. Data shows that by October last year, Se Shang Group's total output value exceeded 1.3 billion yuan. However, compared to Mengniu and Yili, which were also founded in the 1990s, Jinhe Dairy's revenue scale still lags significantly.

Yan Jianguo has always harbored ambitions for a nationwide market. He has developed dozens of new products, including concentrated milk protein powder, cream, thick milk, and condensed milk, and has become a raw material supplier for companies like Starbucks and McDonald's. In 2023, Se Shang Dairy enjoyed a boost from the "Soy Sauce Latte" collaboration between Luckin Coffee and Moutai, using Se Shang's thick milk as an ingredient. However, as a supplier to major companies, Jinhe Dairy primarily played a "behind-the-scenes hero" role. Yan Jianguo yearned to sell Jinhe products directly to consumers nationwide.

Ningxia Jinhe Dairy: Riding the Pinduoduo Wave, a Legacy Brand Finds New Life and Expands Nationally

However, getting products to the national market became a major challenge for Jinhe Dairy. "The traditional supermarket channel is no longer viable; shelf space is essentially monopolized by national brands. Although we have pasture advantages, it's difficult to translate that into consumer recognition nationwide," says Jin Kaijia, Jinhe Dairy's e-commerce director.

In 2023, Jinhe Dairy's outstanding performance on Pinduoduo brought new hope. Jin recalls that after joining Pinduoduo in 2020, Jinhe Dairy's sales quickly reached 3-4 million yuan, organically generated without significant marketing efforts. Through platform order data, they discovered that many orders came from young people in first-tier cities like Beijing, Shanghai, Guangzhou, and Shenzhen.

Subsequently, Jinhe Dairy increased its investment in Pinduoduo, opening a brand livestream studio. Through "cloud pasture" livestreams and nutritionist presentations, they showcased the companys pasture advantages and technological expertise. Through livestream interactions, Jinhe Dairy learned that young people prioritize health, leading them to develop skim milk. This product retains essential proteins and calcium while removing unnecessary fat, making it suitable for people with hypertension and obesity. It quickly became a flagship product on their Pinduoduo store and gained a leading position in its market segment.

Jinhe Dairy further increased its Pinduoduo investment, actively participating in platform promotions like "10,000-person group buys" and "3-person group buys," rapidly expanding its young user base, with monthly sales quickly exceeding millions of yuan.

During its national expansion, logistics costs were a major concern for the Ningxia brand. In 2023, Ningxia's social logistics costs as a percentage of GDP were 16.2%, 1.8 percentage points higher than the national average. Yan Jianguo estimates that logistics costs account for 35% of Jinhe dairy product prices, eating into a significant portion of the profit margin. For remote areas like Tibet, the shipping cost for 3 kilograms of milk was as high as 38 yuan, exceeding the product price.

In the second half of last year, Pinduoduo launched its "E-commerce Westward Expansion" policy, covering the transfer fees for orders shipped to western regions like Tibet via transit warehouses. After the policy's implementation, orders from Ningxia to Tibet, shipped via Xi'an, cost only 4-5 yuan for 5 kilograms of milkless than one-tenth of the previous cost. This helped Jinhe Dairy rapidly open markets in places like Tibet, with local order sales quickly exceeding thousands of yuan.

Ningxia Jinhe Dairy: Riding the Pinduoduo Wave, a Legacy Brand Finds New Life and Expands Nationally

Simultaneously, Pinduoduo's "Hundreds of Billions of Subsidies" and "Hundreds of Billions of Support Plan for New Quality Merchants" provided significant support to Jinhe Dairy and other local legacy brands, reducing technology service fees, promotion costs, and providing traffic support to help improve efficiency. With reduced costs, Jinhe Dairy increased its new product development efforts. For example, they launched 250ml small-sized packages and limited-edition national-style milk products targeting Generation Z. These products achieved a 42% repurchase rate, building a strong reputation among young white-collar workers in first-tier cities.

Thanks to the success of several new products, Jinhe Dairy's sales on Pinduoduo exceeded 15 million yuan last year, successfully transforming into a national brand. Yan Jianguo stated that Jinhe Dairy will continue to invest in technology, develop new products like light yogurt and milk beer, embrace young consumers, and accelerate its expansion into the national market.

Jinhe Dairys success story demonstrates the potential for traditional businesses to leverage e-commerce platforms for transformation and upgrading in the new era. When consumers taste Jinhe milk, they not only experience the nourishment of the sun at 38 north latitude but also witness the transformative power of traditional industries leveraging new supply methods and climbing to the high end of the value chain.

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