Since the 1960s, Instant noodles has long been a top-of-mind budget staple. Riding on its extensive retail and media penetration, Nissin gradually marked its dominance in the Hong Kong instant noodles market. However, recently, challenging this steady dominance are the emerging foreign players. Not only have these rising stars added turbulence in brand shares, but they have also brought newly developed products, putting forward three disruptions in the market.
South Korean brands gearing up their share
Before 2013, Nong Shim Co Ltd was perhaps the only significant South Korean instant noodle player in Hong Kong. In the 2000s, Nong Shim pioneered in exporting South Korea-unique spicy instant noodles to the rest of the world. Its classic “Shin” noodles successfully won a loyal fans base in Hong Kong.
Witnessing Nong Shim’s triumph, other South Korean instant noodles brands also surged into Hong Kong for such huge business potential. Ottogi Foods Co Ltd reacted the most swiftly and introduced its symbolic cheese ramen in Hong Kong. Later, Sam Yang and Paldo also launched their signature hot chicken ramen and “Gomtang” (beef bone soup) respectively.
All of a sudden, Hong Kong consumers were exposed to a great diversity of spicy flavour instant noodles. Such unprecedented novelty and Hong Kong consumers’ high acceptance of spicy food became a synergy. These four biggest South Korean brands hence rapidly drained Hong Kong consumers’ affiliation.
More astonishingly, they even managed to shape consumers’ stronger favour towards spicy instant noodles. As shown in the graph below, the collective market share (in current price retail value terms) of the four biggest South Korean brands tripled in the past seven years. Their shares spiked in 2018 and recorded a new high of 19% in 2019. Meanwhile, the market dominance of Nissin Foods Co Ltd, which owns Nissin and Doll, started to wane in 2017.
Source: Packaged Food 2020 Edition, Euromonitor International
Hong Kong and Taiwanese stirred noodles reviving
From 2007 to 2017, stirred noodles was fading from the market. Consumers were shifting their preference from budget stirred noodles to more premium and original instant noodles choices. However, three emerging premium brands stirred up consumer interests again in 2017.
Celebrity endorsement was not a frequent practice in the Hong Kong instant noodles market, but Tsang Noodles and Lao Ma Noodle shone by featuring stars. The endorsement of Taiwanese television host Sam Tseng and Taiwanese singer A-Lin premiumised the brand image and boosted the sales of Tsang Noodles and Lao Mao Noodle, respectively.
In June 2019, Lao Ma Noodle even extended its territory to the foodservice realm and established its first overseas foodservice outlet in Tseung Kwan O. Just one month later, Kiki Noodles (founded by the famous Taiwanese-Hong Kong actress Shu Qi) also opened its first “Kiki Noodle Bar” in Central. These premium stirred noodles products appeal to the novelty-seeking younger generation, so sustainable future growth of these brands can be foreseen.
Nissin striking back with innovative noodle and seasoning powder combination
Consistent with its usual high resilience, Nissin reacted to these market disruptions by stepping up its product innovation in recent years.
For instance, in January 2019, Nissin collaborated with Menya Musashi, the famous Japanese ramen brand, to bring out two pork bone soup instant noodle cups, refreshing the market with highest-standard authenticity of local Japanese ramen shops.
In May 2019, it even took one step further by introducing two brand new Cup Noodles products in western soup flavours, Clam Chowder and Lobster Bisque. The promotional slogan “tasting the highest-class western culinary magic” highlighted the unprecedented originality of instant noodles in western soup.
Later in August, in order to combat South Korean spicy instant noodles, Cup Noodles launched extra spicy tonkotsu (pork bone soup) and seafood flavours. These new products soon rejuvenated Nissin’s brand image and affiliation, especially among younger consumers.
Source: Euromonitor International
Who are the ultimate winners?
All in all, both the old and new instant noodles players are initiating market disruptions to enhance their competitiveness. Such vigorously-paced and dynamic competition may be a double-edged sword to players. But without a doubt, consumers can benefit a lot from this market evolution.
After about 20 years of market inertia and selection fatigue, Hong Kong instant noodles consumers are finally becoming exposed to a greater diversity of product choices. After all, consumers should be the ones who embrace the disruption of instant noodles the most!