Nongshim's overseas market strategy is progressing in all directions. Nongshim had targeted the overseas market early on with products like Shin Ramyeon, but recent results seem to have fallen behind Samyang Foods, led by its spicy chicken ramen.
According to the distribution industry on the 3rd, Nongshim's overseas market strategy is currently in progress across various fronts. While aggressive strategies are a major challenge for food and beverage corporations this year, there is a notably aggressive approach focused on overseas marketing.
First of all, Nongshim formed a partnership with Cheil Worldwide for global advertising of Shin Ramyeon Tumbler. Cheil Worldwide is noted as the advertising agency for the spicy chicken ramen, which is credited with driving up Samyang Foods' stock price to 1 million won.
Recently, Nongshim has been continuing its advertising in prominent tourist cities in a pop-up format. A representative example is the water bus in Venice, Italy, which features advertisements for Shin Ramyeon on its exterior to enhance brand awareness.
In Peru, the first Shin Ramyeon snack franchise has opened, located near the well-known tourist attraction Machu Picchu in the city of Aguas Calientes. In February, Nongshim also made an appearance at the Sapporo Snow Festival in Japan, where it created a Shin Ramyeon ice rink and operated a tasting booth where people could enjoy Shin Ramyeon.
To prepare for when exports expand, Nongshim has also expanded its manufacturing facilities. The company has begun construction on a factory in Noksan, Busan, aiming to complete it in the second half of next year. The Noksan factory will serve as a new production base for Nongshim's export products, enabling annual production of 500 million ramyeon. Consequently, the exportable ramyeon will increase to 1.2 billion units a year, accounting for 92% of Nongshim's ramyeon export volume.
Nongshim has also established a new overseas corporation. In March, the company formed a European corporation called 'Nongshim Europe' (Nongshim Europe B.V.) in Amsterdam, Netherlands.
This movement comes as Nongshim aggressively pursues its overseas market strategy to rebound its performance. The company has set a goal to double its revenue and increase the overseas proportion within five years, ultimately aiming for a consolidated revenue of 7.3 trillion won and an operating margin of 10% by 2030.
This is also related to the criticisms raised at the shareholders' meeting in March. Park Young-Ok, known as the 'super ant' for turning an initial investment of 45 million won into assets worth over 100 billion won, attended the recent meeting and noted, "While Nongshim's operating margin is around 4-5%, its market capitalization is only about 2 trillion won. In contrast, Samyang Foods has an operating margin of approximately 20% and a market cap of 7 trillion won." Park added, "While Samyang Foods' stock price has grown about 45 times from around 20,000 won in 2015 to 900,000 won currently, Nongshim's stock price has (practically) declined during the same period, and it seems the employees are not feeling a sense of crisis at all, which is disappointing."
In response to the shareholder criticism, Lee Byung-Hak, CEO of Nongshim, stated, "We will focus on radical improvements to our revenue structure and sustainable growth in the domestic market through low-profit business/channel improvements, cost efficiency, and cost structure improvements. The resources secured through these efforts will be actively utilized for global business growth and capability enhancement."