By ZHAO Xiaojuan
ZHU Dingping, the president of Mead Johnson China, is to resign for personal reasons while retaining a consultancy role with a US-based infant formula maker.
Samantha Xiao, director of Mead Johnson China’s parent firm Primavera Capital, was named CEO. In September 2021, Xiao led Primavera’s acquisition of Mead Johnson China.
Appointed by Primavera, Zhu is a professional manager who has worked for 14 years at Biostime, the parent company of Mead Johnson.
In his early days in the position, Zhu proposed three major strategies: localizing the product portfolio, digitizing the customer base and expanding into the lower-tier market through partnerships with retailers.
Zhu's strategy had an immediate effect, especially considering the decline in foot traffic in maternity stores. Mead Johnson China maintains performance, but due to competition, sustaining such growth is challenging.
Mead Johnson China denies that Zhu's departure is related to performance pressure.
In Q2 2022, Mead Johnson China's operating income increased by over 20 percent compared to Q1. Profit growth of nearly 30 percent was above expectations.
The formula industry is under general pressure with the birth rate falling and demand along with it. Revenue is only inching up, or even declining, across the marketplace. A new national standard will also be a major test for the industry. Mead Johnson China's 22 formulas have passed the new national standard.
The three-child policy has not had the anticipated effect and this, coupled with price wars, means a high price will obstruct expansion into the lower-tier market. Plans include strengthening the brand and building a new image based on the “science” behind the products.
"Next year will be a crucial one, testing the foresight and efficiency of corporate decisions," Mead Johnson China told Jiemian News. Old inventory should be cleared in the first half of next year.
