China's 'Involution' Hurts Wei Chuan Foods' Performance, Chairman Says

Wei Chuan Foods Chairman Hsu Wen-fang attributed the company's sluggish performance, particularly in the Chinese market, to intense domestic competition, a phenomenon often referred to as "involution" or "nei juan."

The food and beverage company has faced profitability challenges in recent years. Last year, Wei Chuan's consolidated revenue fell by 6.95% to NT$21.84 billion, with consolidated operating profit at NT$366 million and net profit after tax at NT$203 million, translating to NT$0.4 per share. The first quarter of this year saw earnings per share of NT$0.2.

During the company's shareholders' meeting, Chairman Hsu expressed cautious optimism for the second half of the year, despite acknowledging the headwinds. Wei Chuan is implementing strategic transformations across its operations in Taiwan, China, and international markets. In Taiwan, the focus is on deepening relationships with key retail partners, developing new channels and customer bases, concentrating on core product categories and brands, enhancing quality and cost competitiveness, and optimizing operational models. For the Chinese market, strategies include expanding key accounts and retail networks, focusing on major single products in juice and dairy, integrating resources for cost efficiency, improving supply chain and logistics, and nurturing talent. International business development will center on strategic partnerships with major clients, expanding into new regions, focusing on core brands, optimizing raw material procurement, and cultivating international talent.

“

The Chinese market has always faced the problem of involution, but Wei Chuan is actively transforming, hoping that the transformation effects will become apparent in the future and operations will get better and better.