PEPSICO Inc. today opened its largest research center outside the United States in Shanghai as it seeks to boost sales in China and Asia.
The world’s second-largest soft-drink maker spent up to US$45 million on the facility, which will help the company to develop new products for China and Asia, the company said in a statement.
The new research center is part of PepsiCo’s 2010 plan to invest US$2.5 billion in China over a three-year period and expand food and beverage offerings beyond Pepsi cola, Tropicana juice, Quaker oats and Lay’s potato chips in the region.
The move was also considered an effort to narrow its gap with market leader Coca-Cola Co.
“China is a critical part of our global strategy, our growth engine and it makes absolute sense that we do as much of our innovation close to the Chinese consumer and the Asian consumer on the ground,” PepsiCo’s Chief Scientific Officer Mehmood Khan said at a press briefing, according to Bloomberg.
The company is also counting on sales in China and Asia-Pacific to drive earnings in the emerging markets, after its profit growth slowed last year.
PepsiCo’s soft-drink products accounted for 4.9% market share in China in 2011, while Coca-Cola led with a 15.8% market share and Tingyi (Cayman Islands) Holding Corp held 13.1% share, according to London-based researcher Euromonitor International.
Source: People’s Daily Online Nov 2012