As of last year, mail-order sales, which includes online shopping, is responsible for 15% of Nestlé Japan’s overall sales.
To increase online sales, the firm will focus on strengthening subscription shipments through its Ambassador programmes, namely the Nescafé Ambassador and the Nestlé Wellness Ambassador programs, Tokuo Hosokawa, media relations manager at Nestlé Japan told FoodNavigator-Asia.
“We will continuously strengthen the subscription service both in-home and out-of-home especially such as Nescafé Ambassador and Nestlé Wellness Ambassador,” Hosokawa said.
“Nescafé Ambassador is 100% subscription service and highly contribute to our online sales.”
Launched in 2012, Nescafé Ambassador is one of the main engines of online sales since the firm started its online shop in 2010.
It is an out-of-home business model aimed at attracting office workers to buy coffee capsules from the Nestlé exclusive online shop, allowing consumers to “have an easy cup of tasty coffee in the office at a reasonable price.”
Currently, there are 400k Nescafé Ambassadors and 90k Nestlé Wellness Ambassadors.
The firm hopes to increase its Nescafé Ambassadors to 700k and Nestlé Wellness Ambassadors to 250k by 2020.
Last year, Nestlé Japan launched the Wellness Ambassador programme, in hopes of “working on problem solving in healthy life expectancy with our new business model,” Hosokawa said.
The programme provides healthier beverage options, including smoothies rich in kale, milk containing collagen, amino acids, dietary fibre and matcha blended with glucosamine, gingko leaf extract and etc.
Similar to Nescafé products, these beverages also come in the form of capsules.
Although online sales are growing, Hosokawa highlighted that supermarkets are still the company’s main sales channel.
Nestlé Japan has had eight years of continuous sales and profit growth through December 2017, according to Hosokawa.
Last year, its overall sales saw a 30% increase from 2010, and Nestlé Japan's sales grew by 2.8%, compared to the 0.7% seen in the firm's developed markets, becoming largely responsible for the entire company’s profitability.
Coffee the way to go
Driven by the success of Nescafé Ambassador, coffee capsules are doing exceptionally well for Nestlé Japan's online sales.
Hosokawa pointed out that Dolce Gusto capsules and Nescafé Eco&System pack for Nescafé GoldBlend Barita machines are two of their best-selling items online. Most online transactions are done in Tokyo.
Japan’s domestic business-to-consumer e-commerce market expanded 9.1%, up from 15.1 trillion yen in 2016 to 16.5 trillion yen last year, according to the nation’s ministry of economy, trade and industry.
In 2010, the B2C e-commerce market was only worth 7.7 trillion yen, which was less than half of last year’s figure.
Domestic business-to-business e-commerce market also grew 9%, from 291.0 trillion yen in 2016 to 317.2 trillion yen last year.