Alumni Stories
Chai Xiu

Founder of China’s Fastest Growing Cheese Company Milkground

The Chinese cheese market is notorious for being a very difficult market to be successful. It is also one which brands outside China have traditionally dominated, such as the German brand, Milkana and the French brand, La Vache Qui Rit. However, this has been changed recently by the Chinese company Milkground – founded and led by CKGSB alumna Chai Xiu. She is taking the market by storm, growing its market share from 3.9% in 2018 to 33.8% in 2021.

In this new alumni series, we track down CKGSB’s most influential graduates, many of whom have gone on to lead unicorn companies – privately held companies valued at $1 billion USD or more. According to CB Insights – a global platform which provides authoritative and up-to-date information on the world’s billion-dollar private companies – China has created a total of 217 unicorn companies between 2017 to 2021. Thirty-nine (or 18%) of these companies are run by CKGSB alumni, including 35 companies where CKGSB alumni are founders or co-founders, and 4 companies where they serve as the chairman, CEO or president.

As China’s leading business school, it’s not surprising that CKGSB has been able to produce so many business leaders playing a pivotal role in China’s economic development. More than 18,000 successful entrepreneurs, industry leaders and executives of multinational corporations have chosen to study at CKGSB for the original China insights, world-class faculty and peer-to-peer learning with China’s movers-and-shakers. More than half of CKGSB’s alumni are at the CEO or Chairman level and, collectively, lead one-fourth of China’s most valuable brands.

The founder of Milkground and CKGSB alumna, Chai Xiu was inspired after visiting a cheese exhibition in France in 2007. She was astonished by the wide variety of cheese on offer and wanted to introduce this to China. Therefore, she dedicated several years after her visit to researching cheese and how to launch it into the Chinese market.

She told CKGSB, “for cheese to really be successful in China, it had to be based on the Chinese culinary tradition.” Chai Xiu explained that this was what international brands had failed to do – although Milkana had previously held approximately 23% of market share, this has recently plummeted as Milkground has gained ground and offered cheese products which consumers in China can relate to.

Milkground’s Breakthrough

Milkground’s success started in 2015 when the Company re-centered its entire dairy business around cheese, listed on the Shanghai Stock Exchange and increased production by building two factories and research centers in Shanghai and Tianjin. Chai Xiu knew that to change the eating habits of Chinese consumers she could not market only to adults since their eating habits are difficult to change. She told CKGSB that “Milkground needed to enter the children’s market, focusing on the health benefits that calcium, protein and vitamins have on children’s development”.

Milkground invested huge amounts in its marketing – its adverts, displayed across Chinese cities on television, billboards, and subway stations, are now familiar with most Chinese consumers.

In 2016, Milkground launched its children’s cheese sticks, a product which the brand is most well known for. Since then, Milkground has released a range of cheese products, such as cod cheese, cream cheese, cheese-flavored yoghurt, and mozzarella (for which it now has 70% of market share).

Whereas in the West cheese is often used in home-cooking, in China a large majority of Milkground’s market is either snacks or in the catering industry, and is often used in pizza or in whipped topping for bubble tea. There are currently no cheese fusion dishes in China but Chai Xiu is looking to expand into this market – at the 2019 Cheese Development Summit Forum she introduced Milkground’s cheese stuffed buns and cheese rice bowls.

Chai Xiu has transformed Milkground from a little-known company before 2015 into one of China’s largest cheese manufacturing companies. She led the company to 67% growth year-on-year, and an increase in revenue from RMB 36 million (USD $5.7 million) in 2016 to RMB 4.4 billion (USD $696 million) in 2021. Its products can be found across China, sold by 4,226 wholesalers and 360,000 retailers.

Chai Xiu has graduated from three courses at CKGSB, studying the EMBA program before her success with Milkground, the China CEO program when the company made its transformation and the Business Scholars program when Milkground had become a unicorn. Chai Xiu told CKGSB, “Had I not studied at CKGSB, Milkground might not have become China’s leading domestic cheese brand.”

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