Orion and Lotte Wellfood have gone head-to-head in the fresh cream pie market. After Orion recently released "Shall We," directly targeting Lotte Wellfood's flagship product "Mon Cher," the industry says a rivalry dating back more than 50 years has been revived.
According to the industry on the 22nd, Orion and Lotte Wellfood have engaged in tit-for-tat competition for more than 50 years by releasing similar-concept products (me-too) whenever a particular product hits. Orion recently reignited that competition. The new product "Shall We" that Orion unveiled is a fresh cream pie that uses fresh cream instead of marshmallow used in its flagship product "Choco Pie Jeong (情)." It is similar to Lotte Wellfood's "Mon Cher." As the latecomer, Orion set the price of Shall We lower than Mon Cher based on bundle composition.
The me-too battle between Orion and Lotte Wellfood has a long history. In the industry, the two corporations are often called "rivals that copy each other's hit products the fastest," as cases of following the main hit product concepts have repeated.
The most famous is "choco pie." In Korea, the first to release a choco pie was Orion. When Orion (then Dongyang Confectionery) launched a choco pie in 1974 and grew the market, Lotte Wellfood released a similar choco pie product. Legal disputes followed over the name choco pie and its packaging and expressions. At the time, the court ruled that "choco pie" was not the exclusive property of a specific corporation but had become a common noun, and the legal battle came to a close. However, as Orion established itself in the market and consumer memory as the representative brand of the choco pie market, it is perceived as the "original."
This me-too war has continued. When Orion's "Fresh Berry" sold well, Lotte Wellfood also entered the competition with a similar-concept product. In the biscuit market, after Lotte Wellfood built a long-running brand image with its flagship product "Margaret," Orion released a similar product called "Marronnier."
In the industry, the two companies are sometimes described as "rivals that copied each other the most while also helping each other grow the most." That is because the structure has repeated in which one side researches, develops and releases a new hit product and the other quickly chases it.
The problem is that this competition has led not to overall market growth in scale but to a fight to split the existing pie. Even if products of a similar type increase in the premium pie market represented by Mon Cher, the market itself is not growing; instead, battles over market share among brands keep repeating. A distribution industry official said, "In the short term, it will help fill sales gaps, but the more intense the price and promotional competition becomes, the harder it gets to defend margins."
In this situation, the reason the newly sparked "Shall We vs. Mon Cher" showdown is drawing particular attention in the industry is that the fight is unlikely to remain confined to the domestic market. The industry sees a strong chance that Orion will gauge the reaction to Shall We in the domestic market and then move to expand overseas. Orion earns about 70% of its revenue abroad, and the combined revenue of its Russia and China subsidiaries alone accounts for more than half of the total. Lotte Wellfood, too, once achieved a market share approaching 90% in India by leading with choco pie.
A confectionery industry official said, "Currently, Shall We is sold only domestically, but if its performance or competitiveness is confirmed in the domestic market, the company is likely to revisit whether to expand overseas," adding, "That is why competition on domestic shelves could well be a trailer for global competition."
Seo Yong-gu, a professor in the School of Business at Sookmyung Women's University, said, "In a society where trends change rapidly, creating something completely new is getting harder and harder. That is why the strategy of benchmarking successful formats and models and then varying them has hardened into a survival tactic," while adding, "For consumers, the criterion that decides the winner will be who more clearly shows their own distinct color." He went on to say, "The longer the domestic slump lasts, the more frequently brands that collide at home will compete overseas as well."