Mondelēz China executives reportedly questioned as part of e-commerce investigation | News

Two senior executives at Mondelēz China have reportedly been questioned in connection with an alleged investigation into its e-commerce business, according to sources familiar with the matter and several Chinese media outlets and social networks, including Nanduwan Finance, Finance China and Jiemian News.

Mondelēz China confirmed campaign A statement said an investigation was ongoing, but no specific details were given. A spokesperson said: “Mondelēz China adheres to high compliance standards. For this reason, Mondelēz China has reported a potential issue to the relevant authorities as parties outside of Mondelēz are involved. We are cooperating with the authorities and the employees concerned have been placed on leave pending the results of the investigation.”

The executives named by several of the above media and sources are said to be Grace Zhu (Zhu Yijing), Vice President of Marketing and Development at Mondelēz Greater China, and Simon Xiu (Xiu Zerong), Director of E-Commerce at Mondelēz China. Both were reportedly “taken away” for questioning last Friday (July 26).

Mondelēz reportedly held an impromptu meeting to discuss the matter.

According to LinkedIn, Zhu joined Mondelēz China in May 2019 and was responsible for marketing, consumer insights, e-commerce and catering channels. She previously worked at Nielsen and PepsiCo. Meanwhile, Xiu, who has over 20 years of experience in the fast-moving consumer goods industry, is responsible for the e-commerce business at Mondelēz China.

In response to the question from campaign Mondelēz said it could not provide any further information on the names mentioned by other media outlets.

In addition, an unconfirmed WeChat screenshot posted on Friday by a purported industry source outlined a possible sequence of events – initially also naming Publicis as a party involved and claiming they had also been contacted by the company. However, a spokesperson for the Groupe denied in a statement to campaign.

“We deny our involvement in this matter and it is false that we have been contacted regarding this matter. Publicis Groupe China is currently handling media (excluding e-commerce) and creative content for selected brands.”

However, according to Mondelēz’s statement and the sources mentioned, there is still the possibility of involvement by other third-party companies that handle electronic commerce.

Mondelēz International is a leading global snack manufacturer and owns several well-known brands such as Cadbury, Milka Chocolate, Jacobs Coffee, LU Biscuits, Nabisco and Oreo Cookies, Tang and Trident Chewing Gum. In 2023, Mondelēz International reported global net sales of $36.02 billion, an increase of 14.35% year-on-year.

According to Jiemian News, sources told the newspaper that the investigation is allegedly related to issues related to “cost management” and “channel confusion” – which are common among large FMCG companies. The reports also say that the dominance of traditional channels such as canteens and corner shops, as well as high operational costs in China, can further exacerbate these problems and create opportunities for black money generation. These governance issues can be overlooked during growth phases, but often come to the fore during weaker periods.

China has recently cracked down on corruption and business misconduct, reflected in several high-profile cases. In January 2023, a senior marketing manager at Genki Forest was arrested on corruption charges, highlighting problems within the company’s management. Likewise, the GroupM scandal in October last year saw several executives arrested on bribery charges, bringing to light unethical practices in the media sector. Last month, the Financial Times Adidas has also investigated alleged large-scale bribery cases by its employees in China, which “could involve several million euros”. These incidents reflect the comprehensive efforts of the Chinese authorities to enforce stricter compliance and ethics standards in various industries.

More on this later in the story.