Chocolate Market in China

China’s Imported Chocolate Market

Now the China market has already become the engine for the global chocolate market. Its 30% annual growth and its large population have attracted chocolate marketers from all corners of the world. A profound understanding of the market, customers and the right marketing strategy is the key to penetrating the massive China chocolate market.

Chocolate in China

Status quo of Imported Chocolate market

Seen as an exotic food product, it has taken decades for Chinese people to accept chocolate. Now the Chinese market is ready for chocolate from the taste and the culture,
According to the data from Association of Chinese Chocolate Manufacturer, Chinese consumes 70 grams of chocolate per capita every year. This data is dwarfed by 2 kilos that of Japan and Korea, needless to say 7 kilos of one European. However, multiplied by 1.3 billion the size of the market which is ￥3.5 billion is a huge potential as well.

That also explains why the Chinese market can witness a 40% annual growth in 2008 when the global growth is only 10% and report from Bain estimates that the annual growth will stay around 11% in the next 5 years and it looks quite negative compared with that of 30% fromAC Nielsen report. No matter which one comes true, the huge potential of the market has been recognized by everybody. The huge population means a big potential to drive the chocolate business up when chocolate consumption per capita reaches 1 kilo.

So far, the top 20 chocolate makers have already presented in the market. In a common supermarket in Shanghai, you can easily find chocolate of over 70 brands. Most of them are foreign brands. The study on consumption habit of Chinese chocolate consumers also indicates that foreign brand chocolate is more popular in the market.

• 1% of the consumers prefer foreign brands
• only 22.2% like local brands more

And local companies still need time to improve this totally imported food product. As a result, about 90% of the market is occupied by foreign brands. The big four (biggest four companies in China chocolate market: Dove, Ferrero, Cadbury and Leconte) have taken over 70% of the market. Only Leconte is a local brand. Among the three foreign brands, only Dove has taken one-third of the market.

And these four brands have held the high class market. Then following brands such as UHA, Meiji and Lindt & Sprüngli take medium-to-high class chocolate market and the rest of the market is taken by local companies.
Good news for imported chocolate is that the new generation of consumers has much deeper understanding of chocolate including its taste, making process and culture. This trend will probably increase the daily consumption of chocolate which means the market will expand greatly.

Selling Points of Imported Chocolate

Why more and more Chinese become fans of chocolate, a foreign imported food product?
What are the factors to getting Chinese people buying chocolate ? A report shows that the No.1 factor Chinese consumers consider is the taste; following by brand (18%) and price (7%).

1. Taste

From the slogans of big foreign brands, we can see that taste is the key factor those big companies consider:

• Dove: 牛奶香浓，丝般感受(Sweet-smelling milk as silk tasting)
• Ferrero: 溶在口味，回味无穷(melt in mouth, a lasting flavor)
• Cadbury:顺滑(smooth)

It’s true that in China, taste is the most important factor, but compared to western consumers, Chinese consumers don’t care about the taste nearly as much. A report shows 66% western consumers put taste as the most important factor while only 30% consumers think it’s the most important factor.
With the deeper understanding of chocolate, Chinese consumers will consider more and more about the variety and the taste.

2. Brand

When chocolate came to China’s market, it was branded as an exotic food product which is an added extra value.
And now the brand has become even more important.

First of all, a big part of imported chocolates purchased in China are for gifts or ceremonial use like wedding candy.

For young Chinese men, chocolates, especially luxurious delicately packed chocolates have become a must to show their love to their girlfriends. During the Chinese Valentines’ Day this year, half of the top 10 items sold online were chocolates.
That’s why imported chocolates are sold as high class food product.

Apart from its decent look, imported chocolates also enjoys a fame of high class ingredients. With the growing concern for health and food safety, consumers are becoming more careful about the ingredients of chocolates and imported chocolate are trusted for containing more coco or milk.

3. Price

When chocolate first appeared in China, the price for a box of imported chocolates was sky-high. Today, chocolate has become a common food product that most people can afford. But some chocolate brands are still famous for their high price such as Ferrero because Ferrero targets on high class chocolate market where price is an important tool to show its value.
A Chinese consumer can easily find reasons to buy a box of imported chocolate for its taste, brand and price. And what chocolate makers need to do is to produce nice chocolate, promote its brand and label with a suitable price.

Branding

If you already have the products, why not sell them in China? But before that, you will need to know how Chinese think about the taste of your chocolate and build your brand first. To reach these two targets an integrated strategy of both online and offline marketing will be good.
As shown in a survey by China Internet Network Information Center (CNNIC), 85% of the interviewees choose Internet as their choice for information, following with TV 66.1%, then newspaper 61.1%.
For new comers in the Chinese chocolate market, online marketing and branding is a suitable strategy. It has the following four advantages:

1. cost efficiency
2. precise marketing
3. easy reputation control
4. feedback from the market.

There are mainly two ways to promote your chocolate in China online: Special designed website and SNS promotion

1. A website in Chinese

With a website in Chinese, you can

1. increase the popularity of your brand
2. influence consumers by content and design
3. create a company image

After creating a website for your chocolates, the promotion of it is also important. A good website without people visiting is a waste. To promote a website by SEO and SEM is the most popular solution now.

2. SNS promotion

Social Networking Service or Social Networking Sites (SNS) has become an important source for people to get information. Now half of the Chinese internet users have registered in Weibo (micro blog). As “2012 Corporate Weibo White Paper“by Sina and CIC introduces, there are about 5000 food products manufacturers opening accounts on Sina Weibo. Some of them have opened very professional Weibo accounts.

Other SNS sites like Douban where high educated Chinese are and RenRen (China Facebook) are also important.
The benefit of promoting your chocolates on SNS is that you can

1. get feedback about the taste, brand and price quickly from them;
2. build a community surround your company;
3. reach your target people precisely;
4. creating a more friendly company image;

and people accept information from SNS faster.

3. Community management

Besides its taste, the concept of chocolate culture has also been accepted by Chinese. Chocolate Salon has already been held three times in Shanghai and gained a lot chocolate fans and build a high-class image for this food product.

Question:

Chocolate has very high calorie，so women think that eating chocolate will make them fat，and it could not help them to keep in shape.

If you are the marketing manager which want to attract more women to eat chocolate，what do you think you need to adjust on the integrated marketing communications of chocolate？