China, this gigantic market of 1.4 billion people is currently the biggest consumption market in the world. And while chocolate has become one of the main sources of snacking in Western societies, particularly appreciated by children, it’s currently a market in strong development in China for consumers whose tastes are changing.
On the first hand, this article will analyze the chocolate market opportunity in China and on a second hand, how can a brand perform in this market.
The Chocolate market in China.
When the chocolate was first introduced to the fledgling market in the 1980s, most of the Chinese people considered it as a foreign and exotic curiosity. Imported chocolate was a luxury product, and the expense was more justified for a gift than for self-consumption.
According to a recent survey, Chinese people were consuming an average of 100g of chocolate a year in the past. Nowadays it reaches almost 1kg a year. Consumption still far from the average consumption of Germans, which is close to 10kg per year. A fact that can be explained by the non-education of Chinese people toward chocolate. This is not something they’re used to.
In fact, it’s related to their food culture. Their culinary history was not based on saccharine desserts, focusing instead on balancing the five tastes: sour, sweet, bitter, spicy and salty. Also, traditional Chinese medicine recommends avoiding any excessive sugar consumption. Plus, Chinese don’t have the dessert culture as we would find in France. They mainly eat the main meal and stop there.
Chocolate in couple facts:
- Chocolate consumption per person rise from 100g/year to almost 1kg/year
- Chinese people are not custom to sugar consumption
- European products represent the high-quality product
- Chinese standard allows the sales of chocolate containing only 20% cocoa butter
- In 2015, the chocolate market was valued at 20 billion yuan
- The market is expected to grow to 40 billion Yuan by 2020
- Ferrero, the third-largest chocolate company in the world aims to double its sales revenue in China
About the Chinese consumer today, European chocolate represents high quality and high prices. And this attitude plays into the vanity that many Chinese people display when using high-end reputable foreign goods. Like red wine, perfume, which are given as gifts to new business contacts, as a way to build up a respectful, reciprocal relationship.
However, chocolate manufacturers are trying to lower the expectation toward chocolate, as it basically made for mass consumption, without giving Chinese customers a reason to incorporate their products into their daily consumption habits.
Also, the lack of domestic brands is due to their failure to meet international standards for real chocolate, such as a minimum of 35% cocoa butter. Indeed, Chinese standards permit the sale of chocolate containing just 20% cocoa butter, cocoa liquor, and other solids. They also allow the use of cornstarch, gluten substitute cocoa butter, vegetable oil, sugar, flavors, and other additives. Which explains the sweeter taste and waxier texture of Chinese chocolate.
Following all this, developing a new chocolate product to appeal to mass Chinese consumer is a wise move. However, manufacturers will have to go against market norms and promote their products on a cultural level before they will see success. Focusing on a cross-cultural dialogue on chocolate’s historical role in European Societies or promoting chocolate’s nutritional value.
Removing the European luxury tag and showing a willingness to adapt products will convince Chinese people that chocolate can be an everyday commodity.
Furthermore, according to the firm Ebrun, the chocolate market in China is expected to grow in value to 40 Billion yuan (US$6.2 billion) by 2020, following the young generations of Chinese turning more and more chocoholics. Whereas the sales of chocolate were valued at 20 billion yuan in 2015.
Biggest chocolate company in China:
- Mars Inc.: 40% market share in China
- Ferrero: 28% market share in China
- Hershey Co.
- Nestle SA
In China, every year in October happens a very famous event: the “mid-autumn festival”. During this one, people used to consume a large quantity of “mooncakes” which is a pastry usually filled with eggs yolk, red beans or meat for the most expensive ones. However, for a couple of years, a new trend appears in China’s biggest cities consisting in offering chocolate mooncakes. A luxury gift mostly available within Starbucks stores and Godiva stores (Belgium chocolate brand).
A new trend leading to a 5% growth of chocolate consumption during this period. On B2B market, it can even reach 15% growth per year.
Importance of Branding
In China, branding is everything. People are ready to buy ten times the price of a product for a branded one, compared to a non-branded product.
As you may know, China suffered from its “low-quality product” reputation but has also been seen for a long time as a counterfeit market. However, they’re trying hard to get rid of this reputation. From now, Chinese companies only want to develop a trusted business.
Why? Because consumers don’t want to be cheated anymore. They don’t want to buy an appealing product and realize later on the quality is very bad, or the product itself is harmful and non-healthy.
Also, before buying anything or establishing any business relationship, Chinese people are now checking online information about the company/product they may deal with. They’ll be looking for the company info to be sure the brand is real, but also online reviews and comments to know what previous consumer thought about your product.
Being visible and developing a strong reputation is a must-do in China.
A couple of Swiss chocolate brands, even though very reputed in Europe, are struggling to develop their business in China. They did not invest enough in their promotion and are now lacking visibility in the Chinese market. At the point that when Chinese people go to Europe, they prefer to buy chocolate from the UK or France rather than from Switzerland.
What process should be followed in China?
We’ll detail here two main steps for you to develop your e-reputation and therefore perform in the Chinese chocolate market.
Step 1: Develop your visibility.
As we told you, they don’t have access to our main media and social network. Also, they may have never heard about your company regardless of your international fame. And if you want them to cooperate with you, give them a chance to know who you are.
- Develop a new Website in Chine
Use a Chinese domain name, and build your design following cultural trend.
- Open a Weibo account
It corresponds to the Chinese version of Twitter. Extremely popular in China, it’s also a great tool to develop KOL strategy. Very useful if you plan to target a large audience and interact with your customers.
Step 2: Build your reputation.
You won’t get anything from them without showing that you’re already famous in China. So, we suggest here to pretend to be famous until you really are.
Remember that they’re afraid of fake companies and fake products. They don’t trust corporate communication. And the only way for them to be sure of your credibility is to see that other people purchased your product and are talking good about you.
And all this it goes through Chinese social media:
- WeChat: the “Chinese Facebook/WhatsApp”
A great messenger APP that gets a “moment” system allowing people to share content (messages, pictures, videos) and personal feedback. Moreover, people can use a “Group Chat” option to discuss divers’ problems and solutions, but also their favorite products and where can they get discounts. Although it’s not very efficient for advertisement, it’s a great tool for community management.
- Douyin: The Video King
A short video sharing app allowing you to generate content and spread it to a wild audience. More intuitive and fun than WeChat and Weibo, this app is also an amazing tool for KOL.
- Baidu: the Chinese Google
Having a Chinese website is good, but not enough. Before doing anything, Chinese people will check very carefully about your brand/product.
For example, a Chinese woman willing to buy baby products can check information online for 6 months before deciding anything.
So, here is a list of things to develop through Baidu, and strengthen your e-reputation:
- Baidu Zhidao & Zhihu: a good way to deliver information.
- Baidu Baike: it’s kind of the Chinese Wikipedia. And they trust it a lot here. So, we advise you to make up your own page.
- Forums: it’s important to develop your online presence. The more people talk about you, the better.
- PR: if you’re a good quality product consumed by a lot of people, then there should be articles about you. If not, it means you’re not worth it.
- Comments/reviews: Chinese people are always giving comments or reviews about what they bought. And you’ll need plenty of positive comments to convince distributors or potential customers.
The Sum up
To resume, the chocolate market is growing very fast. People tend to consume more and more chocolate every year. And if you want to maximize your chance of success while entering this market, don’t forget to:
- Make your brand visible
- Develop a strong reputation
If you have any questions about the chocolate market and how to develop your brand in China, feel free to contact us.
We are the GMA.
- Expert in Digital Marketing
- Lead Generations
- Professional in B2B E-commerce
But more than anything, we’re chocolate lovers.