During the last years, the Chinese ice cream market has grown tremendously and even surpassed the US market. This phenomenon is due to the growth of the domestic powerhouse. In 2016 the consumption volume reached 4.3 billion liters. Indeed, because the living standards of Chinese people rose, which means that they have a higher income level, they are willing to spend more money on leisure goods and express a singular interest in foreign desserts such as ice cream. This evolution is possible thanks to the improvement of retail infrastructure and capacities of the frozen food industry. Today if you want to launch your business of premium ice cream in China you will also have access to diversified distribution channels.
Chinese consumers increasing demand for Ice Cream
- The revenue in the Chinese Ice Cream segment reaches US$188m in 2019. The market is expected to grow annually by 3.7% (CAGR 2019-2023).
- In the market for Ice Cream, the volume is expected to amount to 38.9 kg by 2023.
- The average per capita consumption stands at 0.03 kg in 2019.
While starting your business, there are a few things you need to know about trends ‘consumption. Actually, consumers’ behavior has changed over the past years. According to Nestlé, the progress of the ice cream industry in China showed interesting trends. The first one concerns the need for refreshing and the interest in cold food which goes against their habit of drinking warm water. Indeed, in some cities during the summer the temperature can easily reach 30° C to 42°. The second one is their preference to taste different or original flavors. It goes without saying that traditional milk, chocolate, vanilla do not fulfill the Chinese middle-class customers’ expectations. Both new trends challenge companies to work on specific tastes and developing new products for the changing preferences of this category of the population.
Because China is the country with the higher number in the world of diabetes cases, more and more people are calling for healthy or low-fat diets. This lead to opportunities to create new ice cream premium health. Actually traditional ice cream might contain a lot of sugar and additives. In order to satisfy these customers, many manufacturers go back to natural ingredients. They are able to pay a price higher than the average for the good-tasting product which is better for their health.
Ice cream as a New Experience
Eating ice cream for Chinese people is also a way to get closer to western countries ‘lifestyles. They are willing to pay more, not just because the product Itself is good but because of this a way to show their high social status. In the same way, this consumption draws a change in Chinese people’s mindset because ice cream is associated with a pleasant time. Ice cream in western countries goes with a mood. You eat ice cream because you’re no feel good or on the contrary because you’re having a good time. Both have to deal with the notion of feelings which is not something current in the Chinese culture.
Häagen-Dazs can serve as an example of success
Before starting its Business, the brand did a deep research about the Chinese market, especially regarding distribution. They knew that their product needed a constant temperature of -26° C. Because, it’s complicated to respect that for Chinese distributors, the brand decided to manage it itself. Then they imported the products from the US and European factories, rather than calling local manufacturers. First and foremost, they noticed that during the winter, Chinese people stop carrying frozen desserts.
While European consumers prefer staying home to eat ice cream, Chinese people prefer to eat them in the retail environment. This is the reason why the brand decided to have its own shop to sell ice cream. And on the contrary, to retails in Europe, China’s ones were built and decorated as luxurious spaces. Of course, luxurious places go at a higher price, the symbol of great quality. Being an expensive brand is China is synonymous with luxury. Once again, it’s a question of image and perception by the others, in order to show that they belong to a certain social category.
You can also read our Strategic Guide to Export Food Brands in China
Ice cream Brand Launch Strategies
- Brand Value Proposition
Once you have established your Ice cream brand and what you are selling to your audience market, you have to convince the consumers of that market to make a purchase. The reason Chinese people buy your product is that they see the great value you are offering. You can offer a practical value linked to the quality of the product or perceived value, such as status from owning the brand. A good perceived value strategy is that they have an attractive design. The important point, you can emphasize your brand by showing how your brand differs from the products of competitors. You can also propose a reasonable price but with high quality to competing brands with a slogan telling customers that “they get premium quality without paying a premium price”.
- Picking A Brand Name: Naming Brand Marketing
In Marketing, the brand name is really important. For an Ice cream company, your brand name is an asset that can really help your brand make an impact. Picking the right name can be tricky but the best advice that we can give is to pick a name that matches your brand value and the worldview of your potential customers. Think ahead to how your brand name would be received.
- Creating a Brand Identity: E-Reputation
When you wonder how to start an Ice cream business online, the first thing that comes to mind is the brand identity of the brand. It’s important do not to ignore this part of your expansion as the look and feel of your brand will decide how it is perceived by your Chinese audience and ultimately to sales and revenue.
- Website & Online Store
After, all the previous steps, it is vital to invest in getting a professional website to be the face of your Ice cream brand. When your potential clients would visit your website make sure you present to them your best face. Design standards are high up in the clouds these days and people are easily turned off by bad design. This is even truer if you are trying to sell your ice cream products online. High-quality photos of your products represent a single point that can make or break your brand value. Make sure that your eCommerce store/website is hosting in China.
- Let’s talk about the Distribution
Like for all foreign products, thinking about distribution is the determinant for the success of your business. Sales at online brand stores such as official shopfronts at e-commerce giant T mall increased from 3% to 16 % between 2012 and 2017. Consumers in big cities enjoy eating packed ice cream as a snack during their leisure time. Consequently, thinking about the family format is essential.
- Social Media Setup & Strategies
As an Ice cream company, Chinese social media is your best friend. Without a well thought of social media strategy and implementation, you are literally wasting money. In fact, you will not be able to earn any significant sales without the power of Chinese social media propelling your website. Social media helps to generate traffic to your website and increase your brand engagement. Social media can help you quickly market your brand with relatively low budgets.
- Promotion & Marketing
As a Premium Ice cream brand and with limited budgets, your best bet is to focus on digital marketing to get the word out there. At the same time, also think of some innovative ideas for offline marketing.
In brief, you can’t simply launch your ice cream brand and expect people to come buying your premium brand, it will not work. Launching a premium ice cream brand in China requires creativity and a detailed strategy about distribution. It is also very important to think about your digital presence
GMA can help you to improve or start your business. If you would like to talk to me about your brand, contact us!
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