A few decades ago, chocolate was seen as a luxury product. It was very common to find a person who had never eaten chocolate in his or her life before. However, during the last few years, the chocolate market exploded.
By 2025 the Chinese chocolate market is expected to reach 4.05 billion US dollars. On average a Chinese person eats less than 1 kilogram approximately per year which is very low compared to more than 10 kilos of Chocolate consumption in Europe. But this is still interesting considering the number of inhabitants which is estimated at 1.4 billion people.
In addition, because people are traveling more frequently they discover and try new products including chocolate. Once, they go back home, they want the same quality of chocolate in China as in Western countries. They also start treating chocolate as a perfect luxury gift, so the demand for high-end chocolate rises. And this is where our article comes in!
Introduction to The Chinese Chocolate Market
Chocolate, revered as the world’s favorite sweet treat, boasts a global industry projected to hit $160.9 billion by 2027.
In contrast, China’s chocolate market, which stood at USD 3.83 billion in 2023, is forecasted to expand to USD 4.85 billion by 2028, growing at a CAGR of 4.81% within the 2023-2028 period. While China’s consumption lags behind heavyweights like the U.S. and Switzerland, the nation’s burgeoning interest in this treat spells a lucrative opportunity, particularly for foreign chocolate brands.
It’s noteworthy that traditional chocolate consumption in China differs from the West. Rather than savoring it in its pure form, the Chinese have been integrating chocolate into other confections—think cakes infused with creamy milk chocolate, soft candies dotted with chocolate chips, biscuits, and sweet beverages.
The current trend in China’s chocolate palate leans toward cocoa and dark chocolate, reflecting the nation’s growing health consciousness and preference for less sugary alternatives. Market Watch research highlights this shift, noting a surge in cocoa beans to 64,127.70 tons in 2022, showcasing a CAGR of 6.60% in volume.
Why High-End Chocolate Can Be a Profitable Business in China?
To start with, competing with Chinese chocolate manufacturers remains a big challenge because they have lower production costs and also because they rely on the local network to get commodities such as milk, and sugar.
By the end of the process, they get very competitive pricing. Instead of that, it is better for a foreign company to understand, focus, and use its competitive advantages like foreign heritage and the quality of the product.
Indeed, the Chinese consumer views chocolate as a foreign exotic good, as they are not used to eating chocolate or desserts. However, as a foreign company, you must work hard on your image because each foreign company has the same level of recognition.
What Luxury and Status Mean in China
In China, luxury isn’t just about flaunting wealth—it’s deeply symbolic. Owning high-end products or indulging in premium experiences is not only a personal treat but also a marker of social standing. Brands that have historically succeeded in this market are those that have tapped into this cultural context. It’s not just about selling a product; it’s about selling a status, a story, and, above all, an experience.
Chocolate as Luxury Gifts
The high-end China chocolate market is fed by the Chinese middle-class consumer. They are looking for great chocolate, in other words, they want products to match their social status. Urban Chinese consumers show a desire to get closer to the Western lifestyle.
In this way, foreign brands are favored for several reasons. While talking about chocolate, this product is often linked with Belgium, Switzerland, or France. Consequently, a foreign brand has a given legitimacy.
They use chocolate and cocoa products as gifts for special occasions and such a gift shows their status, especially if it’s a high-end chocolate from a renowned and well-known brand in China. As a foreign products, it adds importance and prestige to the gift and shows the receiver your good intentions and status.
What Do You Need to Consider Before Entering the Chinese Market?
Before entering the Chinese chocolate market, you need to understand that you will be targeting a different set of customers, from what you are used to. Chinese people are just getting used to chocolate, but their tastes and preferences evolved in a specific way, adapted to local eating habits and food culture.
Adapting Flavors to Local Preferences
Chinese consumers enjoy different varieties of chocolate. So this is the opportunity to try different things. They like chocolate with blueberries, caramelized peanuts, cheese, green tea or sesame, guarana incense, rice, sheep’s milk soy, and wine. This represents a real opportunity to explore your creativity and show your talent apart from the fragrant milky taste.
By giving a new or original gustative experience, you have the opportunity to associate chocolate with feelings and emotions. You should seize this occasion to link chocolate with the notion of pleasure and rational need. Remember, a one-size-fits-all approach rarely works in such a diverse market.
The Power of Storytelling and Heritage
Every brand has a story, and in China, where history and heritage play a significant role, leveraging this can be a game-changer. It’s not just about promoting a product but connecting it to a larger narrative. Whether it’s the origin of the ingredients, the brand’s journey, or its craftsmanship, a story well-told can captivate and engage the Chinese consumer.
Packaging as a Reflection of Quality and Luxury
The main part of imported chocolate is that it is often purchased and offered as gifs or used on ceremonial occasions such as wedding candy. This means that you should pay attention to your packaging. As for all goods in China especially luxury goods, it’s really important to care about the aspect of the product. It is even more important than taste.
A product’s packaging isn’t just a protective shell but a representation of its quality, luxury, and the status it bestows upon its owner.
Nowadays, young Chinese men take the example of Western men by showing their love to their girlfriends by offering them luxury-packed chocolate. This is a very common habit reflecting the modern Chinese person. Last year on Valentine’s Day, chocolate was among the 10 top items sold online.
Ensuring Trust with Certifications and Quality Assurances
Today, there is a rise in awareness of food safety and health. So people look at the ingredients contained in the products they buy. As a foreign company, you are believed to be more authentic. In other words, Chinese people trust foreign brand chocolate because they think that the product contains more milk or cocoa.
Having the right certifications and transparent quality assurances can significantly enhance a brand’s credibility. For foreign brands, this is especially vital as it helps build and maintain trust in an unfamiliar market.
Pricing Strategy: Striking the Right Balance
When chocolate appeared in China, it was like a privilege that only a few people could afford. It was way too expensive for most people. However, because China opened its economy to the world, importation grew and chocolate became a common food product.
Nevertheless, some of the chocolate brands are famous such as Ferrero because of its high price. In luxury, an industry price is always a tool of distinction because the notion of privilege is a part of luxury. Hence, if a brand wants to appear valued, it has to be expensive to match the expectations of a certain social category.
How to Promote and Sell High-End Chocolate in the Chinese Market?
Marketing and promoting products in China requires a blend of traditional strategies and innovative approaches. Brands that can skillfully navigate this balance stand to reap significant rewards in this dynamic market.
Focus on Local Festivals and Hot Times Promotion
China’s calendar is rich with holidays and festivals that offer unique marketing opportunities. Celebrations like the Lunar New Year and the Mid-Autumn Festival aren’t just holidays; they’re cultural phenomena. You also can’t forget events like Qixi, which is China’s Valentine’s Day, 520 (another Valentine), or the wedding and graduation season.
For brands entering the Chinese chocolate industry, this means an opportunity to create special edition products, promotions, or advertising campaigns that resonate deeply with local sentiments, traditions, and Chinese culture.
Collaborate with Influencers and Local Brands
In China, KOLs (Key Opinion Leaders) and influencers carry a lot of weight in shaping consumer opinions. Collaborating with these individuals, who have cultivated trust and admiration among massive audiences, can significantly amplify a brand’s reach and credibility. It’s not just about endorsement; it’s about crafting genuine partnerships that align with both the brand and the influencer’s ethos.
Engage on Chinese Social Media Platforms
The social media scene in China is distinct, with platforms like WeChat, Weibo, Douyin, and Xiaohongshu holding the reins.
Often dubbed the ‘app for everything,’ WeChat is more than just a messaging app. With its ‘Moments‘ feature, brands can post updates, much like Facebook’s timeline. Its ‘Official Accounts‘ allow brands to push feeds to subscribers, engage in CRM activities, and even set up e-shops. The key is to create engaging, shareable content and leverage WeChat Pay for seamless transactions.
China’s answer to Twitter, Weibo is a microblogging site perfect for quick updates, announcements, and influencer collaborations. Its advertising platform offers targeted ad placements, making it easier for brands to reach their desired demographic.
As a video-centric platform, Douyin is perfect for product demos, brand stories, and challenges. The platform offers in-video shopping links, making it possible for viewers to buy products directly from videos.
Xiaohongshu (Little Red Book)
Primarily a social e-commerce platform, Xiaohongshu is where users share product reviews and shopping tips. Brands can harness user-generated content, collaborate with influencers for reviews, and utilize its advertising tools for greater visibility.
When navigating these platforms, brands need to remember that content is king. Localization, understanding cultural nuances, and being responsive can make a significant difference in a brand’s social media success in China.
Immersive Experiences with Events and Pop-Ups
Tasting events, pop-up stores, and collaborations with other luxury brands can provide consumers with a tangible experience of the product. It allows brands to showcase their offerings in a controlled environment, often leading to immediate conversions and long-term brand loyalty.
The Might of Online Retail Giants
The e-commerce ecosystem in China is diverse and robust, with platforms catering to various market segments and consumer behaviors.
Catering primarily to established brands, Tmall allows businesses to set up flagship stores, participate in mega shopping festivals like ‘Singles Day‘, and harness Alibaba’s powerful data analytics tools for targeted marketing campaigns.
This is more of a C2C platform, but many small businesses also utilize it. Taobao thrives on user-generated content, livestreams, and community interactions. Chocolate makers, especially new entrants in the chocolate market in China, can leverage Taobao’s vast reach and its influencer collaborations for market penetration.
Recognized for its comprehensive logistics network, JD.com guarantees timely deliveries even in China’s more remote regions. Their ‘JD Luxury Express‘ service provides a luxury delivery experience for premium chocolate products. Brands can also use JD.com’s advertising and partnership avenues to enhance visibility and gain bigger chocolate sales.
Known for its group-buying model, Pinduoduo has quickly risen as a formidable player in the e-commerce space. It’s a platform that emphasizes social shopping, where users collaborate to get bulk purchase discounts. Brands can capitalize on this unique model by offering deals that encourage group purchases and sharing on social platforms.
To achieve e-commerce success in China, it’s pivotal for brands to ensure an optimal user experience. This involves smooth navigation, effective customer service, product authenticity guarantees, and leveraging innovations like livestream sales or integrating social sharing capabilities. By doing so, brands can ensure they resonate well with the diverse and dynamic Chinese online shopper.
Physical Boutiques and Experience Stores
Despite the digital boom, brick-and-mortar stores, especially high-end boutiques and experiential stores, still have significant sway in China. A physical store is not just a point of sale but a brand ambassador — offering consumers a tangible feel of the brand’s ethos, quality, and luxury. It’s where the digital and physical worlds of branding converge, creating lasting impressions.
Consumers can experience consuming chocolate from renowned brands, like different types of Belgian chocolate, suitable for Chinese tastes, while also enjoying the immersive experience offered by the store.
Ferrero in China: A Case Study
Ferrero, the Italian confectionery giant behind brands such as Ferrero Rocher, Kinder, and Tic Tac, ventured into the Chinese market seeking to tap into its vast consumer base. Here’s a look at how Ferrero navigated the complexities of the Chinese market and solidified its presence.
Market Entry and Initial Challenges
The taste of hazelnut, a core ingredient in Ferrero Rocher, was not widely familiar to many Chinese consumers. Additionally, Ferrero’s premium pricing strategy stood in contrast to a market dominated by more affordable domestic alternatives.
To better appeal to Chinese consumers, Ferrero introduced product variations catering to local tastes. Examples included introducing flavors like coconut and lychee, which were well-received.
Further, Ferrero’s chocolates, particularly those with gold wrappers, became popular gifts during the Lunar New Year. This was a strategic move to resonate with the Chinese cultural association of gold with luck and prosperity.
Marketing and Branding Efforts
Ferrero positioned its Rocher line as a luxury brand in the Chinese market. With its premium packaging and the emphasis on the unique hazelnut flavor, it became a sought-after gift item, especially during festivals.
Ferrero also recognized the power of digital marketing in China and actively engaged users on platforms like WeChat and Weibo. Their campaigns often revolved around festive seasons, influencer collaborations, and seamless e-commerce integrations for direct sales.
Collaborations and Expansions
Ferrero ensured its products were accessible by partnering with major retailers. This collaboration guaranteed the availability of Ferrero products everywhere, from upscale department stores to everyday local supermarkets.
In tandem with its physical retail strategy, Ferrero also tapped into the e-commerce boom in China. They ensured their products were listed on major platforms like Tmall, JD.com, and Pinduoduo.
Results and Current Position
Today, Ferrero stands as a prominent confectionery brand in China. Strategic localization, combined with its global brand equity, has allowed it to secure a considerable share of the Chinese chocolate market.
Sales figures suggest a consistent growth trajectory for Ferrero in China, especially during the festive seasons. Effective marketing campaigns and distinct product positioning have made Ferrero Rocher synonymous with luxury gifting in numerous Chinese households.
Boost Your Brand in China with Gentlemen Marketing Agency
Navigating the vast and intricate Chinese market can be challenging, but with the right partner, your brand can achieve unprecedented success.
Gentlemen Marketing Agency stands as a testament to this possibility. We’ve partnered with global giants, including Ferrero, to help them make a significant mark in China. Our collaboration with Ferrero is just one example of how we leverage our deep understanding of Chinese consumer behavior, digital landscape, and cultural nuances to formulate effective strategies tailored to our clients’ needs.
What Sets Us Apart?
- Deep Market Insight: Our team is well-versed with the Chinese market’s intricacies, understanding its ever-evolving trends, and staying updated with regulatory changes.
- Digital Expertise: From WeChat to Douyin, from Tmall to Pinduoduo, we know where your audience is and how to engage them effectively.
- Strategic Collaborations: Our extensive network in China allows us to forge strategic partnerships, ensuring your brand gets the visibility it deserves.
- Tailored Campaigns: We believe every brand is unique, and our campaigns reflect this belief. They’re tailored to resonate with your target demographic, ensuring maximum impact.
If you’re seeking to expand your footprint in China or just starting out, our team is here to guide, strategize, and execute. Together, we can script your success story in the Chinese market. Contact us today!