China's Chocolate Wars

Competition, and innovation, continues for brands hoping to get a share of the huge Chinese market for chocolate.

December 12, 2014

NEW YORK –  Although Chinese consumers have traditionally preferred salty snacks to sweet ones, the world's chocolate makers have been making converts — and competing fiercely for market share — in the high-stakes market that's home to 1.37 billion people, says a recent article in Ad Age. The local chocolate market has been growing 12% annually, according to Euromonitor International, and China's embrace of chocolate has helped push up cocoa prices and contributed to fears of an international shortage.

Meanwhile, Western brands have upped the ante in China by building factories and innovation centers, launching flashy campaigns, buying local chocolate makers and creating over-the-top retail experiences.

So far, Mars appears to have come out ahead, says Ad Age, with a projected 39% of the Chinese market in 2014, according to Euromonitor. Its biggest hit is the Dove brand, which accounts for approximately 34% of national chocolate consumption.

Hershey, which opened an Asia innovation center in Shanghai, has been working on products that appeal to the Chinese market. It also launched a global brand, Lancaster, in China. The company had a hit with bite-size Kisses while others were selling 60- or even 80-gram bars, because Chinese people tend not to eat large quantities of chocolate in one sitting.

In general, the Chinese chocolate business is concentrated around holidays, and Chinese New Year is the biggie, when brands' gold-covered gift boxes come out. But the ultimate idea is to make chocolate more a part of everyday life, since it's not yet a top-of-mind snack in the region.

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