Chocolate Companies Breaking Into The New Market of China

It seems as if China headlines different news station every day. This popularization of China translates across all industries, even the chocolate industry! Chocolate companies see great economic potential from the sheer population size of China. However, gaining a billion people as loyal chocolate consumers is not simple in the least bit. Understanding that Chinese consumers are culturally different than Western consumers, chocolate companies abandoned strategies of the past and have consciously pushed a different strategy in China that particularly focuses the idea of gifting chocolate.

China currently has a population of around 1 billion people. Although the country of China has over 150 times the number of people as the country of Switzerland, around equal amounts of chocolate are sold in the countries. This indicates that the per capita consumption of China, along with other developing nations, is significantly lower than the per capita consumption of vastly smaller nations (Nieburg). This is not a secret fact. Chocolate companies know about this discrepancy and are working to bring chocolate to the masses! This shows the shift in ambitions of the Chocolate companies. What used to be predominantly a Western treat may very well become ubiquitous globally! Screen Shot 2015-03-13 at 3.09.59 PM Screen Shot 2015-03-13 at 3.10.12 PM

Although the market of China is huge compared to other states, we know very well from technology companies that ideas do not necessarily translate over seas. For instance, we have Google, China has Baidu; we have Amazon, China has Alibaba. Although functionally these companies share quite the number of features, the companies are starkly different in that the companies in China are founded by Chinese individuals. This begs the question: what can chocolate companies do to circumnavigate this dilemma? We all know that chocolate was popularized by the West and the majority of companies were founded in the West. Can Western companies, such as Nestle and Hershey’s, break into the untapped Chinese chocolate market? Or will be see the Chinese equivalent of these Western brands as we have seen with Google and Amazon?

Although I believe that Allen takes an aggressive stance that holds China as “still [living], figuratively speaking, in the nineteenth century,” he does hold certain valid concerns (10). Specifically, Allen indicates that “chocolate is so foreign that it would have limited appeal to their untrained palates” (10). These are not trivial concerns. Many differences in culture and understanding can be seen in the video below. However, the market is ripe. China currently is seeing an evolution of the retail sector and may be the perfect opportunity for these chocolate companies to enter (China Business Review).

These difference are rooted in the long historical and cultural contexts of the nation. For instance, China has “cultural DNA that evolved from Confucian philosophy,” a belief system rooted in the idea of giving (there are many Asian customs involved with gifting). Furthermore, from my experiences living in Asia, I’ve noticed that people in Asia, and China specifically, are more focused on outwardly showing ties to other individuals. For instance, it is not uncommon to see couples wear the exact same outfits. I believe this hints as to why chocolate companies have taken the strategy of marketing chocolate as a gift. Allen goes into this further as he explains that “gift giving plays an important role as a social facilitator, especially in business” (25). He describes these gift-giving traditions as “fairly complex and chiefly governed by the so-called face factor” (25). Because of these cultural differences, chocolate companies have evolved their marketing campaigns to encompass these new consumers. The videos below show the difference between an ad run in the West and one run in China. The West video focuses on self-indulgence why the Chinese video focuses on relationships.

The Western Advertisement

The Chinese Advertisement

Chocolate companies have had a long history in Western countries. With developing countries serving as new markets, these chocolate countries have shifted focus in becoming a more global product. There are many obstacles that may prevent quick market penetration, but with good business acumen these chocolate companies can successfully introduce chocolate to countries like China!

 Works Cited

Aleksandr Kalomiec. “Dove, Chocolate, China TV commerical Ad”. Video clip. 20 Jan 2014. https://www.youtube.com/watch?v=eavBWhVLn30

Allen, Lawrence. 2010. Chocolate Fortunes: the Battle for the Hearts, Minds, and Wallets of China’s Consumers. pp. 1-39, 201-224.

Allen, Lawrence. China Business Review. 1 July 2011. http://www.chinabusinessreview.com/chocolate-fortunes/

Dave Preece. “Dove Chocolate commercial – Senses”. Video clip. 6 May 2013. https://www.youtube.com/watch?v=SwPwQ4S4op8

Edmond Niu. “Best Way to Understand the difference between U.S. and China”. Video clip. 16 May 2014. https://www.youtube.com/watch?v=P3lMmkYyPLk

Nieburg, Oliver. Interactive Map: Top 20 Chocolate Consuming Nations of 2012. 30 July 2013. http://www.confectionerynews.com/Markets/Interactive-Map-Top-20-chocolate-consuming-nations-of-2012

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