China’s Chocolate Market Grew Nearly 40 Percent From 2008-2012
Despite the steadily growing presence of upmarket European and North American chocolate makers such as Godiva, Leonidas, Debauve & Gallais, and Lindt, China has traditionally been — and remains — a difficult market. As Lawrence Allen wrote in his 2009 book Chocolate Fortunes, despite the inroads made by the “Big Five” chocolate brands (Cadbury, Hershey, Mars, Ferrero-Rocher, Nestlé) throughout the 1980s and ’90s in paving the way for higher-end producers, the Chinese chocolate market remains highly fragmented, geographically and culturally diverse, largely mass-market and low quality, and dogged by uneven infrastructure and distribution networks.
Though the market continues to register comparatively strong growth, particularly in top-tier cities — rising 40 percent from 2008-2012 — it lags behind other major global consumers in terms of per capita consumption, which sits at around 100 grams per year. As Euromonitor noted last November, this is 82 times less than the average German chocoholic, and lest observers think low chocolate consumption is an Asian phenomenon, Euromintor notes that Japan consumes 11 times more chocolate on a per capita basis than China.
Undaunted, major brands like Godiva have plans for continued expansion in China, with Godiva alone planning to have 50 locations in the country by the end of the year, up from its current 36 stores in 13 cities.
One of the main factors holding back a boom in high-end chocolate sales in China is the fact that high-priced consumables — unlike handbags or shoes — can’t be readily “shown off” in public. They’re good for gift-giving purposes, but unlike other premium-segment companies that have seen runaway success in China since the early ’90s, such as Haagen-Dazs, chocolate shops haven’t become “destinations” for the young and upwardly mobile. This week, the South China Morning Post delves into why this may be:
[28-year-old Tanis Liu] thinks this is because Chinese shoppers have little interest in quality chocolate. “Many buy famous brand bags, clothes or cosmetics mainly for showing off. Luxury chocolate cannot serve that purpose; it is not something they can wear for others to see,” he says.
Valrhona, a French luxury chocolate brand which prides itself on its 91 years of producing single-origin dark chocolate, arrived on the mainland in 2000. Pierre Tabarie, brand manager for Asia-Pacific, says business in China is growing but there has not been a boom. “It’s easier to buy a bag which you can show off,” he says. “Chocolate is more complex. It is not part of Chinese culture. It takes time for Chinese people to get it and like it.”
However, Tabarie does not agree that the Chinese have been slow to try chocolate. “This is a misconception. There is a lot of confectionery being sold in China, very sweet and mainly sugar and vegetable oil with little cocoa content,” he says. “But Chinese are slowly dipping into pure chocolate and will come to appreciate what is good.” Valrhona mainly supplies chefs at five-star hotels in Beijing and Shanghai, but plans to open a large retail space this year.
Essentially, it will take time for mainstream Chinese consumers to move from low-quality, low-priced domestic chocolate to more “advanced” premium brands. In this way, the chocolate market in China is quite similar to the country’s wine market. Plenty of high-end wine is being sold and given as gifts, but little is consumed at home, with buyers and gift recipients preferring to pop bottles at group dinners or company functions.