Other BriefingsChina’s Chocolate Market – Trends and Industry Overview
China’s chocolate market is set to make a healthy recovery following the impact of the COVID-19 pandemic. In this article, we look at the latest data on China’s chocolate industry and discuss the new consumption habits influencing the market.
As one of the most consumed and beloved desserts worldwide, chocolate is expected to drive the global industry to US$160.9 billion by 2027. While China trails behind countries like the U.S. and Switzerland in chocolate consumption, demand has been steadily increasing in recent years. This growing interest is largely thanks to foreign brands expanding their presence in China, which has helped democratize chocolate consumption in a market where it was previously uncommon.
Traditionally, Chinese cuisine does not emphasize sweet flavors in the same way Western cultures do. Despite this cultural difference, however, Chinese consumer preferences have transformed significantly due to globalization, rising disposable incomes, and a growing middle class. This shift has led to a greater appreciation for a wider variety of goods that were previously considered rare or luxury items, including chocolate, which is now widely enjoyed across different segments of the population.
Due to these evolving dynamics, China’s chocolate industry presents a substantial opportunity for international brands looking to expand. The market features a diverse range of products, from premium Belgian chocolates crafted by skilled chocolatiers to mass-market chocolate items.
Despite its growth, the industry remains fragmented, with multinationals coexisting alongside smaller niche enterprises, creating an environment ripe for innovation and competition. Amidst the whirlwind of social media microtrends, several key long-term trends are emerging, presenting new opportunities for companies.
In this article, we provide an overview of China’s chocolate market, examining the latest trade figures and trends that will shape the industry in the years to come.
China’s chocolate market overview
The pandemic affected China’s chocolate market more severely than other sectors, with sales declining by 9 percent in 2020, as reported by Euromonitor. This decline was mainly due to the COVID-19 prevention and control measures, which disrupted the Chinese New Year gifting season. With limited social interactions and no events to attend, consumers were less inclined to purchase chocolate for gifts.
However, this downturn was short-lived. After the lockdown measures were lifted and the pandemic subsided, the chocolate market rebounded, achieving stable growth already by the end of 2021. Positive trends have continued over the following two years, leading industry analysts to remain optimistic about the market’s future.
According to data from Statista Market Insights, China’s chocolate market reached a total value of US$3.65 billion in 2023, a slight increase of 0.6 percentage points from 2022, and is estimated to reach US$4.76 billion by 2030, growing at a CAGR of 4.52 percent during the forecast period (2024-2030).
Import and export dynamics
China has seen notable fluctuations in the import volumes of chocolate and other cocoa-containing foods, largely influenced by shifts in downstream market demand in recent years. In 2021, imports reached a historical high of US$673.29 million, but in 2022, this figure notably decreased due to the impact of the pandemic on global supply chains. During the first half of 2023, China imported chocolate and other cocoa-containing foods worth US$211.235 million, while exports amounted to US$138.078 million.
The main import sources include Belgium, Italy, Switzerland, Malaysia, the United States, Singapore, Russia, Japan, Germany, and Turkey.
On the other hand, China primarily exports these products to Hong Kong, South Korea, the Philippines, Malaysia, Thailand, the United States, Indonesia, Japan, Saudi Arabia, and New Zealand.
Competitive landscape
China’s chocolate industry exhibits relatively low market concentration, albeit a few multinational corporations command a significant market presence.
Among the key players are renowned multinational brands like Mars, Ferrero, Cadbury, Hershey’s, and Nestlé, which dominate a considerable portion of the market. Mars, holding the lion’s share at approximately 40 percent, has witnessed enduring popularity among Chinese consumers over recent decades, followed closely by Ferrero with 28 percent.
Mars has secured its position as the leading player in the Chinese chocolate market through a combination of factors. With an extensive array of chocolate products tailored to diverse consumer preferences, Mars effectively targets various segments of the market, capturing a significant share of demand. Additionally, the brand has established a robust distribution network spanning urban and rural areas, ensuring widespread availability through supermarkets, convenience stores, and online platforms.
It is noteworthy that foreign chocolate brands claim a substantial 70 percent share of the Chinese chocolate market. This underscores the immense potential that China’s chocolate market offers for international enterprises, particularly as Western confectionery gains traction among Chinese urbanites, notably in bigger cities such as Shanghai and Beijing.
The growing demand is drawing the attention of foreign chocolatiers towards the Chinese market. In August 2023, Ferrero Group, the renowned Italian chocolate and confectionery manufacturer, made headlines by appointing Zhang Suyi as the company’s general manager in China. Zhang’s appointment is noteworthy as he is the first Chinese head since Ferrero’s inception in the Chinese market.
Domestic brands, on the other hand, such as the Chinese brand Leconte (acquired by Hollygee in 2016), contribute to the remaining 30 percent of the market share.
Retail dynamics
The retailing landscape of China’s chocolate market is predominantly shaped by supermarkets, hypermarkets, and convenience stores, which together hold a significant share of chocolate sales. This dominance is attributed to the wide availability of chocolate products and attractive discount offers.
According to a study conducted by Mordor Intelligence, in 2023, the overall retailing segment in China grew by 3.92 percent compared to the previous year, driven by consumers’ increasing preference for convenient shopping options. This trend is expected to continue, with the retailing sector projected to achieve a 4.64 percent growth in volume by 2026.
Convenience stores, including well-known chains like Easy Joy, Meiyijia, and uSmile, constituted the largest retailing unit by volume in 2023. Supermarkets and hypermarkets, the second-largest retail units, are also crucial players in the chocolate market. These stores offer a broad range of chocolate products and frequently provide innovative deals to attract customers. In 2022, chocolate sales in supermarkets and hypermarkets increased by 4.22 percent and are expected to grow at a 19.7 percent CAGR between 2026 and 2028.
Online retailing, or e-commerce, represents the fastest-growing segment in China’s chocolate retail market. In 2023, e-commerce achieved a CAGR of 5.92 percent, spurred by the convenience of home shopping and 24/7 product availability. The rapid expansion of internet users further accelerates this growth, positioning e-commerce as a significant driver of the chocolate retail market in China.
Chinese consumer behavior and preferences
When it comes to purchasing chocolate, Chinese consumers are influenced by several factors, including health considerations, pricing, and brand familiarity.
Concerns about the high-calorie content of chocolate are significant among Chinese consumers, with approximately 30 percent expressing worries about weight gain. Educating consumers about chocolate’s health benefits and nutritional aspects could address these concerns and potentially boost sales. Promoting scientific research on chocolate’s health benefits may be particularly effective in alleviating these worries.
Pricing is also a critical factor, as about 15 percent of Chinese consumers perceive imported chocolate as expensive. Implementing appropriate pricing and sales strategies could make imported chocolates more accessible and appealing to a broader audience.
Over the years, Chinese consumers have become familiar with chocolate products from various countries. Swiss chocolate has been popular since the 1980s, followed by recognition for chocolates from Germany and Russia. More recently, Belgian chocolate has gained popularity, driven by increased travel to Europe. Chinese travelers have brought back their experiences and knowledge of Belgian chocolate, which is highly regarded globally. This trend mirrors the success observed with Belgian beers in the Chinese market.
Furthermore, chocolate consumption in China peaks during special occasions, such as Chinese New Year, Qixi Festival, Valentine’s Day, and weddings. Product attributes like packaging and nutritional content play significant roles in influencing consumer purchases during these events.
Emerging trends in China’s chocolate market: Indulgence, health, and innovation
The Chinese chocolate market is undergoing a dynamic shift, driven by evolving consumer preferences that prioritize indulgence, health, and creativity. A recent study on consumer preferences for 2024 highlights significant trends, revealing a landscape where high-quality, premium chocolates and innovative products are gaining popularity.
Sustained demand for premium chocolate
Despite recent price increases, the demand for high-quality, premium chocolates among Chinese consumers remains strong, indicating that luxury chocolate products continue to be a sought-after indulgence, even amidst economic fluctuations.
One prime example of this trend is the success of Ferrero Rocher in the Chinese market. The brand’s popularity can be attributed to its distinctive gold packaging, which holds significant cultural symbolism representing fortune in Chinese tradition. While weddings traditionally featured the distribution of hard candy and jellied fruits as symbols of sweetness and prosperity, the inclusion of chocolate, particularly Ferrero Rocher, in wedding candy packages has become increasingly prevalent among young couples. As a result, a significant portion of Ferrero Rocher sales in China—more than 15 percent—are driven by wedding gifts.
Furthermore, Ferrero Rocher and other products from the Ferrero company have transitioned beyond special occasions to become a staple in the daily lives of many Chinese consumers, particularly those residing in major urban centers like Shanghai and Guangzhou. The brand has earned a strong reputation for delivering premium quality and indulgent treats, solidifying its presence in the market.
However, despite the traditional association of weddings with driving sales in this market segment, the industry has faced challenges in recent times due to factors such as the COVID-19 pandemic and shifting demographics, including lower birth rates and delayed marriages. In response to these challenges, brands are exploring alternative strategies to tap into this market segment. One notable approach involves integrating gourmet chocolate into a diverse range of products, including baked goods, ice cream, and beverages, thus appealing to a broader consumer base beyond the confines of special occasions.
For instance, Chinese brand Milk Dog launched a premium drink using Barry Callebaut’s gourmet chocolate ingredient, Callebaut 823, which contains about 10-times more Belgian chocolate than similar drinks on the market. Callebaut is also collaborating with online brand Amova, which is transitioning to include 100 percent Belgian and Swiss chocolate in its products.
Desire for innovative chocolate-related experiences and flavors
Innovation is a driving force in the Chinese chocolate market, with consumers eagerly seeking new and exciting experiences. A recent study revealed that the vast majority of Chinese consumers are keen to explore novel chocolate offerings, with many expressing a preference for chocolates with diverse textures, highlighting their appetite for unique sensory experiences.
Chocolate producers are responding to these preferences by introducing creative and diverse product offerings. For instance, some brands are experimenting with unconventional ingredients and flavor combinations to captivate consumers’ interest. Take, for example, a local chocolatier that infuses traditional Chinese spices like Sichuan pepper into its chocolates, offering a distinctive and memorable taste experience.
The desire for exclusivity is another driving factor in consumer preferences. Chinese consumers are drawn to limited-edition chocolates with unique flavors and textures, which evoke a sense of luxury and excitement.
Health-conscious indulgence
Offering chocolates that are pleasantly sweet but not overly so is the pathway to appealing to the broader consumer base in China. While the allure of chocolate remains strong, consumers are increasingly seeking options that align with their desire for both enjoyment and well-being.
Sweetness plays a crucial role in this dynamic. While many consumers still prefer chocolates with a moderate level of sweetness, there’s a growing interest in dark chocolate, driven by its perceived health benefits. This trend is particularly pronounced among younger demographics, who are more inclined towards reduced sugar options.
However, it’s not just about sweetness; it’s about the holistic experience. Consumers now view chocolate as more than just a treat; they see it as a product that should not only taste good but also contribute positively to their health and the environment.
This shift towards health-conscious indulgence extends beyond mere taste preferences. There’s a rising demand for chocolates with functional benefits, especially those that support mental well-being. Consumers are actively seeking out products that offer more than just a momentary indulgence but rather contribute positively to their overall health and happiness.
Furthermore, the quest for natural ingredients is driving interest in vegan and plant-based chocolate options. This reflects a broader societal shift towards sustainability and health-conscious living, where consumers are increasingly mindful of the ingredients they consume and their impact on both personal health and the environment.
In essence, the Chinese chocolate market is witnessing a transformation where indulgence and health converge. As consumers become more discerning and conscious of their choices, brands that can offer both delicious taste experiences and positive health attributes are poised to thrive in this evolving landscape.
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Dezan Shira & Associates assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Haikou, Zhongshan, Shenzhen, and Hong Kong. We also have offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Dubai (UAE) and partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh, and Australia. For assistance in China, please contact the firm at china@dezshira.com or visit our website at www.dezshira.com.
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