By the start of 2017, the top five international players (Mars, Ferrero, Nestlé, Hershey and Mondelēz) already accounted for a 66% share of China’s chocolate confectionery value sales, the market data provider said.
Key brands drive Mars’ growth
Euromonitor said Mars primarily benefits from its balanced brand portfolio of multiple well-established brands, including Dove, M&M’s, Snickers and Maltesers, and the company managed to maintain its lead in the category with various product lines targeting different consumer groups.
However, “challenged by the shift of consumers to more premium products, Mars, whose brands are mainly positioned within the low/mid-priced range, lost half of a percentage point of value share in 2017,” Euromonitor said.
The data indicated that, in 2013, Mars’ market share was 41.1%, and it decreased to 39.9% in 2014. In 2015 and 2016, the company’s shares in China were 38.2% and 27.2% respectively before dropping to the current share.
“Despite this slight share loss, Mars’ retail value sales saw slow growth in 2017, primarily derived from the expansion of M&M’s and Snickers, and the gradual sales recovery of Dove in this year,” Euromonitor added.
In April 2016, Snickers launched an advertising campaign featuring Chinese boy band, TF Boys, to “re-energize its sales,” and the brand reached more than CNY 1.1m ($0.17m) in two days, according to Euromonitor.
Snickers’ market share in China’s overall chocolate confectionery market currently stands at 5.7% in 2017 (same as in 2016), putting it on a par with Ferrero Rocher, data showed.
Godiva capitalizes premium trend
The average unit price of chocolate confectionery continued to climb in 2017 in China, with growth of 4%, responding to the increasingly noticeable premiumization trend, Euromonitor said.
Riding the momentum of this trend, Godiva registered the strongest sales growth in 2017, with a growth rate of 193%, to reach CNY 308m ($46.89m), the market research firm said.
“Godiva, renowned for its premium artisanal chocolate products, as well as exquisite gifting boxes packaged in seasonal editions” mainly relies on its directly-owned stores for distribution, Euromonitor added.
Godiva’s market share has reached 1.5% in 2017, increasing from 0.5% in 2016, the data showed. The only domestic company that takes up a larger portion of the Chinese chocolate market than Godiva is Fujian Yake Food (1.7%).
Market outlook
China’s chocolate confectionery sees a 2% retail volume decline and a 2% current value increase in 2017, to reach 124,838 tons and CNY 20.2bn ($3.08bn), Euromonitor said.
The category is expected to see a retail volume CAGR of 4% and a value CAGR of 5% at constant 2017 prices in the forecast period, with sales reaching CNY 26.1bn ($3.97bn) and 149,715 tons in 2022, Euromonitor predicted.
“Sales of better-for-you products, such as reduced sugar chocolate or functional products, as represented by chocolate containing probiotics, are predicted to grow robustly over the forecast period,” Euromonitor said.