Mainland China's Chocolate And Cocoa Confectionery Industry And Competitive Landscape 2023

Updated: January 04, 2024

Industry Landscape

In 2022, Mainland China's imports of chocolate and confectionery containing cocoa (HS code 1806) amounted to USD 575 million (down 14.5% YoY), outpacing exports which amounted to USD 402.7 million (up less than 1% YoY). By volume, imports amounted to 98.8 million kilograms (down 31% YoY) outpacing exports which amounted to 69 million kilograms (up less than 1% YoY).

At just 70 grams per person, China's chocolate consumption per capita lags neghbors like South Korea (700 grams per capita) reflecting considerable growth potential as incomes rise; China's per capita incomes on a PPP basis have grown at a relatively high CAGR of more 8% over the five year period between 2017-2022.

China is a net importer of key raw materials for chocolate production i.e., cocoa powder (HS code 1805), cocoa butter (HS code 1804), cocoa paste (HS code 1803), and cocoa beans (HS code 1801).

Certain local governments have an encouraging stance towards the country's chocolate industry. In an effort to retake its position as China's major chocolate production township, Tianjin's Taiping township plans to upgrade and optimize industrial chains and set up chocolate-themed scenery spots. Meanwhile the Chinese province of Hainan which began exporting premium cocoa beans for the first time in 2021, began taking steps in 2022 to increase supply of first-grade cocoa to the world market. In September 2023, it was reported that a chocolate brand owned by a subsidiary of the Institute of Flavors and Beverages of the Chinese Academy of Tropical Agricultural Sciences successfully obtained EU trademark registration which would allow local chocolate brands to explore overseas markets. Hainan province expects local chocolate sales to exceed CNY 50 million in 2023.

Increasing obesity and diabetes burden opens potential opportunities in the sugar-free chocolate segment. Nearly 51% of Chinese adults are overweight and nearly 17% of them are obese according to The Dietary Guidelines for Chinese Residents 2022 released by the Chinese Nutrition Society. Meanwhile diabetes prevalence is on the rise in China and projected to continue increasing over the coming years. China's increasing disease burden and the resulting increase in healthcare expenditure (China's health spending exceeded 5% of GDP in 2020, up from 4% two decades earlier in 2000 according to data from The World Bank), has prompted the Chinese government to roll out a "Three Reductions" action plan which requires people to reduce intake of salt, sugar, and oil. The iniatiative could open opportunities in the sugar-free chocolate segment.

East Asians, including Chinese, are relatively less keen on sweet flavors compared to western palates which may necessitate localized recipe formulations; sugar consumption is around 15.5 million metric tons annually in China (translating into a per capita consumption of roughly around 11 kilograms per person), and around 1.8 million metric tons in Japan (translating into a per capita consumption of roughly 15 kilograms per person), considerably lower than the global average of 21.4 kilograms in 2021 according to the Internatiional Sugar Organization. In addition, tastes vary within the country as well. Belgian chocolate maker Planète Chocolat for instance notes that while sweetened chocolates are popular in the south of China where sugar cane is cultivated, chocolates with salty flavors are better received in the north.

American chocolate giant Mars Wrigley manufactures and sells chocolate products including countlines, chocolate bars and dragees in China under brands like Mars, M&Ms, Dove, and Cui Xiang Mi. Mars Wrigley dominates China's chocolate market with a market share of 33% followed by Italian chocolate company Ferrero with a 22% market share.
Recent developments:
- Dove launched alcohol infused chocolates this year in partnership with Chinese alcohol giant Moutai. Meanwhile Cui Xiang Mi launched its first fully recycled PET (rPET) packaging which Mars expects would save about 36 tonnes of virgin plastic annually.

Italian chocolate company Ferrero Rocher manufactures and sells chocolate products in China including truffles and chocolate eggs along with chocolate-based products such as chocolate spreads under brands like Ferrero Rocher, Kinder, and Nutella. Ferrero Rocher is second to Mars Wrigley in China's overall chocolate confectionery market, but is the leader in the country's gifting market.
Recent developments:
- Ferrero Rocher introduced customization services for the Chinese market this year to meet the needs of younger consumers looking for personalized gifts.
Future plans:
- Ferrero Rocher plans to focus on developing new consumption occasions such as Valentine's Day, and International Women's Day, to boost chocolate sales in the Mainland. The company also intends to continue expanding to new channels including online-to-offline, wedding banquets, and corporate gifts.

American chocolate company Hershey sells a variety of cocoa products in China including chocolate bars, chocolate kisses, chocolate sauces, and cocoa powder. Channels include supermarkets, as well as online channels like JD.com.
Recent developments:
- Hershey launched limited edition chocolate bars honoring three distinguished Chinese women - volunteer teacher Wan Lijun, wildlife photographer Xu Keyi, and young artist Wu Xixia - for International Women's Day 2023.
Future plans:
- Hershey's market share has been declining in China, in response to which the company began an International Optimization Program in Q4 2020 which is focused on optimizing their China operations. The program is ongoing.