China’s Chocolate Market Dominated by Foreign Brands

Foreign chocolate brands such as Dove, Cadbury and Hershey’s have now captured about 70% of the Chinese chocolate market. As Barry Callebaut, the world’s largest chocolate manufacturer with 25% of the global market, recently opened its first chocolate factory in China in Suzhou City, the top 20 chocolate companies in the world have now all entered the Chinese market. But in the face of global competition, China’s local chocolate companies have been further suppressed down the value chain.

Second largest chocolate market

As the CHF 4 billion-revenue-per-year Barry Callebaut set up its first production line in Suzhou, a complete multinational chocolate industry chain is also emerging. Industry insiders suggested that this would be a blow to local Chinese chocolate companies in this globalized competition. It further indicated that keeping up with international competition is particularly important, or the Chinese industry chain will become even more vulnerable.

In recent years, the global chocolate market has notably slowed down, with only 2-3% growth per annum. This is mainly because per capita chocolate consumption in developed countries is already at a high level, averaging 11 kg. On the other hand, China’s per capita chocolate consumption is only 0.1 kg, and its domestic chocolate market has been growing at a staggering 10-15% per year, with an estimated market potential of US$2.7 billion. Thus China has become the world’s second biggest chocolate market only behind the US. The world’s top 20 chocolate companies have all entered China, and there are more than 70 imported or JV chocolate brands in today’s Chinese market.

Barry Callebaut has made it clear that they are coming to share and participate in China’s economic growth. It plans to build the Suzhou factory into the largest among its 38 factories globally, and achieve a 6-fold sales increase in the next five years via the Suzhou factory’s high capacity. “We hope we can fully utilise this factory’s capacity to rapidly increase output from 25,000 tons to 75,000 tons, making it the world’s largest chocolate factory,” said Barry Callebaut CEO Patrick De Maeseneire.

Multinational ambitions

It is understood that Barry Callebaut’s new plant in Suzhou will become the company’s Asia-Pacific headquarter, as well as a sales network centre for serving China and multinational food manufacturers and specialised customers. Major brands, such as Cadbury, Hershey’s and Nestle, all currently have large quantity of outsourcing manufacturing contracts with Barry Callebaut, whose OEM output of cocoa liquor and chocolate products amounts to 15-20% of each of the three major brands’ annual output. So the Swiss Barry Callebaut is indeed the Big Brother of the global chocolate industry.

In fact, even before the arrival of Barry Callebaut, China’s local chocolate companies had already been losing market shares to multinational competitors. The US Hershey’s has determined to plough the Chinese market, planning to achieve 23% share of the local market by 2010 and the runner-up position in China. Meanwhile, Korean and Japanese chocolate producers are also accelerating their entry into the Chinese market.

Local companies not in the local market

Although the rapidly growing Chinese chocolate market is good news for its local chocolate companies, Chinese consumers today are frequently referring to foreign brands such as Dove, Cadbury, Hershey’s and Ferrero but seldom mentioning local brands.

As a foreign product, China only has a chocolate manufacturing history of less than 50 years, so there is inevitable gap behind foreign brands in terms of production techniques and technologies. Due to inappropriate processing equipment and incomplete production facilities, product quality assurance is difficult for many local chocolate companies. Furthermore, most Chinese chocolate companies are weak in product R&D, resulting in slow product changes and updates. At present, most local chocolate companies are stuck in an embarrassing situation of low product quality.

The above industry issues have costed local companies’ opportunities to participate in the competition for the Chinese chocolate market. Multinational chocolate brands have come to the Chinese market one by one since the 1990s, and now they are in a dominant market position. With their considerable financial power, multinationals can play their technological and cultural cards, as well as promoting their premium quality and unique tastes, to rapidly capture the Chinese market.

As Barry Callebaut finally entered the Chinese market, its Suzhou factory will make chocolate production even cheaper for multinational brands. For local Chinese companies that are mostly in the low-end market, they may no longer hold this market segment firm.

Keep up with the globalization

Statistics showed that there are about 63 large-scale local chocolate companies in China, with annual production of 150,000 tons. Statistics from industry associations also revealed that China currently has about 250 chocolate companies in total.

Industry insiders pointed out that the Chinese food and beverage industry is a highly and internationally competitive market. The vast potential of China’s chocolate market is not only for foreign brands, but is also laid in front of local chocolate producers. The local chocolate industry is now in a structural change and survival-of-the-fittest stage, and no doubt the entry of foreign brands will present challenges to the local industry. But if local chocolate companies can participate in this international competition, it could not only drive the chocolate demand from Chinese consumers, but also promote development of China’s chocolate market.

Local Chinese chocolate companies need to constantly improve their product quality, select finer raw ingredients, upgrade production facilities, adopt international technologies, enhance product innovation and brand management. Only then can they compete with multinational companies on a level-playing field, and make a breakthrough in this foreign-dominated Chinese chocolate market.

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Did China’s Conspiratorial Actions Push the World Into Crisis?

The coronavirus pandemic, in addition to snuffing out scores of lives, is also triggering racial tensions all over the world. There is a long history of naming pandemics by attaching them to a specific place and people. For example, the 1918 influenza pandemic, which was found in Spain, was called ‘Spanish flu’ and the recent Ebola Virus Disease (EVD) is named after the Ebola River in Congo, where it was first discovered. In the same way, West Nile Virus and Zika were also named as per their geographical origins. Following the same theme, people started calling the coronavirus, which first raised its ugly head in Wuhan city of China, as either ‘Wuhan coronavirus’ or ‘Chinese Virus’. Even the well-known western newspapers such as The New York Times and the Washington Post used similar terms to refer to the virus initially.

Official Nomenclature: The World Health Organization (WHO) officially named the decease as coronavirus disease and the virus as Severe Acute Respiratory Syndrome Coronavirus- 2 (SARS-CoV-2). The Associated Press (AP) stylebook, which is considered to be the gold standard for media professionals, prescribed the use of either coronavirus or COVID-19 (Coronavirus Disease-19).

Trump’s Plain Speak: In the election-bound United States, where the political temperatures rose recently, the Republicans started using terms such as Wuhan Coronavirus, Chinese Virus, and even Kung-Flu to highlight the origins of the virus. President Trump, who usually consigns political correctness to the dustbin and speaks the truth, repeatedly used the expression ‘Chinese Virus’ to highlight the fact that the virus not only originated in China but also spreading due to the conspiratorial actions of China’s totalitarian communist regime.

Is the Reference to China Racist? The Communist Party of China (CPC), which has no respect for freedom of expression and exercises tight control over its domestic media, objected to the use of the China-centric expressions and termed them racist. And the left-leaning western newspapers, which were hitherto using the same terms, changed the tune and started toeing the line of the CPC. Even the left-leaning politicians all over the world also toed CPC’s line and started castigating people who used the expressions that highlighted the virus’s Chinese origins.

What People Think? Despite what the WHO says or AP Stylebook prescribes, the virus that originated in Wuhan city of China will always remain as a ‘Chinese Virus’ in the minds of the people. Because people strongly believe that the dreadful food habits of the Chinese and the conspiratorial actions of their communist regime regarding the virus outbreak pushed the world into this terrible crisis.

Massive Cover-Up: It is a widely known fact that the communist regime headed by the CPC is highly despotic and authoritarian. It wants to use its economic and military clout to achieve its political and territorial ambitions. It, in pursuit of its ambitions, tightly controls information to build a favorable narrative about itself. As a result, there is hardly any independent media houses in China. The media houses that are existent in China have reduced themselves into mere propaganda machine of the despotic regime. There are reports stating that China is even trying to obtain favorable publicity by buying popular journos to plant favorable news and opinion pieces about itself. There is a talk that even many Indian journos sold their souls to the CPC.

Dreadful Food Habits: After the coronavirus pandemic started inflicting ever-mounting mortalities, many questions arose about the role played by China, where the disease originated. The first thing the world started discussing is the dreadful food habits of the Chinese. Chinese are known for eating anything that moves including scorpions, snakes, bats, dogs, donkeys and what not. As per the research findings, the novel coronavirus has its origins in the Chinese slaughterhouses and wet markets. Therefore, people all over the world concluded that the terrible food habits of the Chinese led to the birth of this virus. Many videos are circulating both on mainstream and social media that depict the mind-numbingly cruel methods the Chinese use to kill the animals such as boiling and blow-torching live animals.

Conspiratorial Actions: And moreover, there are many allegations that China concealed the enormity of the virus outbreak to avoid damage to its economy. It misled the world by stating that the coronavirus does not transmit from human to human, and therefore the world need not worry about it. It also tried to create the impression that the virus is only local to China and hence no need for canceling any flights to it. The world trusted its words, and as a result, paying a heavy price in terms of lives lost and damage to the economy.

https://twitter.com/WHO/status/1217043229427761152

The tweet made by the World Health Organization (WHO) on Jan 14, 2020, is a clear indication that China lied about the nature of the virus.

Li Wenliang, the Chinse whistleblower doctor, who warned his colleagues about the virus in December 2019 and took to the social media to alert the people, was accused of spreading fake news and was admonished by the Communist Party of China (CPC). The physician later contracted the virus and died while undergoing treatment. The CPC rendered a posthumous apology to the doctor’s family. There are many observers who feel that had the CPC listened to him and taken appropriate measures to curb the spread of the decease and even alert the world community, the world would have been in a far better place to mitigate the after-effects of the virus outbreak.

Expulsion of Journos: China expelled many American journalists who, it thought, were working against its interests. The journalists who worked for prominent newspapers such as the New York Times and The Washington Post were expelled by China for not toeing its line. The unending opacity maintained by the CPC dealt a deathblow to the efforts of the world to contain the virus during its initial stages itself.

Peddling Fake Fatality Numbers: Many observers even suspect the fatality figures given by China. If a small country like Italy can have over 15,000 fatalities, China must have suffered far more fatalities, which it somehow concealed. As per a US intelligence report, China’s public reporting on cases and deaths is intentionally incomplete and their fatality figures are fake.

Conspiracy Theories: There are many conspiracy theories that are flying thick. Many observers believe that China, to further its economic and territorial ambitions and to establish its hegemony over the world, was involved in manufacturing biological weapons. And during the process of manufacturing these weapons the virus accidentally escaped from one of its labs.

As per the tweet sent by China Daily on 29th May 2018, The Wuhan Institute of Virology located at Wuhan in Hubei province preserved over 1,500 strands of viruses. Surprisingly, the tweet was deleted some time ago, strengthening the suspicions that China wants to conceal something from the world community. Many observers suspect that the virus escaped from one such bioresearch lab due to week biosecurity management.

Though there is no way to verify these claims at this juncture, the suspicions will always linger in the minds of the people considering the untrustworthiness of the CPC.

The Biased WHO: Even the WHO was at the receiving end for the way it dealt with the coronavirus crisis. Instead of independently verifying the facts, it just toed the line of the Chinese Communist Party and kept the world in dark.

When many countries such as the United States, Australia, Singapore were denying entry to foreigners traveling from China as part of their efforts to limit the spread of the virus, the WHO chief, Tedros Adhanom, urged the world community not to do so. He even went to the extent of terming those measures an “unnecessarily interfere with international travel and trade”. His statements toeing the line of the CPC were, to a great extent, responsible for the spread of the virus far and wide.

It even misled the world on the nature of the disease. There are allegations that the WHO Chief when he was the health minister of Ethiopia, acted in favor of the Chinese interests, and China, as a quid-pro-quo, actively promoted his candidature for the post of WHO chief by using its political clout.

Conclusion: The outbreak of COVID-19 and its aftermath brought the dangerous and toxic nature of China’s Communist regime to the fore. The lack of democracy and the absence of independent media keeps the world in dark about the potential dangers emerging from China. Its economic, political and territorial expansionism denies a level playing field to the other nations and works to their disadvantage. Therefore, the world must come together to launch an independent investigation into the virus outbreak and the role played by the Chinese communist regime.

China, after sailing through the crisis by keeping everybody in dark about the happenings, has opened its factories and resumed production. The COVID-19 testing kits exported by it to Spain and Turkey are proved to be faulty. Even the Netherlands, after finding that the masks imported from China faulty, has recalled them from the market. Though the products produced in China are known for their mediocrity, the virus originated in it seems to be sturdy and long-lasting. The world community, no doubt, has to put up a united front to combat the coronavirus disease at this juncture. But at the same time, it must also be on guard not to let the totalitarian Chinese regime exploit the situation to establish its political, territorial and economic hegemony over the world.

Works Cited List:

Hasson, Peter. “China Helped Put This Man In Charge Of the World Health Organization-Is It Paying Off?” The National Interest, The Center for the National Interest, 23 Mar. 2020.

Lisa, Schlein. “WHO Chief Urges Countries Not to Close Borders to Foreigners From China.” Voice of America, 3 Feb. 2020.

Nick, Wadhams, and Jacobs Jennifer. “China Concealed Extent of Virus Outbreak, U.S. Intelligence Says.” Bloomberg.com, Bloomberg, 1 Apr. 2020.

Payne, Adam. “The Netherlands Has Recalled 600,000 Coronavirus Face Masks It Imported from China after Discovering They Were Faulty.” Business Insider, 29 Mar. 2020.

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