Consumers sour on chocolate for Valentine’s Day gift-giving

Updated 2017-02-14 09:57:11 Global Times

Changing tastes mean Chinese consumers' enthusiasm for the Valentine's Day holiday won't yield a windfall for vendors of chocolate gifts that are meant to express love, and people who do buy the confection are likely to do so online, industry analysts said on Monday.

Well-known mass market chocolate makers are struggling in China. For example, Hershey's, the biggest chocolate maker in North America, said earlier this month that its sales in China slipped 4 percent in the fourth quarter of 2016, matching the sales declines of the two previous quarters, according to the company's financial statement.

Hit by the slowdown in its Chinese business, the company's net income fell to 6.9 million in the fourth quarter from 7.9 million the same period in 2015, Reuters reported.

The retail volume of chocolate is estimated to have declined 4 percent year-on-year to 122,000 tons in 2016 in China, according to a report released by research firm

In 2015, the year-on-year slide in chocolate sales was 2.4 percent, compared with a 20 percent growth in 2012, according to Euromonitor International's report.

The shrinking market for the sweet snack comes as Chinese consumers look for a healthier diet. One of them is 27-year-old white-collar worker surnamed Chen.

At a supermarket in Beijing's Chaoyang district, Chen shunned shelves stocked with chocolate and chose a wrapped bunch of flowers instead as a gift for his girlfriend on Valentine's Day.

"Chocolate makes me think of sugar. My girlfriend and I prefer healthier and more natural options instead of indulging our sweet teeth, which may lead to weight gain or diseases," Chen told the Global Times on Monday.

Concerns like these have prompted some chocolate vendors to shrug off stereotyped images. For example, both Mars and Hershey's have premiered snack bars this year, featuring fruit, nuts and lower calories. But such efforts have not yet drawn "nutrition-savvy consumers," said Wang Xinmiao, a Beijing-based consumer products industry analyst.

The Euromonitor International also said that China's economic slowdown is one reason behind the country's lackluster chocolate sales. "Consumers have chosen to reduce expenditure on chocolate, which is viewed as non-essential," the report said.

Wang noted that the drop in retail traffic is only limited to mass market brands like US-based Dove and Hershey's as well as Italy's Ferrero, whose consumer bases are more price-sensitive.

On the contrary, "the premium chocolate category, which includes such names as Godiva and Lindt, whose average prices are at least twice those of the general ones, has posted robust growth in the Chinese market," Wang told the Global Times on Monday, noting that high-end products are likely to serve as the new engines of market growth in China.

Still, the general chocolate products account for about 82.5 percent of domestic market.

Therefore, reversing the downward trend simply by putting more high-end items on the market is "mission impossible," according to Wang.

Another issue that candymakers face is that shopping for chocolate has largely moved online, squeezing sales at bricks-and-mortar outlets and supermarkets.

"Buying chocolate is generally motivated by impulse, which happens when consumers see or touch the products. However, booming online sales, combined with an absence of new product innovation in recent years, has significantly reduced impulse purchases," Li Xingmin, a marketing expert at consulting firm Topmarketing, told the Global Times on Monday.

In 2016, the sales of chocolate generated by e-commerce platforms soared 27.3 percent year-on-year, with families joining the online bandwagon jumping by 400,000 to more than 2.5 million, financial news website reported on Monday.

Meanwhile, consumers who shopped at supermarkets and stores in 2016 tumbled 14 percent and 2 percent, respectively, compared with 2015, domestic news portal reported.

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