sugar confectionery china - december 2014 - infographic overview
TRANSCRIPT
December 2014 - China
SUGAR CONFECTIONARY
© 2014 Mintel Group Ltd. All rights reserved. Confidential to Mintel.
reports.mintel.com@[email protected] +44 (0)20 76064533Americas +1 (312) 9320400APAC +86 (21) 63866609LAR 0-800-095-9094
MATTHEW CRABBEDirector of Research, APAC
INFOGRAPHIC OVERVIEW
The sugar confectionary market faces slowing growth,
and high fragmentation, leaving brands vulnerable to weak market share and poor consumer loyalty. Companies are selling more higher-end products to alleviate this, but need to target specific consumer groups more.
Sugar confectionary products aimed at specific demographic groups could focus on functional benefits and natural ingredients, suited to the needs of each group, such as helping with nutrition or avoid ailments.
The high degree of market fragmentation means margins are being squeezed and brand penetration remains low. Online retailing offers the potential to reach more consumers across the country and create closer communication and engagement with consumers, and from that more responsiveness to their needs.Fragmentation also means companies must raise economies of scale, and online retail also provides a means by which to reduce costs while reaching more potential customers.
WHAT WE THINK
COMPETITION MOUNTS IN A SLOWING MARKET FRAGMENTATION IMPEDES STRONG BRAND PENETRATION
MOST CONSUMERS BUY ON PURPOSE RATHER THAN IMPULSIVELY FESTIVALS AND CELEBRATIONS TOP PURCHASE OCCASIONS
Total value sales grew at a CAGR of 13.7% between 2010 and 2014, but with slowing growth, and is forecast to grow at a CAGR of 9% between 2014 and 2019. Competing sectors, especially salty snacks and chocolate confectionary, have grown faster and taken consumer attention. Volume sales grew more slowly, as consumers trade-up to higher quality, higher priced products.
The market remains highly fragmented, making it harder for companies to achieve significant market shares. This leaves companies vulnerable to shifts in the market, especially as competition is coming from other snacking markets. Even market leaders, such as Nestlé SA, have suffered from an erosion of their market share in 2013, compared with 2012.
Most consumers who make a deliberate purchase decision, rather and an impulse one, do so for a functional benefit, such as to freshen their breath or soothe their throat. However, impulse purchasing is still important, especially among younger adults with younger children, indicating the importance of “pester power”.
45% of surveyed consumers bought sugar confectionary for gifting during Chinese traditional festivals, especially older people in their 30s and 40s. The next most important gifting occasions were to express gratitude (38%) and as house warming gifts (36%). Men are more likely than women to purchase it as dating gift or during Valentine’s day, typically men in their 20s.