A woman looks at chocolates at a recent expo in Shanghai. [China Daily]
Shanghai's love affair with fine chocolates is a boon to foreign makers of the sweet stuff, and Belgian luxury chocolatier Godiva is well aware of this.
Following its entry into China with the opening of a store in Shanghai's Grand Gateway Mall last September, the premier chocolate manufacturer plans to gear up its expansion plan in the fledgling market.
"We've been very pleased with the way (Chinese) people have responded to the business, our financial performance (of the first store) during Christmas was better than we expected," said Jim Goldman, president of Godiva Chocolatier Inc, without elaborating. "It's a long road, and we're committed to build our business here over many years," he said.
As a matter of fact, after testing the waters, Godiva plans to set up at least two more flagship stores this year in the city's Xintiandi area and at Shanghai International Financial Center (IFC).
The 300 sq m Xintiandi store, slated to be its biggest in the world, will have a very broad range of chocolates, chocolate-related desserts, and snacks and beverages, according to the company.
"We perceive that luxury brands are coming here and have done well with much growth and it's a very big step for us, we will open the Xintiandi store some time in March or April of this year," Goldman said. The IFC outlet will open in April.
And in the eyes of Goldman, the Chinese market is the single most important given its size, as well as the growing wealth and appreciation of luxury products in the nation.
According to a report from Bain & Company, a leading management consulting firm, China's luxury goods sales saw 12 percent growth in 2009 - while the global market suffered an 8 percent contraction - due to the strong overall growth of the nation's consumer market.
"The total size of the chocolate market in China in 2009 is approximately 7 billion yuan and is expected to grow about 11 percent a year through 2011," said Howard Abe, Asia-Pacific practice leader for consumer industries and retail practice with global management consulting firm AT Kearney.
"What we're finding is that many Chinese consumers are coming into our store and buying one or two chocolates to taste and to understand what they love. I think Chinese consumers are interested in learning and experiencing new things, and food and beverages are areas that the Chinese love," said Goldman.
As such, Godiva is actively looking for locations in Beijing and Guangzhou. "Our hope is that we'll open more stores in these cities in 2010," Goldman said.
However, as a fresh player in the market, which has already been tapped into by competitors such as Jeff de Bruges from France, or even more reasonably-priced brands like LeConte, Ferrero, Cadbury and Meiji, Godiva is facing an uphill battle.
Competition is expected to intensify with the recent entry of other leading global chocolate companies like Lotte, Hershey's and Barry Callebaut, as well as competitors crossing over from other categories including candy manufacturers Yake, AT Kearney's Abe said.
