Candy Dish Blog

By 2008 numbers, the World Bank estimates that China has about 1.3 billion people, about 20% of the world’s population. That makes China the most populous country on the globe, closely followed by India. However, despite having 20% of the world’s population and a quickly growing economy, China is responsible for only two percent of world chocolate sales.

This number is growing, albeit slowly, and the disparity is quite striking. What could be the big barrier to chocolate imports in such a large country? Kris Eddy of The Motley Fool recently asked a related question and a commenter explained that one big barrier is that chocolate has been used in China for quite a while as a way to cover the bitter taste of various medicines, including cures for intestinal parasites. Talk about taste aversion.

Could this negative association be the whole story? I suspect that is a large part of it but that another aspect is China’s unique economy, which is growing yet very protected, with built-in barriers to foreign trade. In addition, as Slate’s Daniel Gross points out, chocolate is an expensive treat, possibly too sweet for the country’s palate and contains milk, which does not sit well in a country with a high level of lactose intolerance, as China has.

Right now China is up for grabs by the chocolate industry for whichever company wants to put in the marketing dollars to promote a treat that is not very popular. It’s a huge bite to chew on, and an expensive one, but potentially very lucrative. Another barrier is that China rid the country of most foreign influences a number of years ago and only really started to open up in the 1970’s, so there have been about 35 years to bring chocolate into the country and promote it.

India, on the other hand, seen as the other big, largely untapped market, has historic and commercial connections with England dating back to the early 1600’s. Although these times were not always peaceful and certainly wrought with turmoil especially toward the end of the colonial period, the end of the Raj saw a mutual agreement of friendship when India joined the Commonwealth in 1947. It makes sense that one or more British companies would dominate India’s chocolate market simply based on this 400-year-old connection.

But China is problematic. Without a natural taste for the treat and without historic trade connections, it is almost a blank slate of opportunity but bordered by strong barriers on all sides. Are the barriers too much for  chocolate makers to overcome? I suspect a balance will be found. China will likely not readily embrace chocolate the way we have in the U.S. but chocolate manufacturers may find some inroads by marketing it as a luxury item for wealthy consumers and others who appreciate the finer things in life.

The future of the industry in China is uncertain, but one thing is for sure. Mastering the art of chocolate in China might be like breaking the roughest horse in the corral and the company that figures out the secret to this will likely profit handsomely from the payoff. If you can ride him, he’s yours. Now who is going to be the first to step up?

Map of China by GGuillaume.