Asia, like any part of the world, has its sweet tooth. Recognising this, and seeking to capitalise on the region’s growing appetite for luxury produce, Hershey’s recently partnered with Euro RSCG to develop its first regional advertising.
Meanwhile, rival confectionery brands Mars, Cadbury and Dove are all stepping up marketing investment in Asia. But with low per capita consumption (seven kilograms in the West drops to between 100 and 150 grams in China), and notable cultural differences, Asia presents a considerable challenge.
Hershey’s will face a challenge distinguishing itself from dominant local brands such as Meiji in Japan and Lotte in Korea. Meanwhile in India, Cadbury has become a household nam, and in China, Dove has cornered 45 percent of what is the largest market in the region after Japan by targeting a female audience. China’s market is growing at twice the global rate, and some experts believe that demand will soon outpace the speed at which new factories can be built.
“Purchasing power has grown steadily over the past decade,” says Kevin Ma, Hershey’s regional marketing director for Asia and the Middle East. “But consumption is still low. The market is relatively small compared to its potential. It’s the responsibility of the players to drive the different categories.”
This is something international brands are failing to do, according to Euro RSCG director of strategy, Matt Donovan, who observes that the market has yet to segment and that disparate brands are competing against each other on the same playing field. “They are developing markets, but not developing categories.” Donovan adds that it will be a long time before chocolate becomes the everyday food it is the US, with the exception of the US-influenced Philippines. In China, he notes, over half of all chocolate is bought as a gift; Asian society also emphasises a more balanced diet and is less prone to excess than its US counterpart. In many emerging markets, chocolate jostles for attention with unrelated products such as mobile phone credits.
Matt Godfrey, CEO of Publicis Asia Pacific, points out that many Asian markets lack the retail infrastructure necessary to the success of an unfamiliar product with a propensity to deteriorate in warm conditions. “You can’t just distribute it and hope that people will create a habit,” he says. “It’s not an impulse product. It’s very important to create an occasion to buy.”
Ma explains that while Hershey’s plans to retain its key brand characteristics and offering, it will need to focus on higher-end consumers in the initial stages and potentially adapt its approach to forging an emotional connection.
Building a strong connection is critical in a market where there is currently little distinction between international brands and established local and counterfeit brands. “The ads are all very typical,” says Donovan. “They show a wonderful eating shot, some chocolate porn, proud parents, perhaps a woman on her own indulging, a mention of ingredients, and a pack shot.”
But perhaps the most valuable lesson can be learned from Cadbury’s sixty-year history in India. “Chocolate brands in Asia have had a relatively inconsistent marketing presence,” says George Singleton, regional planning director at Publicis. “They spend, then they cut back. But if a brand is willing to invest and keep pushing, as long as the product’s decent and consumers are interested, it can build a solid business that will continue to grow.”