According to Lee Kwang-Hoon, president of Lotte China, the company will expand into affluent coastal provinces in Eastern and Southern China, including Jiangsu, Zhejiang and Guangdong through large-scale
supermarkets such as Carrefour.
The move reportedly came in response to steadily escalating demand from consumers in a market where, although still relatively small, the chocolate industry is growing at an annual rate of between 15 and 20 per cent. It is currently valued at almost 6.5 billion yuan (US$945 million).
While Lotte’s marketing activities currently focus on the youth demographic, the company is understood to be weighing up the option of introducing a higher-end product range to target the profitable gift market.
Having entered into a partnership with US counterpart Hershey last year that sees the firms share a factory, Lotte has cornered 6.5 per cent of the Shanghai market, and 7.7 per cent in Beijing, according to statistics from ACNielsen.
Kevin Ma, Hershey’s marketing director for Asia and the Middle East, said there was little direct competition in China and that the emphasis was on growing as an industry in a market with huge potential.
Lotte Confectionery expands its reach in the mainland
SHANGHAI - Lotte Confectionery, part of South Korean chaebol conglomerate Lotte Group, has announced plans to extend its marketing activities in China by distributing its chocolate brands outside of its three initial test markets of Beijing, Shanghai and Tianjin.
