Ferrero sees greener pasture in China

Ferrero China saw its sales revenue jumped by 4.1% in 2018. Maura De Felip, General Manager of Ferrero China attributed this faster-than-average growth to the revival of the confectionery market in China as a result of a growing middle income consumer market. The overall confectionery market in China grew by 6%, according to Nielsen data.
In China, wedding ceremonies accounted for around 15% of the annual sales of its signature product Ferrero Rocher, said De Felip.
He added that the Chinese consumers' demand for quality products, the expansion of the middle-income class in the country, and the growing sophistication of its consumers are the major reasons for the growth momentum of the Chinese confectionery industry in 2018 and beyond.
Recent statistics from market consultancy Askci showed that the total turnover of the Chinese chocolate industry will cross Rmb 22 billion (US$3.2 billion) in 2018, up 10% from a year earlier.
During the past Spring Festival, which is the peak season for giving gifts in China, Ferrero ranked as the top choice among chocolate brands, according to the consulting firm.
While Ferrero has prioritised the development of the Chinese market, the company will roll out a special package combining the traditional Chinese knot with Ferrero Rocher chocolates to embrace the upcoming Spring Festival. According to De Felip, this can be considered as a major localisation breakthrough in the company's 20 years' presence in China.

Meanwhile, the company's Kinder brand targeting children will also adopt a new package in the form of a red envelope, which indicates good luck and surprise to children.
As e-commerce is growing at an alarming rate in China, the company claimed that 15% of its annual sales in China came from e-commerce. De Felip still sees room for growth as average e-commerce contribution rate is around 25%. Ferrero is strengthening its partnership with leading e-commerce platforms such as Alibaba and JD.
Global market research firm Kantar Worldpanel reported that e-commerce platforms contributed to about 10.6% of the total turnover of fast moving consumer goods in the 3rd quarter 2018 in China.
Despite the growing importance of e-commerce, Ferrero still recognised the importance of brick-and-mortar stores in its distribution channel particularly to the lower-tier cities. Smaller convenience stores registered strong double-digit growth this year, De Felip added.