Chocolate Fortunes - by Lawrence L. Allen
L e A D A RT I CL e
13
Chocolate Fortunes:
The Battle for the
Hearts, Minds, and
Wallets of China’s
Consumers
By
Lawrence L. Allen
The emerging China market was a level playing field for all of the Big Five chocolate companies when they arrived in the 1980s. Chinese consumers viewed chocolate as an exotic foreign product, so each of the chocolate manufacturers enjoyed the same level of prestige and credibility that China’s inexperienced consumers associated with foreign goods. Retail prices were relatively high and manufacturing costs relatively low, so none found pricing and cost to be barriers to entry. Importantly, each was flying blind when it came to consumer and market information, and by the seat of their pants when dealing with China’s mercurial economic and regulatory environment. How the executives of the Big Five applied the experience, management skills, and leadership capabilities they brought to China would be decisive in how each approached the emerging consumer market and whether they ultimately succeeded. © 2010 Wiley Periodicals, Inc.
I
n 2008, China celebrated the thirtieth anniversary of the country’s reopening its doors to the outside world. Over the past 30 years, China has transformed itself from an isolated economic basket case to an indis-
pensable economic powerhouse within the global economy. Its gross domestic product (GDP) has grown by over
69 times, an astonishing 10% per year on average, and is now the third-largest economy in the world behind the
Correspondence to: Lawrence L. Allen, c/o Heidrick & Struggles, Suite 718, South Tower, Kerry Center, 1 Guanghua Road, Chaoyang District, Beijing 100020,
P.R. China, +86 10 6598 8288 (phone), lawrence.allen@chocolatefortunes.net.
Published online in Wiley InterScience (www.interscience.wiley.com).
© 2010 Wiley Periodicals, Inc. • DOI: 10.1002/tie.20306
14
L eAd ART ICL e
United States and Japan. China’s breathtaking transformation from a
13
Chocolate Fortunes:
The Battle for the
Hearts, Minds, and
Wallets of China’s
Consumers
By
Lawrence L. Allen
The emerging China market was a level playing field for all of the Big Five chocolate companies when they arrived in the 1980s. Chinese consumers viewed chocolate as an exotic foreign product, so each of the chocolate manufacturers enjoyed the same level of prestige and credibility that China’s inexperienced consumers associated with foreign goods. Retail prices were relatively high and manufacturing costs relatively low, so none found pricing and cost to be barriers to entry. Importantly, each was flying blind when it came to consumer and market information, and by the seat of their pants when dealing with China’s mercurial economic and regulatory environment. How the executives of the Big Five applied the experience, management skills, and leadership capabilities they brought to China would be decisive in how each approached the emerging consumer market and whether they ultimately succeeded. © 2010 Wiley Periodicals, Inc.
I
n 2008, China celebrated the thirtieth anniversary of the country’s reopening its doors to the outside world. Over the past 30 years, China has transformed itself from an isolated economic basket case to an indis-
pensable economic powerhouse within the global economy. Its gross domestic product (GDP) has grown by over
69 times, an astonishing 10% per year on average, and is now the third-largest economy in the world behind the
Correspondence to: Lawrence L. Allen, c/o Heidrick & Struggles, Suite 718, South Tower, Kerry Center, 1 Guanghua Road, Chaoyang District, Beijing 100020,
P.R. China, +86 10 6598 8288 (phone), lawrence.allen@chocolatefortunes.net.
Published online in Wiley InterScience (www.interscience.wiley.com).
© 2010 Wiley Periodicals, Inc. • DOI: 10.1002/tie.20306
14
L eAd ART ICL e
United States and Japan. China’s breathtaking transformation from a