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International Marketing

Essay by   •  April 7, 2019  •  Research Paper  •  1,139 Words (5 Pages)  •  13 Views

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Summary

Political & Legal

  • the China-Australia Free Trade Agreement (ChAFTAs) entered into force on December 20, 2015 (evidence 2, page 4).
  • China announced new standard on Candy and Chocolate on Sep 4, 2015 (Evidence 14, page 11);
  • There are lots of food regulations and trade barriers in China (Evidence 15, page 12-13)

Economic

  • China is the second largest economy in the world, with a decrease in the real GDP growth and increase in the GDP per capital between 2013 to 2019 (Evidence 3, page 4).
  • Guangzhou is one of the most prosperous cities in China, located in the heart of the pearl river delta-one of the major commercial and manufacturing areas in China. It’s GDP grew by 7 percent in 2017 (¥2150.32 billion ) and GDP per capital was ¥150,678 (Evidence 4, page 5)
  • the growth of the middle-class is gradually changing China, according to the research by McKinsey, nearly 75% of China’s population will reach to upper middle-class, with annual household income between 60,000 to 229,000 RMB ($9,000 to $34,000)by 2020 (Evidence 9, page 8)
  • by 2020, the generation 2 of China’s new middle-class generation would be the main consumption group, and their consumer behavior are most Westernized to date (Evidence 10, page 9).

Social & Cultural

  • The population of China is 1.4 billion in 2017, the current 2019 population of Guangzhou is estimated to be over 13 million (Evidence 5, page 5);
  • China is rapidly urbanization, with about 70 percent of the population expected to live in cities by 2030, compared with less than 20% in 1980 (Evidence 8, page 7);
  • the middle-class group in urban areas is the main consumer of chocolate (Evidence 6, page 6), High-end chocolate consumers in China prefer products with less sugar, so dark chocolate is more popular
  • In China, premium chocolate are usually used as a gift, especially during the festival time (Evidence 11, page 9).
  • “Sweet food” is far different between China and Western countries. For western countries, “sweet food” is the dessert to end a pleasant meal; but it is put on the table, together with others and used to ‘balance’ and ‘alternate’ the spicy and savory tastes on a typical Chinese meal (Evidence 28, page 23)

Technological

  • There are over 480 million internet user in China, which caused a rapidly growth in internet retailing, and around 6.2 percent of total retail sales was online retail market (Evidence 12, page 11)
  • There are many e-commerce platforms in China (Evidence 13, page 11)

Environmental

  • China is not only the largest agricultural producers, it is also the largest net importer of food in the world, nearly AUD 89.8 billion of food have been imported by China every year. China is the third biggest food exporter for Australia, nearly 3%-4% of China’s total import food market share were Australia food over last decade, especially chocolate, one of the major growth categories of food import from Australia (evidence 1, page 4).
  • In 2014, the China’s capital consumption of chocolate was only 0.2kgs, compared with Brazil’s 2.5 kgs and 0.7 kgs of India; therefore, a huge potential of chocolate market in China in the future (Evidence 16, page 14-15).


Top five insights

  1. Foreign brand gaining popularity

Imported chocolate is the most popular in China’s premium chocolate market, due to the less confidence for the safety of local brand and the high requirement for product quality, around 45% of total market share were accounted by foreign brand until 2016, and it’s still keeping 3% growth each year (Evidence 17, page 16). To be details, in 2018, 35% of the market shared by Mars, follow by 21.9% of Ferrero, and then Nestlé accounted for 4.1% (Evidence 18, page 16). Australia chocolate product(superior quality) are highly competitive if narrowing the price gap with local brand.

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