Industry Insights
China ice cream market is estimated to account for a value of at USD 10.5 Billion in 2017 and is expected to grow further over the forecast period. This growth is determined by the mounting demand for confectionery products and frozen sweet dishes together with the expected increase in consumer spending over the coming years. In addition to this, rising consumer consumption and drastic development of manufacturing capabilities are projected to provide large impetus to market growth.
China ice cream market size split, by type, 2017 (% share)
A large number of consumers are rationalizing their consumption attributed to the considerate negative impact of consuming ice cream and frozen food on health. The situation is anticipated to act as the key hindering factor for the growth of the ice cream market in China over the forthcoming years. In contradiction with this, the premiumisation trend in the country and increasing adoption of premium products among consumers is expected to cater to the increasing demand for ice cream in China.
Hypermarkets, supermarkets, and convenience stores are the main channels for selling ice creams and other confectionery products in the country. Presence of local retail giants is expanding the base for the Chinese ice cream market. The continuous introduction of the new product is allowing companies to respond quickly to latest trends. Moreover, new product developments are helping companies to gain a deeper understanding of consumer preferences and maximize profits through increased sales of the company. The entry of new retailers and development of retail distribution channels is expected to contribute to the revenue growth owing to the convenience factor in near future.
Segmentation by Type
• Artisanal
• Impulse
• Take-Home (family packs)
Based on the type, the market is segregated into artisanal, impulse, and take-home (family packs). Whereas, based on shape, it can be categorized into buckets, sticks, floats, sundae, and frozen novelties. The artisanal segment is most consumed and fastest growing segment amongst the other product segments.
The soft ice cream products market contributed a share of about 10.0% in the total production. Subsequently, the expected increase in consumption of ice cream in China is further expected to have a positive impact on the revenue generation during the forthcoming years.
Segmentation by Distribution Channel
• Hypermarkets, supermarkets & Convenience stores
• Specialist retailers
• Others
Chinese ice cream market is segmented into the following categories of distribution channel hypermarkets, supermarkets & convenience stores, specialty retailers, and others. The market is largely dominated by the hypermarkets & supermarkets, generating a huge amount of overall revenue. Together with, convenience stores are the central venue for all the family shoppers in small towns as well as cities.
The improving infrastructure and construction activities in the region such as construction of shopping malls, mega markets, food and dessert joints and others is likely to provide ample of opportunities to new players to establish their business, and local players can further grow their market with the help of marketing and advertisement. Offline distribution is estimated to be the largest distribution channel for ice creams and confectionery products in China and accounted for a determined revenue share in 2017 and is expected to show lineage growth in the coming years.
Competitive Landscape
China ice cream market is fragmented in landscape with the presence of numerous large and small-scale players. The China ice cream industry is highly competitive with vendors competing for pricing, distribution, and product innovations. The market comprises of few large and well-established players in the China ice cream sector which includes Unilever, Nestle, Meiji Holdings Co., Ltd., Chinatown Ice Cream Factory, YILI.COM INC. And General Mills Inc.
In 2017, Mongolia Yili Industrial Group dominated the ice cream and frozen desserts sector in China markets, with a revenue contribution of approximately 15.0% in the overall market. The country is profiting from the company’s strong distribution channel across the country. Furthermore, the company is increasingly setting up its freezers in local retail shops for the distribution of its frozen dessert products.
Additionally, the company’s intensive investment in research and development activities is further supporting the new product innovations. The new product offering of the company is attracting more consumers to try on new flavors. For instance, Yili introduced company’s new ice cream category under its brand Yili Chocliz, which is offered in two flavours, i.e. niche mint and classic chocolate. This scenario is resulting in the expansion of company business and generating more profits. The key players in the market are implementing mergers & acquisitions in order to expand company business by introducing new products to its current product portfolio.
