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Foreign Ice Cream Giants Cater to Chinese Tastes

As summer draws near, the ice cream wars are heating up across China. On March 18, Kong Pengtao, general manager of Wallís China Co., and chairman of Unilever Ice Cream Co., said the Wallís will put 150 million yuan (US$18 million) into brand development and Chinese market exploration this year. On the same day, Nestle Co. also declared that it will introduce more new products. Both are scrambling for a niche in the huge, yet intensely competitive Chinese market.

Itís estimated that on average each year, every person in the United States consumes 19.8 quarts of ice cream, every person from the Netherlands consumes 7.2 quarts, while each Chinese person downs only 0.9 quart. As living standards improve in China, there is huge room for growth in the appetite for ice cream in the Chinese market.

Kong Pengtao said that Wallís last year increased its market share in Beijing by 60 percent and 200 percent in Shanghai. It has opened five chain stores in these two cities. With great expectations for the Chinese market, Wallís decided to add 50 million yuan (US$6 million) in brand development including funds for advertising and product research and development.

Last winter, Kong said, the Wallís Carte DOR-brand ice cream aroused an enthusiasm among Chinese for ice cream in the winter, and it went out of supply. This year Wallís will introduce a newly developed white chocolate Magnum, soft-fruit coned Cornetto, Paddle Pop, and plum-flavored Solero to win more Chinese customers.

Not willing to be outdone, Nestle also is bringing out new products and will offer a series of China-localized flavors, such as the products Chinese Precious, Trufado and Big Mouth. Moreover, it is adding a coffee flavor for its Drumstick and Mega. In an interview, Ke Huage, director of Nestle Co. Tianjin Factory, told us that Nestle chooses the flavors of red bean shrub, mung bean, and sesame to cater to more Chinese tastes.

So far, China has 4,000 ice cream producers, yet Wallís and Nestle still have the lionís share of Chinese market. The two giants have shifted their focus to north China. Facing harsh competition, they both announced that they will launch price wars in the Chinese ice cream market.

(北京青年报 [Beijing Youth Daily] on March 19, translated by Guo Xiaohong for china.org.cn)

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