Recently, a message of "Hershey Chocolate withdrawing from China" spread on the Internet: some netizens found that the official store of Hershey could not be searched on Tmall; the WeChat public account named "Hershey Dessert Concept Store" has continuously posted articles since December last year revealing that Hershey is streamlining personnel in the Chinese market, and called out to the person in charge of the foreign party, hoping that the brand will treat Chinese dealers well and properly handle the relationship between brands and dealers.
For Chinese consumers, the small teardrop-shaped chocolate is the representative product of hersheys, an American brand, and the advertisement of "small body, big taste" has given many people sweet memories. Why is there a sudden news of "exiting the Chinese market"? The Jiefang Daily and Shangguan news reporters found that the incident was not as simple as rumors.
The brand did not officially announce its "withdrawal from China", but there was a dispute with the distributor
The reporter learned through the inquiry of the enterprise credit reporting platform "Qixinbao" that the business entity of the "Hersheys" brand in China is Hershey (China) Investment Management Co., Ltd. (hereinafter referred to as "Hershey"), which was registered and established in Shanghai on April 26, 2001, and the legal representative is ROHIT GROVER; there are also two Hershey related companies that were established on November 19, 2012 but have been liquidated. Hershey Commercial (Shanghai) Co., Ltd. was established on December 17, 2007 but has been deregistered.
As of press time, Hershey has not publicly replied to "withdrawing from the Chinese market" and "why is the Tmall flagship store closed".
Look at the WeChat public account "Hershey Dessert Concept Store", which revealed the news of Hershey's closure and withdrawal of stores, the main body of which is Shenzhen United Sky Catering Management Co., Ltd.
According to some articles on the account, a company called "Shenzhen Xintuo Industrial Co., Ltd." (hereinafter referred to as "Shenzhen Distributor") has become a supplier of Hershey (China) Investment Management Co., Ltd. since December 21, 2015, to carry out the operation of hershey's dessert shop project, "However, due to the adjustment of the Chinese mainland development strategy, Hershey Company intends to reduce the number of companies and adjust the scale of the Chinese market, and Hershey Company requires us to terminate the cooperative relationship between the two sides without reason and without early warning notice."
The Jiefang Daily Shangguan News reporter found through the public comment website that there are currently 3 dessert shops in Shanghai with the sign of "Hersheys", which are located in Daning Jiuguang Center, Songjiang Impression City and Pujiang Wanda. At present, all three stores are open as normal, and the clerk said that they have not received any news of the closure. According to people familiar with the matter, these 3 "Hersheys" dessert shops are not operated by Shenzhen distributors in the WeChat public account, so the operation situation has not been affected.
In retail markets such as chocolate, Hershey chocolates in convenience stores in Shanghai shopping malls are also in normal supply. Some media said that the "Hershey Chocolate Jingdong self-operated flagship store" had a product out of stock, but according to the reporter's verification, as of press time, the variety of products facing the Shanghai market is still relatively diverse, but some products are out of stock. People familiar with the matter also said that dessert shops belong to the offline service industry, while chocolate belongs to Hershey brand products, which have different distribution channels and distributors from dessert shops.
Hema and the supply of Hershey chocolate in the supermarkets obtained through Jingdong Dajia and Meituan search
It can be seen that the truth of the so-called "Hershey store closure and withdrawal of cabinets" should be that the brand owner has a dispute with some dealers, rather than the brand saying that it wants to withdraw from the Chinese market.
The market competition is fierce, and foreign brands are also required to change
According to the existing information, it is impossible to restore what happened between Hershey and the Shenzhen distributor, and the business dispute between the two sides may have to go through legal procedures.
But what is certain is that the dispute is related to Hershey's intention to adjust its development strategy in the Chinese market – this is not surprising. Because today's market demand and When Hershey first entered China, it has been turned upside down.
At the beginning of this century, when Hershey first introduced the "kisses" series of chocolates with "small body, big taste" for the Chinese market, there were not many varieties of chocolate in the Chinese market, and there were even fewer imported brands, including Ferrero and Dove, who entered the Chinese market at about the same time. Therefore, with characteristic products and catchy marketing slogans, these imported brands quickly won over Chinese consumers. Data show that since 2014, China has become Hershey's largest consumer market outside the United States.
But in recent years, the choice of China's chocolate market has become more and more diverse, in addition to Hershey, Ferrero, Dove, etc., more and more overseas well-known chocolate brands have begun to enter China, including Godiva, Venchi, awfully chocolate and so on. Not only do they sell finished chocolate, but they also open offline chain stores that serve a variety of chocolate-themed desserts, including cakes, ice cream, drinks, and more. At the same time, some niche and independent overseas chocolate brands have also entered the Chinese market through chocolate theme stores, experience stores and even chocolate theme museums. In addition, domestic chocolate brands, including Daily Black Qiao, are also poised to develop.
With more and more market choices, the current Chinese chocolate market is no longer an era when brands alone can dominate the world. Public data shows that Hershey's performance in the Chinese market has declined since 2015. This can be a lamentable outcome for brands, but it's perfectly normal for a well-competitive market.
Therefore, a number of industry insiders said that in such a market background, it is very normal for Hershey to adjust its business strategy in the Chinese market, "It is very normal business logic to stop the development of undesirable businesses." Not only Hershey, many overseas chocolate brands have undergone business adjustment and business optimization. Of course, the adjustment strategy should deal with the relationship with the dealer. ”
In fact, "closing the store and withdrawing the cabinet" is not without opportunities
In fact, not only chocolate products, for any commodity, any industry, market opportunities are always closely linked to market demand. Taking the Chinese market as an example, on the one hand, there is a broad market space, and on the other hand, there are more and more diversified and personalized consumer needs. These needs include new requirements for the product itself, as well as new habits for the way products are sold and served. Even if it is a classic brand, it must constantly speculate on the minds of consumers and constantly compete for creativity to gain a firm foothold.
In this process, it is normal for brands to adjust their business strategies. Before Hershey, there were also many foreign brands that were rumored to "close stores and withdraw cabinets", but if you investigate deeply, you will find that there are also many successful transformers.
For example, South Korea's LG Group's brand, The Faceshop, which specializes in skin care and makeup, once had more than 350 directly operated single-brand stores in China, but due to the new habits of e-commerce consumption, it closed most of its single-brand stores in 2017 and opened collection stores and increased online operations. More than 4 years have passed, and The Shop has not disappeared from the eyes of Chinese consumers, but has adapted to new consumption habits and gained a new customer base.
Innisfree, a skincare brand also from South Korea, began closing many stores in the Chinese market at the end of last year, with a withdrawal rate of more than 80%. But South Korea's Amorepacific Group, the parent company of the Innisfree brand, said it was optimizing channels and adjusting sales methods according to the new habits of Chinese consumers. The group also revealed that the demand for high-end cosmetics in the Chinese market is increasing, so it brings new products to the Chinese market through the Expo every year. In fact, the adjustment of the brand's business mode according to the market response and even the brand trade-off are the most normal choices.
Also, on January 4 this year, many digital enthusiasts lamented that "BlackBerry is dead", because from that day on, the blackBerry mobile phone's running background has terminated its service, announcing the farewell era of this mobile phone that was once loved by business people and provided a unique 26-letter full keyboard input experience. But what many people don't know is that BlackBerry has been eliminated because it has not rapidly transformed in the tide of smartphones, but it has laid out the automotive operating system since 2010. The new business that was created more than 10 years ago has now become the backbone of BlackBerry's business, and the "BlackBerry QNX System" has a 75% share of the automotive market, so BlackBerry is still alive and well.
It can be seen that in the market competition, "opening and closing" is a very normal thing - the brand that does not do well cannot stay, and only by doing well can it be further developed. For brands, closing stores and even adjusting business lines, although there is some tragedy of heroes breaking their wrists, does not mean that there are no new opportunities. For consumers, there is no need to interpret various store closure information, because there are always new brands that will continue to enter and enrich market choices.
【Reporter's Note】
Market competition is always accompanied by "opening and closing", and it is normal to adjust the strategy, stop loss in time or commit to new business. Of course, the premise is to handle the relationship with consumers and partners according to law before the adjustment, so as to achieve "a beginning and an end, and the closure is auspicious". There is no need to over-interpret the business adjustment behaviors that relieve consumers and partners of their worries.
In fact, consumers in Shanghai can easily feel the market vitality in the "switch-off". Taking chocolate consumption as an example, both imported brands and local brands are given a variety of choices. Judging from a review website, the most popular chocolate consumption stores include chocolate world opened by American brands in Shimao Plaza, The Chook Choco Museum opened by Australian brands in Yuyuan Business District, and handmade chocolate experience stores opened by Swiss brands in Xintiandi, and so on.
In other areas, new options and new experiences are constantly emerging. Statistics show that from May 2018 to August 2020, Shanghai introduced 2351 first stores of various domestic and foreign brands, with an average of 2.4 new stores per day, of which 52 were the world's first stores and 52 Asian first stores, ranking first in the country; in 2021, Shanghai introduced a total of 1078 first stores of various domestic and foreign brands, an increase of 18.6% year-on-year, continuing to lead the country, and more than 3,000 international and domestic brands held new product launches, debuts and first exhibitions in Shanghai that year. The vigorous development of the "first store economy" is the result of full competition in the market, reflecting the vitality and potential of Shanghai to build an international consumption center city.
On the other hand, there will naturally be "out" if there is "in". In fact, in the process of developing the market economy, the entry and exit of the brand are quite common, as long as the "entry" and "exit" according to the law, the market will be tolerant. And from the perspective of consumers, it is more welcome for brands to constantly break through themselves and constantly test new products and services.