Initial success for China KitKat launch in Walmart, says Nestlé

Nestlé introduced KitKat to Walmart in December 2015 through its subsidiary Hsu Fu Chi

Nestlé is positioning KitKat as a big brand in China after launching its top confection into the market last December.

Nancy He, corporate affairs at Nestlé China, told ConfectioneryNews the brand had already proved popular among Chinese consumers.

KitKat made its debut in hundreds of Walmart stores nationwidein  December last year.

The Chinese KitKat was co-designed by Nestlé’s York-based Product Technology Centre and Dongguan R&D Center, and it was manufactured in a Nestlé factory in Tianjin.

Joint venture with Hsu Fu Chi

Hsu Fu Chi (HFC) is one of the largest family-owned confectioners in China, and 60% of its stake was acquired by Nestlé in 2011.

Since the launch of KitKat in China, Nestlé has been using a variety of HFC’s sales and distribution resources to explore KitKat’s potential in the Chinese market, said He.

“The HFC joint venture is a very strong and vibrant partnership. Both parties are very clear that we wish to build a big confectionery business together, and the working relationship enables Nestlé to transfer its vast global experience with the brand and HFC to activate it at a local level.”

Business strategies to market KitKat

Nestlé distributed KitKat exclusively at Walmart in the first year as a test, according to He.

“This [test] enables us to control sales, get real time feedback from the retailer, and work with them to try out a mixture of marketing strategies.”

Nestlé timed the launch for the end of the year as it is a peak time for chocolate sales, He added. “The weather is cooler, and holiday season is just about to begin, and HFC is at its most effective in-store during this period.”

Targeting mainly female consumers ranging from 25 to 35 years old, Nestlé China specifically adapted the classic KitKat to a smaller size to appeal to Chinese consumers, He said.

Initial success and positive outlook

The chocolate market in China is still at its early stages, continued He, but segments such as gifting, sharing and snacking are beginning to grow.

Currently, KitKat classical operates in the snacking market, and sees itself competing with Snickers, Dove and Bueno, according to He.

Having been present in the Chinese market for about four months, KitKat has enjoyed initial success, the company said. Nestlé is also determined to make KitKat a big brand in the future.

“We’re delighted with KitKat’s success,” He said. “Chinese consumers have received the product very well and we are encouraged to continue our roll out.”

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