Lack of expertise
Chocolate is not a traditional Indian food / snack. It has beenadopted from the West
High entry barriers
Distribution is complex
Cool storage and transportation is very expensive
Unavailability of raw material
Major raw material for chocolates i.e. Cocoa isimported
Lack of government support
Chocolates primarily constitute the impulse-buying category and most of thechocolate brands are placed near the payment counter.In India, chocolates are consumed as excitement / enjoyment and not as snack.Therefore, more than 75 per cent of chocolate purchases are impulse. To influencethis behaviour, retailer/ shopkeeper tries to keep chocolates within reachable(counter) distance. Chocolates are usually kept at or below eye level to facilitatemaximum visibility.
1. Mithai- the traditional Indian sweats is getting substituted by chocolates among upwardlymobile Indians. Instead of buying sweats on Raksha Bandhan, sisters prefer offeringchocolates to their brothers. This is the reason for sudden spurt in advertisement betweenJuly & Sep by most of the companies2. The range and variety of chocolates available in malls seems to be growing day by day,which leads to lot of impulse sales for chocolate companies3. Chocolates which use to be unaffordable, is now considered mid-priced. Convenienceover Mithai in terms of packaging and shelf life in making both middle class and rich Indiansopt for chocolates
4. Designer chocolates have become status symbols. They are linked to one’s aspiration and
lifestyle and malls are perfect points of sale as people usually are happy and gay at thesedestinations5. Cadbury initial communication for Celebrations was concentrated on occasions like Diwaliand Rakshabandhan. Over the last seven to eight years, the brand emerged as a good giftproposition for occasions and enabled people to come closer. Research done by Cadburysuggested that they should extend the plank of occasion-based gifting to social gifting i.e.all-year-round gifting options.6. Consumers can choose from wide range of chocolates, which initially was limited to Milkchocolates like DairyMilk and MilkyBar. In past few years we have seen so many SKUs withalmonds, raisins and all sort of nuts. And how can we forget latest 5 star crunchy and UltaPerk, which has opened new windows for consumers. Cadbury Silk is one slightly expensiveSKU which has picked up.7. In past, consumers had negligible inclination for dark chocolates. But now we have seen achange in the Indian palate, which is increasing the base of this sub-segment. Cadbury isactively promoting bournville for the same reason
Note: Below data corresponds to the market situation in 2008.
1. The chocolate market in India has only three big players, Cadbury, Nestle and Amul