Management summary

About Asia Trade (2009) devotes itself to customised trade consultancy for European companies with
interest to develop business in China. About Asia Trade offers research-based services to determine the
market entry for China. Due to changes in the external environment, feedback from business partner and
feeling of the management the research questions arose: What are relevant factors for European candy
producers when entering the West Chinese candy market?

In order to fully answer the research question, four different methods of research have been used: a
literature study on the market, interviews with the Chief Representative of the Netherlands Business
Support Office Chengdu, the Principal of R&P Lawyers in Shanghai, the Managing Director of About Asia in
Chengdu, photographs of foreign candy in the retail markets in West China and a survey among the target
audience. This resulted in a description on trends and developments in the Chinese market in its entirety
in Chapter 4, an examination on the structure of the West Chinese candy sector in Chapter 5, a statement
of the rules and legislations where companies have to comply with in Chapter 6 and information on the
target audiences preferences in Chapter 7.

The Chinese market is changing drastically whilst trends are in favour of European companies. Cities
grow, incomes rise, the local government supports foreign investments and the demand for European
brands and Western candy increases. There is a strong combination of gift culture and collectivistic values
in the Chinese society. The volume of the candy market is expanding and will continue to. As the sector
expands and candy consumption increases, new trends appear regarding products characteristics such as
growing focus on health, ecotype, origin and food safety. In the meantime the market is scattered with no
clear-cut market leader and an absence of candy stores which paves the way for new business
opportunities. When making entry to the West Chinese market, a business partner is compulsory in able
to be allowed to import and distribute candy. Products adjustments need to be made and commodities
needs to be approved by the AQSIQ. Furthermore it is crucial to register trademarks as promptly as
possible. As soon as these formalities are done, a bright feature awaits newcomers. The preference for
European producers is high and almost all every West Chinese sees European candy as a suitable gift for
family, friends or colleagues. And with more than half of those with interest in European brands willing to
pay over 100 RMB for a gift box of candy, margins are high.

First and foremost, before doing any public market research or contacting possible business partners,
register all trademarks of the company at the Chinese authorities. Subsequently focus the sale of candy on
the flavours fruit, milk and mint. Customize gift boxes to special events in order to respond to and interact
with the gift culture and collectivistic values as well as the conviction of the West Chinese that European
candy is a suitable gift for friends, family or colleagues. Introduce a type of candy with focus on healthy
characteristics, quality and the European heritage. Set up price levels around 250 RMB. Aim promotional
communication, with emphasis on the healthy, luxurious, high-quality and European product aspects on
women as they have a stronger interest in European brands. Furthermore make use of the services from
the local government, business support offices and find a business partner with expertise and skills on
importing and distributing candy in West China. This partner can assist during import procedures.

Direct consequences of this study depend mostly on what choices will be made. The consequences
regarding costs for registering trademarks will be a minimum of 30,000 RMB. Further costs in terms of
money depend on what fees business support offices charge and what agreements will be signed with
business partners. Other costs like company, production or distribution costs are not included in this
research. The consequences regarding time will be a minimum of 25 working days in order to register
trademarks, customs declaration and commodity inspection where costs for finding a business partner,
getting into contact with the business support office and shipping time are not taken into consideration.