Blog

Branding China: Nespresso strategy in China

[See more about coffee market in China]

Nespresso, affiliated to Nestlé, is a company specialized in making and selling coffee capsules and coffee machines. Already well-established in Europe, Nespresso shifts its target to the Chinese market. With only 4 cups of coffee per person yearly in China, the concept of coffee capsules is rarely known in China. Our focus is on Nespresso strategy in China.

Nespresso is a pioneer in China for advanced coffee brand

Unlike its huge success and brand recognition in Europe, Nespresso in China had a very tough beginning. With a general knowledge of coffee rather low among Chinese consumers, Nespresso made a very clear target that is the people who studied or worked abroad and who had some knowledge about high-quality coffee. Though the percentage is very small, based on the large population, the absolute number is very enormous. Coffee, especially capsule coffee, is considered fresh and fashion among young white-collar Chinese. More than 60% of people who purchased Nespresso do it for professional usage, creating a stylish and international environment. Ranging from 1000RMB ($160) to 5000 RMB ($800) for Nespresso coffee machine, it is considered as a luxury for the ordinary family. “We made the best coffee”, explained by Jean- Marc Duvoisin, CEO of Nestlé Nespresso SA, “ only 2% of coffee beans collected can be used as our Nespresso coffee”. With an average annDaxue Consulting – Market Research China all growth of 30% globally and 201 stores in 50 countries, he believes that the same business and branding strategy model will be successful in China soon.

Nespresso in China: education of the consumer to Chinese consumption

During interviews between international golf and Manuel Sancho, the general Manager of Nespresso in Mainland China said that the branding strategy is a reputation-oriented one. They welcome shoppers to their store, educate them about knowledge of coffee, have a taste of Nespresso for free. Unlike the Europeans who already knew which flavor they like, much Chinese do not know their preference. Then the staff will tell the customers what flavor they want and what kind of coffee beans they should buy. So what Nespresso would like to offer is not only a place to sell the products but also an education center where anyone can come and gain knowledge about coffee and its various kinds. It’s a long-term strategy to promote Nespresso in China. He thinks, just like the market for wine, the market of coffee will keep evolving, what Nespresso wants, is to cultivate some Chinese customers who could really appreciate the taste of coffee and enjoys making and drinking coffee at home or at work. As for the future, Nespresso will launch more limited editions of coffee machines, probably in cooperation with Chinese designer and Chinese artists.

Nespresso in China, brand recognition in China

References:

http://online.wsj.com/news/articles/SB10001424127887323463704578497350657159118

http://www.nespresso.com/cn/cn

http://marketingtochina.com/nespresso-in-china/