The chocolate market in India is pegged at Rs 2,000 crore and is growing at a rate of 18-20 per cent per annum. The global chocolate market is estimated around $83.2 bn. The industry is extremely fragmented in terms of range of products.
The two giants Cadbury with 70 per cent and Nestle around 25 per cent have been instrumental in building up the chocolate market in India with huge investments in product development, advertising and brand building.
The key growth drivers are tradition of gifting sweets in India, shifting in consumer preference from traditional mithai to chocolates, rising income levels and attractive pricing which is suitable for every pocket.
The entry into this market requires a large capital investment for branding and production facilities. Also, facing the major international players with established history and success is difficult.
The key challenges that the chocolate market is facing in India are inflationary pressures on raw material prices, lack of government initiative, high entry barriers due to duopolistic market and price-sensitive consumer.
