CHINA: Coke looks to realise Chinese potential - report

Coke has witnessed sales volumes in China increase during its second quarter and plans to focus on investing in the market for the future, according to reports.

The company saw sales volumes rise 18% in China during Q2, a senior Coca-Cola executive in the region said in an interview with the Atlanta Journal over the weekend. Despite the country having not historically been a major contributor, further investment is imminent.

Coca-Cola Pacific deputy group president Paul Etchells told the paper: "We're very much still in an investment mode in China in terms of building the business and building brands. We do make money in China, our bottlers make money in China, but it's not one of the largest profit contributors to the Coca-Cola Co. at this stage. We're very much investing for the future."

Etchells told the paper that the reasons for China having previously been a difficult market to crack have been based upon several factors, such as "a significant proportion of the population doesn't make enough money to be able to drink soft drinks regularly".

Etchells added: "TV advertising in China is actually quite expensive in worldwide terms. That obviously provides incentives to look at other forms of marketing to consumers and in-store marketing. Going back to this point about the lack of brand loyalty, because of that, a lot of Chinese consumers don't seem to make a decision until they are actually in-store and they are quite heavily influenced by what's going on in the store in terms of displays and what's on offer and how intriguing the point of sales materials are."