China Market Entry Strategy: A Case Study of Happy Pops' Expansion

This case study examines Happy Pops' potential entry into the Chinese market, focusing on the company's background, target market, and available entry modes. Happy Pops, launched in 2016, specializes in natural ice pops with real fruit and organic cane sugar, offering a healthier alternative to traditional ice cream. The company aims to expand internationally, specifically targeting Shanghai, China. The analysis considers factors such as political stability, ease of doing business, currency risk, and trade relationships to assess the viability of the market entry. The target customers are identified as young people and children aged 11 to 35, belonging to middle to upper-class income groups. The study also explores various market entry modes, including exporting, franchising, joint ventures, and mergers and acquisitions, evaluating their suitability for Happy Pops. Ultimately, the case study provides insights into the challenges and opportunities associated with entering the competitive Chinese ice cream market, valued at USD 10.5 billion in 2017, and offers recommendations for Happy Pops' strategic approach. Desklib provides access to similar case studies and solved assignments for students.

BUSINESS RESEARCH
METHODOLOGY
Student name
Date : 11/20/18

INTRODUCTION-
HAPPY POPS
• The company was launched in 2016,
offering natural ice pops, where the
ingredient include real fruits ,and sugar
from organic cane.
• This is the USP of the company, and
the calories intake is 35-75 per pop,
which is less than the regular ice
creams.
• The company wishes to enter into the
new market internationally.
• The target market for existing
products is shanghai,
China(happypops, 2018).
• The product are ice pops in 35 flavors
which are vegan and dairy free.
• The market entry case will be in favor
of entering into the China market

HAPPY POPS MARKET
ENTRY CASE
E
n
t
r
y
O
b
j
e
c
t
i
v
y
U
n
d
e
r
s
t
a
n
d
i
n
k
e
t
A
n
a
l
y
s
i
s
n
t
r
y
M
o
d
e
(
P
r
e
p
l

MARKET ENTRY OBJECTIVE
Objective •Growth opportunities
•Saturated domestic market
Political Stability •China is a political stable country
•Advantageous for happy pops to target this market
Ease of doing business •According to annual rating of world bank, China is ranked 46 in ease of doing business, among 190 economies in 2018 (hexaresearch, 2018)
Currency Risk •Due to quite stable economy of CHINA, the currency is risk is low.
•The company should invest in this country if this factor is considered
Trade Relationship •The trade relationship of China with other countries are neither too good nor worse.

COMPANY UNDERSTANDING
t
h
e
r
a
t
i
o
o
f
s
w
e
e
t
n
e
s
s
e
c
o
m
p
a
n
y
i
s
o
f
f
e
r
i
n
g
i
e
f
a
s
t
f
o
o
d
c
h
a
i
n
s
,
p
o
p
c
h
i
n
a
a
r
e
o
n
l
i
n
e
,
t
h
r
o
u
Marketing Mix

COMPANY UNDERSTANDING
Target customers
• Demographic Characteristics: Young
people, and children from age of 11 to 35
• Behavioristic Characteristics: Middle to
higher class income group, spending
• Psychographic Characteristics: working
customers, and tourist

MARKET ANALYSIS
• Fragmented market
• Various small scale and large
players in the market
• Highly competitive market
• The vale of market of ice cream
of China in 2017, valued at USD
10.5 billion
• Market size was expected to
grow in near future

MARKET ANALYSIS
Substitute products:
• Sorbet
• Gelato
• Frozen custard
• Frozen yogurt
• Ancient ice cream (as shown in
image)
• Traditional sweet dishes of china :
• Mahua
• Nian gao
• Ginger milk curd
• Song gao
• Custard tart
• Competitors/ players:
• Chinatown ice cream factory
• General MILLS Inc.
• Unilever
• Nestle
• Meiji Holdings Co.

MARKET ENTRY MODE

MARKET ENTRY MODE
Exporting
• Happy Pops can enter into the
Chinese market by directly ort
indirectly exporting to the country
• This mode of the entry would be
less beneficial, since the care for
exporting food item(liaa.gov,
2018)
Franchising
• According to this mode of entry,
Happy Pops can give franchisee to
another group or individual to
trade its products in China, using
goodwill and name of the same
company
• This is a suitable mode of entry
because the management of the
company is done by someone
else(liaa.gov, 2018)

MARKET ENTRY MODE
Joint venture
• Joint venture is entering into the
market with an already
established brand or company in
China
• This will not make company to
make goodwill, good will of
another company can be used to
market goods
• This is most suitable mode of
entry for Happy Pops(liaa.gov,
2018)
Mergers and acquisition
• This mode of entry is combining
with another company to enter
into China. It can be merged and
become one entity or a separate
new company can be formed by
combination of two(liaa.gov,
2018).

REFERENCES
happypops. (2018). Home. Retrieved from happypops: https://happypops.ca/
hexaresearch. (2018). China Ice Cream Market Size and Forecast. Retrieved
from hexaresearch: https://www.hexaresearch.com/research-
report/china-ice-cream-market
liaa.gov. (2018). Ways to enter the Chinese market. Retrieved from liaa.gov:
http://www.liaa.gov.lv/files/liaa/attachments/eu_sme_centre_ways_to_
enter_the_chinese_market_en.pdf
Preplounge. (2018). Market entry could be a possible solution that may not
be obvious in the beginning of a case. Retrieved from Preplounge: https
://www.preplounge.com/en/bootcamp.php/case-cracking- toolbox/identify-
your-case-type/market-entry