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Coca-Cola originally entered China in 1927 but left in 1949 when the Communists took over the country In 1979 it returned with a shipment of 30000 cases from Hong Kong Pepsi which only entered China in 1982 is trying to be the leading soft-drink producer in China by the year 2000 Even though Coca-Colas head start in China has given it an edge there is plenty of room in the country for both companies Currently Coca-Cola and Pepsi control 15 and 7 of the Chinese soft-drink market respectively The Chinese market presents unique problems For example 2800 local soft-drink bottlers many of whom are state-owned control nearly 75 of the Chinese market Those bottlers located in remote areas have virtual monopolies The Economist 67 The battle for China will take place in the interior regions These areas are unpenetrated as most of the foreign soft-drink producers have set up in the booming coastal cities Chinas high transportation and distribution costs mean that plants must be located close to their markets Otherwise in a country of Chinas size Coca-Cola and Pepsi risk pricing their products as luxury items In China it is easier and politically safer to expand through joint ventures with local bottlers It is expected that in China the company that wins the cola war will win based on the locations of their bottling plants and the quality of the partners they choose The Economist 67 Coca-Cola is bottled at 13 sites across China five of these are state-owned Also Coca-Cola owns 2 concentrate plants in China By 1996 Coca-Cola and its joint venture partners will have invested nearly 500 million in China Pepsi is planning a 350 million expansion plan that will add 10 new plants Both companies are ploughing profits straight back into expansion They reason that any returns will not come until the next centuryBibliographyCoke and Pepsi in ChinaCoca-Cola originally entered China in 1927 but left in 1949 when the Communists
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