Multiple news media such as Beijing Business Daily, China Fund News, and Caixin.com reported that Hershey has stopped offering products on Chinese e-commerce platforms Tmall and Jingdong. In addition, many of its offers on JD.com were also out of stock.
This has raised speculations that the U.S.-based chocolate brand was joining other foreign companies in leaving the Chinese market.
However, according to Red Star News, Hershey’s said there had been no withdrawal plan. The Pennsylvania-based company explained its operation on Jindong stalled because high demand during the Chinese New Year had emptied stocks.
The company said it was working with distributors to solve supply problems, and supplies could return by the end of the holiday.
Regarding the flagship store on Tmall, Hershey said it stopped operation for a renovation process, and the new official flagship store can debut at the end of February.
Xiwang Zhisheng news agency reported that the staff of the Hershey Dessert Store said in an interview that since 2020, the Shanghai company in China has started laying off staff and reducing business in the Chinese market.
The WeChat account of Hershey’s Dessert Concept Store in China posted in January that Hershey’s had adjusted its development strategy in China. It intended to reduce its headcount and revise the scale of the Chinese market, withdraw its counters, and close its stores. The updates added that Hershey’s legal person had left China.
The last message on Hershey Chocolate’s official Weibo account was released on Jan. 28 and has not been updated.
According to its financial report that year, Hershey’s global net sales were nearly $8.15 billion, a year-on-year increase of 2%. Its organic constant currency net sales also rose by 2% year on year. However, sales in the Chinese market fell by 46%, including an 82.2% decline in the fourth quarter.
China’s advantage as the world’s foundry has rapidly eroded in recent years. The increasingly complex competition and regulatory environment, in addition to the COVID-19 pandemic since 2020, has prompted a wave of international companies’ departure from its market.
US Fortune 500, Stanley Baxter, Philips, Samsung, Nokia, Epson, Sony, Seagate, Omron, Citizen, Nitto Denko, and other world-renowned companies have closed their factories in China. As a result, many jobs with high wages and good benefits have moved to Vietnam, India, and other places.
In January of this year, Japan’s Canon, which has run a factory in Zhuhai city for 32 years, announced the plant’s closure, indicating that Canon had relocated its primary digital cameras business out of China.