(Ecns.cn)--Beginning last month, prices for some mooncakes have soared to unprecedented highs, with a box of the cakes made by Haagen-Dazs, weighing only 1.4 kilograms, costing more than 1,400 yuan ($219).
Guaranteed demand for mooncakes – an "essential" traditional confection eaten during Mid-Autumn Festival – has lured many new competitors to this year's market. Joining the battle for Chinese consumers are foreign companies such as Starbucks, Dove and Dairy Queen, just to name a few.
The companies have adopted advanced marketing strategies that sometimes make it difficult for local companies to compete. For example, upon entering the Shanghai market Croissants de France took out an insurance policy with Ping'an Insurance Company of China, which would allow consumers to claim damages for quality problems. Meanwhile, Starbucks has taken an environmental protection line by packaging their mooncakes in multi-use frosted glass boxes.
Feeling pressed by foreign competitors, domestic bakeries and large food manufacturers have joined the fight, leading to further price hikes this holiday season.
Though briefly overjoyed by the increased variety of choices for mooncakes, consumers have since discovered that the must-eat food for the upcoming Mid-Autumn Day may have gotten "too high to buy."
10 billion in profits
"Prices are higher this year because of rising input costs and the soaring prices of food, rice and cooking gas," said the executive of Shandong-based bakery Jindeli.
Most mooncake makers agree that prices this year are 15 to 30 percent higher than last year because of increased input costs. One 120-gram mooncake with purée, for instance, is now 18 yuan higher than before.
Mooncakes have also become highly profitable, raking in estimated revenue of 10 billion yuan ($1.56 billion) for bakeries, hotels and manufacturers.
As a result, fancy mooncakes flavored with coffee and even chocolate ice cream made by foreign bakeries are storming the market. To compete with higher quality and expensive foreign mooncakes, domestic bakeries are eager to "upgrade" their own versions.
Beijing's Wei Duo Mei, or "Beautiful Taste" bakery, is a prime example. Since 2007, the chain has hired a French chef to re-imagine its mooncakes, with offerings filled with everything from dried Japanese scallops to New Zealand cheese. This year, prices for Wei Duo Mei mooncakes have ballooned by 60%.
