PepsiCo to Spend $1bn in China

05 November 2008

PURCHASE, New York: PepsiCo will invest an extra $1 billion (€783m; £629m) in China over the next four years, reflecting an increase in marketing activity and the development of products specifically for local consumers.

On a visit to the country, chairman/ceo Indra Nooyi announced that the funds will also be used to build more factories, develop a stronger research and development capacity, and enhance PepsiCo's current sales and distribution operations. 

The plan forms part of the soft drinks giant's broader strategy of targeting emerging economies, and China is already the second largest global market by volume for its eponymous cola brand. 

Among the other sales sectors thought to interest Pepsi are snacks like nuts and rice crackers, as well as increasing the number of cities in which it has a sizeable presence.

Its various brands already hold a 41% share of China's potato chip market according to Morgan Stanley, with products such as Lay's performing strongly in the country thus far.

Nooyi has previously opined: "Where the market growth is spectacular, like China, India and Russia, we are going to keep investing so that when the music stops, we have a great shot at being up there as the leader."

Data sourced from Wall Street Journal Online; additional content by WARC staff