Coca-Cola Holds 60% of China Soda Market as Cooler Network Beats Pepsi

About two out of every three carbonated drinks in China are Coca-Cola products, with the remaining one a Pepsi product. The two companies have competed in China for more than 40 years, but the gap has not narrowed. According to reporting by Shiqingju of Huxiu, this stable gap stems not from taste or advertising but from sales channels.

According to data from a research firm tracking over-the-counter sales of fast-moving consumer goods, Coca-Cola held a 61.11% share of China’s carbonated drink market in 2024, compared with 29.52% for Pepsi. A year earlier, the shares were 60.6% and 30.3% respectively, so the gap widened. In January 2025, the split stood at 59.88% versus 27.2%, widening further.

Results for the first half of 2026 also confirm the gap. Swire Coca-Cola’s revenue in mainland China reached HK$14.224 billion, up about 9% year on year. Sales volume of carbonated drinks maintained growth. COFCO Coca-Cola also sold 810 million standard cases in the same period, up 9.6% year on year.

Pepsi was not late in entering China. It set up a bottling plant in Shenzhen in 1981. That was just two years after Coca-Cola returned to mainland China. For more than 40 years since, the two have competed with similar products and packaging. They have fought for the same consumers on television, in retail stores, restaurants, and at sporting events.

Pepsi is no weak brand. The Pepsi Challenge conducted in the United States from the 1970s to the 1980s is well known. Using blind taste tests of two colas, it appealed for support for its own product. It later enlisted famous musicians and grew into a global promotion symbolizing a new generation. In 1985, Coca-Cola changed the formula it had protected for nearly 100 years and launched New Coke. Consumer backlash brought the old formula back quickly. This was the period when Pepsi came closest. But in the Chinese market, an extremely stable structure has taken hold.

Widening Gap Between the Two Giants in

China’s Carbonated Market

The gap between the two giants in the Chinese market is not temporary. The share gap widened from 2024 to January 2025. Pepsi’s brand appeal did not change the picture.

Weak demand forms the backdrop. Beverage consumption in China was sluggish in 2024. Coca-Cola’s sales volume in China declined in the second and third quarters. It returned to growth in the fourth quarter. The company’s chief executive officer mentioned the Chinese market on an earnings call. He cited expanded chilled-drink equipment and increased sales investment in key channels.

When two 500-milliliter colas sit side by side on a shelf, price and packaging are close. Few consumers reject one because of a difference in taste. The issue lies in the moment of choice. In restaurants, customers can only drink the brand the owner stocks. In mom-and-pop stores, they can only buy the brand in the refrigerator. The same holds for cinemas, tourist sites, stations, and shops around schools.

Beverage companies have continued unglamorous, costly efforts. These are efforts to bring their own products closer to consumers. Coca-Cola has continued these efforts in China for more than 40 years. Investment in its factory network and cooling equipment is seen as central.

Cooler Cases and Factory Network That Decided

the Outcome

Coca-Cola’s manufacturing and sales in China are handled by two major bottling groups. They are COFCO Coca-Cola and Swire Coca-Cola. The two divide regions and handle manufacturing, delivery, and sales of its products. The number of plants continues to grow.

In 2024, COFCO Coca-Cola invested 1 billion yuan to build a new plant in Shaanxi Province. Swire Coca-Cola started construction on a new 1.25 billion yuan production base in Guangzhou. The plan is to install 11 production lines. Once completed, local production capacity is expected to rise by about 66%.

Equipment close to consumers has also increased. As of the end of 2024, Swire Coca-Cola had more than 1 million sales coolers and vending machines in mainland China alone. They are scattered across retail stores, mass merchandisers, restaurants, and street-corner mom-and-pop shops. For a beverage company, a cooler is not just a cooling device. It determines the first brand a consumer visiting a store in summer sees. The brand lined up chilled leads directly to purchase.

When consumers enter a store in summer, what drink they see first and which one is chilled directly determines the final purchase

Reporting by Shiqingju of Huxiu positions the competition to capture this first glance as decisive. The side whose sales staff visit more mom-and-pop stores and secure restaurants gains the advantage. For a product costing a few yuan, consumers will not search hundreds of meters away. No one cancels a gathering because of a restaurant’s cola brand. The side that enters the cooling network first can reduce opportunities for rivals to be chosen.

Pepsi’s Shifting Position After the Partnership

Pepsi also had its own bottling system. The turning point was the strategic alliance in November 2011. Pepsi and Master Kong announced the establishment of a partnership. It is regarded as the most important adjustment in the Chinese market.

Before that, 24 wholly owned subsidiaries and joint-venture bottling companies operated the beverage business. After the deal closed, Pepsi transferred its bottling business interests to Master Kong. Master Kong became Pepsi’s franchise bottler in China. The division of roles was clear. Pepsi handles brand ownership and marketing. Master Kong handles manufacturing, sales, and delivery of carbonated drinks, Gatorade, and others.

The rationale at the time was clear. Master Kong had a large-scale beverage sales network. In addition to instant noodles, it handled tea drinks, water, and juices. Pepsi could reach store shelves without investing large amounts of its own capital. At the time of the announcement, expanding the nationwide distribution network was set as a key goal.

In 2024, Master Kong’s carbonated drink business saw revenue decline. PepsiCo also noted in its earnings that beverage sales volume in China declined slightly. In the same period, Coca-Cola’s share rose from 60.6% to 61.11%. Pepsi’s fell from 30.3% to 29.52%.

This fact alone does not prove outsourcing was the cause of defeat. Master Kong is one of China’s largest food and beverage channel operators. It has also contributed to broad market coverage. But the paths of the two companies diverged. Pepsi entrusted manufacturing and delivery to its partner and moved closer to brand and product management. Coca-Cola also relies on bottlers. But it has kept the bottling system at the core of the company as a whole. COFCO and Swire handle not only manufacturing but also much in-store work. A long-running system operates between the company, the bottlers, and storefronts.

Diversification Dilutes Weight of Cola Business

The widening product lineup also reflects the difference in distribution networks. In today’s retail stores, Coca-Cola’s presence is not in one place. Sprite, Fanta, and Minute Maid line up together. There are also sugar-free versions and different-size containers. With an established network in place, new products can be channeled through it. Trucks that deliver Coca-Cola can also deliver Sprite. Multiple brands can be displayed in installed coolers. There is no need to build relationships from scratch with distributors that have cooperated for years.

What consumers see is the brand. Distributors see a different logic. Turnover speed, delivery frequency, and promotions drive their decisions. The side with a near-dedicated bottler can more easily stabilize supply to distributors. Master Kong also carries other beverages such as tea, water, and juices. Coca-Cola’s bottlers specialize in its affiliated products. This difference is seen as showing up in handling at storefronts.

PepsiCo as a whole is centered on diversification. It owns food brands such as Lay’s potato chips and Gatorade. The importance of cola in its business mix has declined. Coca-Cola, by contrast, has focused on beverages. It has continued to invest in its bottling system and storefront development. Through diversification, Pepsi is no loser as a company overall. But in cola-only competition, its drive to catch up appears to have weakened.

Moves by domestic brands are also intensifying channel competition. Nongfu Spring and Genki Forest have accelerated cooler installations and distributor expansion. They are competing with Coca-Cola and Pepsi for in-store resources. It is a repeat of the competition 40 years ago when the cola giants fought for the closest spots. In terms of existing system efficiency, Pepsi is assessed as facing the bigger challenge.

Editorial Opinion

On short-term impact. Over the next three to six months, securing cooling equipment and restaurant channels will determine sales. As domestic brands accelerate cooler installations, open space at storefronts will shrink further. Delivery frequency by bottlers and distributors will directly affect share. Product assortment for the peak summer demand season will be tested.

On the long-term view. Over one to three years, efficiency in multi-product supply will become important. Companies that can channel new products through existing networks will recover development costs faster. Expansion of sugar-free and different-size offerings will raise in-store productivity. The presence or absence of a dedicated system will divide distributor support.

Questions from the editorial team. To what extent is channel investment justified in a market where taste differences are small. Can an intermediate form between outsourcing and direct operation work. Can food diversification offset weakness in beverage channels. Verification of these issues is required.

References

• “ 百事可乐为什么打不过可口可乐？ “, by 食情局 — 虎嗅网, 2026-09-21T14:59:10.000Z (ARR)
• Source URL: https://www.huxiu.com/article/4893008.html?f=rss