23 February 2019
A Shanghai baking shop claims to have made the world's largest mooncake which weighs 2.28 tons. Photo:
A Shanghai baking shop claims to have made the world's largest mooncake which weighs 2.28 tons. Photo:

The economics and politics of mooncakes

Small cake, big business.

It is that time of the year when we share the traditional Chinese pastry at family gatherings and celebrate friendship with business partners. It’s the Mid-Autumn Festival, the Chinese (and Korean) version of Thanksgiving Day.

The boxes of mooncakes we give and receive are a big and lucrative business in Hong Kong and China. This is evident from the big players getting bigger and the number of players also getting bigger.

The business is a billion dollar sweet market.

There are the traditional lotus seed paste with two egg yolks by Maxim’s, Kee Wah, Wing Wah and St Honore. Then there are “snowy” mooncakes from Taipan and custard mooncakes from Peninsula. All three markets are dominated by famous cake shops or Chinese restaurants.

There is a fourth new market created by international brands such as Starbucks, TWG, Haagen Dazs, Agnes b, and even Angry Birds.

I am not including the mainland mooncake market because it probably warrants special academic research, especially under the current anti-graft era. (In the past, iPhones were wrapped under mooncake boxes.) There are also interesting crossovers such as mooncakes which come packaged with abalone and dried scallop, tea leaves, ginseng and bird nest.

In the past few years, the snowy mooncake which tastes like ice-cream and custard mooncake which tastes like egg pastry seem to be gaining market share.

Most notably, Spring Moon Chinese Restaurant of the Peninsula Hotel grabbed headlines when it raised prices for its mini custard mooncake by 88 per cent to HK$485 per set. They sold out like ice-cream in July.

Mooncakes have been a best-kept secret growth driver for Hong Kong & Shanghai Hotel, accounting accounted for over 10 per cent of its profit of HK$440 million in 2013, according to some estimates.

The hotel group said in its annual report last year that mooncake sales “continued to see substantial growth” and was a major contributor to a HK$27 million increase in its merchandising division of HK$153 million.

It is also a classic case of how Peninsula, which is estimated to produce over 60,000 boxes of mooncakes in 2013, capitalized on its brand.

Interestingly the mooncake market has been unaffected by concerns about health and the environment.

Just yesterday, local papers warned of over-eating the high caloric, sugar-laden and fat-rich mooncake, some of which is equivalent to three bowls of rice.

And despite repeatedly calling for recycling of the millions of tin boxes, the government was only able to collect 25,000 boxes last year.

There must be a certain correlation between mooncakes and the Chinese style of democracy.

In the 1980s, the typical mooncake contained one yolk but the number of yolks rose to a maximum of four and then dropped to three. Now, two eggs are the standard of the traditional mooncake.

If we substitute “yolks” (which literally means “king of the egg”) with the number of chief executive candidates, you also get a fairly good picture of the democratic history in relation to the potential candidates under universal suffrage.

Now, let’s put politics aside. Have a happy Mid-Autumn Festival!

Related stories:

Is there paper inside? How mooncakes can be a political tool

Mooncake makers cash in on strong demand

The mooncake coupon economy

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EJ Insight writer

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