Hans Peter Edelbluth, managing director of Perfetti Van Melle, stands with a display of the products his company creates. CHINA DAILY

Italian-Dutch multinational confectionery company Perfetti Van Melle has a sweet spot for Shanghai, the city it chose to base its regional headquarters back in 1994.

"For a foreign company, one foundation of a successful business is to receive the support of the local government. Shanghai is the right place to be and we are very happy. That was the reason why we chose Shanghai years ago," said Hans Peter Edelbluth, managing director of Perfetti Van Melle in China.

"We have obtained great support from the Shanghai government. They really promote an environment for entrepreneurship and innovation and working on fast moving consumer goods," said Edelbluth.

Perfetti Van Melle is the world's third-largest confectionery manufacturer, coming as a result of a merger between Italian candy company Perfetti and the Netherlands' Van Melle in 2001. It has a wide range of products, such as chewing gum, bubble gum, fruit candy, toffee products and lollipops. These products are distributed in more than 159 countries and regions.

"As a company which produces a lot of new products each year, we need this environment. In other words, Shanghai delivers the perfect setting for our business," he said.

With an annual capacity of more than 100,000 metric tons, its plant in Minhang district, Shanghai, has become one of the company's largest factories in the world.

At present, the company has more than 4,000 employees, 26 offices, and a large distribution network across the country.

"The role of the regional headquarters (in Shanghai) is very important for us. It's a place for business decision-making, for big investments. It's all about capital operations and financial management," he said.

The role of the regional headquarters also includes managing support, technical supply, procurement, marketing services, and logistics supply chain as well as personnel management and training, according to Edelbluth.

"Shanghai is a megacity not only in China but also in the world. It has outstanding infrastructure, an open and diverse culture, and the greatest people. We see Shanghai as a home," he said.

In addition to the advantages of attracting talent from all around China and the world, Shanghai also provides a good consumer environment for the company to carry out market testing, according to Edelbluth.

In recent years, the Shanghai government has devoted itself to the innovation and upgrading of consumption, and the food industry has been earmarked as a key area.

"Consumers in Shanghai are open to innovation and new concepts. And that gives us great opportunities to get feedback and to launch new products and concepts," he said.

Being attuned to the changing market environment, Perfetti Van Melle has adjusted its business model in terms of product development, operation and market channels creation.

For example, with the pandemic making the public more health conscious, Perfetti Van Melle is producing more natural products, such as those with added vitamin C and more fruit.

The growing trend of digitalization has brought big changes to society, and is highlighted in the Shanghai government's latest three-year plan for innovating models of consumption. The government will promote new applications of technology in consumption and accelerate the digital transformation of traditional businesses. It will also support the merging of online and offline businesses and attract more leading companies and innovation service platforms to build relevant industrial clusters. The city government plans to increase its online sales volume to 1.6 trillion yuan (($246.5 billion) by 2023.

"The affinity to digital and online in China is spreading in all age groups. The younger the people, the more they are in to digital," he said. "Digitalization is a channel where we see huge potential."

He noted that the outbreak of COVID-19 has accelerated the development of digitalization.

"I would predict in five or 10 years, nobody's talking online or offline. It's just business. China takes the leading role. It is the most complex and the fastest-moving market," he said.

So far, products sales online take up less than 10 percent of Perfetti Van Melle's total revenue in China, but online sales are growing faster than traditional channels. Such growth will continue in the next three to five years, he predicted.

Edelbluth expressed his confidence in future growth in China, especially in rural areas, where the company plans to deliver more products at competitive prices.

"Our business in first-tier cities, such as Shanghai, Guangzhou and Beijing, is very well developed. But there is room for growth and the bigger growth is coming from the third-tier and fourth-tier cities," he said.

"Distribution is an important factor of our business. With the magnitude of our products, we are delivering to consumers with a good price and a fair value."