Rival conglomerates Unilever and Nestle are scrapping for their shares of China's ice cream market, even as competition increases from a number of new and established local players. China's ice cream market, estimated by the China Association of the Bakery and Confectionery Industry to have been worth 23 billion yuan ($ 2.78 billion) in 2002, and projected at 40 billion yuan annually by 2006, is currently led by the two foreign companies.

Anglo-Dutch Unilever, which has 10% of the market, is said to be spending 150 million yuan to promote its popular Wall's ice cream brand this year. Ken Donaldson, head of Switzerland-based Nestle's ice cream business in China, said his company's investment would also be higher than last year's. But native firms are looking to challenge their foreign competitors.

Beijing Sanyuan Foods Co. Ltd., for instance plans to

enter the domestic market by cooperating with Beijing Allied Faxi Food Co., the local producer of the San Francisco-based Bud's Ice Cream.