Page 284 - 2018 White Paper on the Business Environment in China
P. 284
8 White Paper on the Business Environment in China
Large corporations such as Molson Coors Brewing Co., offenses that cause very little harm to society should
SABMiller and others largely dominate the Western not be considered crimes and thus be exempt from the
alcoholic beverage market in China. Of course, Chinese penalties set out for dangerous driving in the Criminal
consumers lead the world in alcohol e-commerce. Law (China Daily).
According to figures from global E-commerce analytics
firm Profitero, 27 percent of consumers in China have To say the least, during the five years through 2017,
purchased alcohol over the Internet, compared to a the beer production industry underwent significant
global average of only 8 percent (Morton). change. High levels of foreign investment and greater
numbers of joint ventures with foreign firms led to
Nielsen data show that the current liquor market strong technological advances and higher output levels.
is in the pick-up stage. 2016 liquor sales in stores and According to IBISWorld, in the five years through 2017,
supermarkets channel have reached 4 percent of sales industry revenue has been increasing at an annualized
growth. From the perspective of alcohol consumers, 51 rate of 0.6 percent to an expected $28.2 billion (IBISWorld,
percent of the people who drink alcohol in the past year Beer), but according to Euromonitor, the overall beer
have been drinking liquor. Among them, consumers aged market in China has declined 6 percent in volume since
between 26 and 35 spent most on liquor (Nielsen). “We 2013. Beer pricing on the mainland is evolving, with
are seeing that product innovation, precision marketing unit prices becoming more affordable and consumers
and channel expansion as the top three growth drivers showing preference for superior brands. As the Chinese
in emerging liquor markets,” said Minnie Yu, Director, economy slows, mid-market brands like Tsingtao are
Nielsen China. squeezed, according to Shaun Rein, Managing Director
of China Market Research Group. Some consumers are
The Chinese have acquired a strong taste for whisky looking for lower-priced beers, he said, while more
particularly in the modern, cosmopolitan centers. Western affluent Chinese are switching to pricier craft beers or
spirits currently account for less than 2 percent of the total wine (Einhorn, Chan, and Hyuga).
Chinese beverage market, but the market’s potential is
huge.Whisky is fast becoming a strong indicator of status in China is projected to take over second place in
a country pre-occupied with social standing. The branding global wine sales by 2020, besting both France and the
of whisky labels is effectively tapping into this Chinese U.K., yet ranks only 36th in the world on a per capita
attitude. In China, bottles are so often displayed on tables consumption. China’s wealthy still prefer prestigious
that some establishments don’t bother offering alcohol by foreign wines to domestic brands. More than 20 percent
the drink. Drinking specific brands displays both wealth of wine consumption in China is of imported brands.
and prestige. New brands to the market will need to tap China wine consumption per capita was about 1.2 liters
into this image of quality. Discerning Chinese drinkers are in 2015. China imported more wine by volume and
prepared to pay a real premium for a quality brand and value in 2016. The total value of wines that entered the
are flexible and adaptable when it comes to embracing Chinese market jumped by almost 30 percent, according
different tastes, flavors and cultures from around the globe to China Association for Import and Export of Wines and
(Gentlemen, Whisky). Spirits. Not only is per capita consumption rising, but the
way the Chinese drink wine is changing. Sophisticated
China overtook America to become the world’s biggest and educated women in China’s metropolitan areas
market for beer by volume in 2001, drinking down one in are beginning to order white and sparkling wines. The
every four beers consumed in the world, but consumption number of Chinese wine drinkers is around 38 million. In
per person peaked in 2013 and dropped further in 2016. other words, a very small percentage of China’s 1.4 billion
One reason is that Chinese drinkers are turning away people drink wine. The task confronting wineries is to
from cheap local brews towards premium products lure a greater percentage of the Chinese population into
and imported beers. Also banning drunken driving and the wine fold. Chuan Zhou, of Wine Intelligence, believes
open-air barbecues contributed to a downturn in the that the future of wine consumption in China lies in the
industry. In 2011, China enacted legislation that made younger female population, who account for 50 percent
it a criminal offense to drive with a blood alcohol level of the nation’s imported wine drinkers. According to Zhou,
above 80 milligrams per 100 milliliters. However, in 2017 Chinese women drink wine primarily for health reasons,
the Supreme People’s Court issued a pilot guideline followed by the way drinking wine makes them feel about
on the penalties for drunken driving, stipulating that themselves: sophisticated and successful (Radic).
284
Large corporations such as Molson Coors Brewing Co., offenses that cause very little harm to society should
SABMiller and others largely dominate the Western not be considered crimes and thus be exempt from the
alcoholic beverage market in China. Of course, Chinese penalties set out for dangerous driving in the Criminal
consumers lead the world in alcohol e-commerce. Law (China Daily).
According to figures from global E-commerce analytics
firm Profitero, 27 percent of consumers in China have To say the least, during the five years through 2017,
purchased alcohol over the Internet, compared to a the beer production industry underwent significant
global average of only 8 percent (Morton). change. High levels of foreign investment and greater
numbers of joint ventures with foreign firms led to
Nielsen data show that the current liquor market strong technological advances and higher output levels.
is in the pick-up stage. 2016 liquor sales in stores and According to IBISWorld, in the five years through 2017,
supermarkets channel have reached 4 percent of sales industry revenue has been increasing at an annualized
growth. From the perspective of alcohol consumers, 51 rate of 0.6 percent to an expected $28.2 billion (IBISWorld,
percent of the people who drink alcohol in the past year Beer), but according to Euromonitor, the overall beer
have been drinking liquor. Among them, consumers aged market in China has declined 6 percent in volume since
between 26 and 35 spent most on liquor (Nielsen). “We 2013. Beer pricing on the mainland is evolving, with
are seeing that product innovation, precision marketing unit prices becoming more affordable and consumers
and channel expansion as the top three growth drivers showing preference for superior brands. As the Chinese
in emerging liquor markets,” said Minnie Yu, Director, economy slows, mid-market brands like Tsingtao are
Nielsen China. squeezed, according to Shaun Rein, Managing Director
of China Market Research Group. Some consumers are
The Chinese have acquired a strong taste for whisky looking for lower-priced beers, he said, while more
particularly in the modern, cosmopolitan centers. Western affluent Chinese are switching to pricier craft beers or
spirits currently account for less than 2 percent of the total wine (Einhorn, Chan, and Hyuga).
Chinese beverage market, but the market’s potential is
huge.Whisky is fast becoming a strong indicator of status in China is projected to take over second place in
a country pre-occupied with social standing. The branding global wine sales by 2020, besting both France and the
of whisky labels is effectively tapping into this Chinese U.K., yet ranks only 36th in the world on a per capita
attitude. In China, bottles are so often displayed on tables consumption. China’s wealthy still prefer prestigious
that some establishments don’t bother offering alcohol by foreign wines to domestic brands. More than 20 percent
the drink. Drinking specific brands displays both wealth of wine consumption in China is of imported brands.
and prestige. New brands to the market will need to tap China wine consumption per capita was about 1.2 liters
into this image of quality. Discerning Chinese drinkers are in 2015. China imported more wine by volume and
prepared to pay a real premium for a quality brand and value in 2016. The total value of wines that entered the
are flexible and adaptable when it comes to embracing Chinese market jumped by almost 30 percent, according
different tastes, flavors and cultures from around the globe to China Association for Import and Export of Wines and
(Gentlemen, Whisky). Spirits. Not only is per capita consumption rising, but the
way the Chinese drink wine is changing. Sophisticated
China overtook America to become the world’s biggest and educated women in China’s metropolitan areas
market for beer by volume in 2001, drinking down one in are beginning to order white and sparkling wines. The
every four beers consumed in the world, but consumption number of Chinese wine drinkers is around 38 million. In
per person peaked in 2013 and dropped further in 2016. other words, a very small percentage of China’s 1.4 billion
One reason is that Chinese drinkers are turning away people drink wine. The task confronting wineries is to
from cheap local brews towards premium products lure a greater percentage of the Chinese population into
and imported beers. Also banning drunken driving and the wine fold. Chuan Zhou, of Wine Intelligence, believes
open-air barbecues contributed to a downturn in the that the future of wine consumption in China lies in the
industry. In 2011, China enacted legislation that made younger female population, who account for 50 percent
it a criminal offense to drive with a blood alcohol level of the nation’s imported wine drinkers. According to Zhou,
above 80 milligrams per 100 milliliters. However, in 2017 Chinese women drink wine primarily for health reasons,
the Supreme People’s Court issued a pilot guideline followed by the way drinking wine makes them feel about
on the penalties for drunken driving, stipulating that themselves: sophisticated and successful (Radic).
284
