In the year 2018, the liquor market in China kept a steady growth. The scale of local manufacturing and sales keep expanding, and the imported market keep increasing at a high speed, and the price and profit keeps growing as well.
With these good achievements, there’s no doubt that China will be a huge and potential market for oversea suppliers. This article will mainly have an analysis on the imported vodka market in China.
Statistics:
At first, let’s have an intuitive understanding that how huge and potential this market is by listing some statistics of the market performance in year 2018.
Data source: China Chamber of Commerce of I/E of foodstuffs, Native Produce and Animal By-products
(CFNA)
| Import volume (L) | Import amount (USD) | Growth rate by volume | Growth rate by amount | |
|---|---|---|---|---|
| Yellow wine | 13,550 | 55,273 | -31.19% | -63.04% |
| Spirits | 83,088,351 | 1,413,119,481 | 13.74% | 24.07% |
| Beers | 822,288,420 | 905,807,975 | 14.79% | 20.66% |
| Wine | 687,492,741 | 2,856,630,448 | -8.26% | 2.12% |
| Others | 12,771,201 | 50,568,219 | 27.99% | 53.63% |
| Alcohol | 1,047,981,464 | 543,812,122 | 3084.91% | 1690.44% |
| Total | 2,653,635,727 | 5,769,993,518 | 67.77% | 21.46% |
| Total except alcohol | 1,605,654,263 | 5,226,181,396 | 3.67% | 10.72% |
| Item | Import volume (L) | Import amount (USD) | Growth rate by volume | Growth rate by amount |
|---|---|---|---|---|
| Brandy | 41,081,357 | 1,055,082,200 | 12.34% | 20.62% |
| Whiskey | 18,936,363 | 173,208,295 | 11.52% | 27.64% |
| Rum and other sugarcane spirits | 2,522,436 | 7,852,659 | -11.12% | -5.64% |
| Gin | 1,329,760 | 5,962,748 | 7.01% | 35.84% |
| Vodka | 5,906,925 | 16,684,219 | 6.93% | 8.82% |
| Liqueur and cordials | 9,195,836 | 46,351,533 | 43.29% | 85.63% |
| Tequila | 1,144,775 | 5,772,438 | 7.37% | -4.21% |
| White spirits | 2,970,899 | 102,205,389 | 22.97% | 47.04% |
| Total | 83,088,351 | 1,413,119,481 | 13.74% | 24.07% |
From the statistics, we can simply make a summary:
- 1. The imported spirits market keeps a rapid growth at 13.74% by volume and 24.07% by amount.
- 2. The imported vodka market keeps a rapid growth at 6.93% by volume and 8.82% by amount.
- 3. The imported volume of vodka account for 7.11% while the imported volume of vodka only accounts for 1.18%, which can generally imply that vodka is mostly sold in large qty but in cheaper price compared with other spirits such as brandy and whiskey.
Reasons Behind
What’s the consumer behavior behind the data and what’s the trend of the market in China? Here we have an analysis from four perspectives.
- With the rapid increase of China economy, more people are becoming a fan of western spirits for different experience. According to the report from Pernod Ricard China, the class with less than 5500 CNY (around 785 USD) monthly salary is rapidly decreasing. While the class with over 25,000 CNY (around 3570 USD) monthly salary has now 36M people. This implies the big opportunities for wine market.
- With the impact of anti-corruption activities in China, the government consumption has dropped seriously. However, more diversified consumers are emerging. More demands are coming from party and social purpose but not only from traditional business occasions. Below we can also find the quantity of bars keeps increasing.
- The sales channels are more diversified, not only limited from bars or night club. Shopping malls, alcohol stores, different e-commerce platforms are all the key players of sales. In some south provinces of China, the sales amount from daytime is already over bars and night clubs.
- The combination of pricing and branding of vodka just meets demand of younggeneration: simple, pure and affordable. And vodka has become one of the standard choices on the menu, no matter drinking by shot or by mixed cocktail.
Challenges:
Still, Chinese Baijiu is the best-selling spirit in the Chinese spirits market. It’s very difficult to grab the consumers who have already been drinking Chinese Bajiu for over decades.
Also, the Baijiu manufacturers are adopting new MKT , faced the rapid growth of impoted spirits Vodka has Brand effect , many giant company are spending lots of money branding It’s quite difficult to let consumers remember another new brand of vodka.
Even Chinese government is doing a lot of effort to manage the market, there are still much fake spirits in the market, which ruins consumer expectation and healthy competition.
Success case:
The ABSOLUT from Pernod Ricard is absolutely a big success in China market. And ABSOLUT is probably the first brand in most of people’s mind when it comes to vodka. And it’s not difficult to understand why they could achieve success from their strategy.
Branding and localization:
ABSOLUT focus much on its branding with the message of fashion, novel and daring, which you can easily feel it by the design on the bottle and billboard. When it comes to localization, Absolut 72 Bian is the first limited edition bottle for Chinese market, inspired by an ancient Chinese fable, “Journey to the West,” a heroic story about the monkey king Sun Wukong, who acquires the power to undergo 72 transformations (or 72 bian). Using his fearlessness and creativity, he is able to overcome all obstacles.
Sales channels upgrade:
In the year of 2016, in order to expand business, Pernod Ricard China set separate traditional market BU and emerging market BU. The traditional market BU focuses on selling high-end liquors among restaurants, bars and night clubs, while the emerging market BU focuses on shopping malls, stores and e-commerce platforms, mainly with ABSOLUT vodka, Ballantine’s whiskey. Now the sales amount of ABSOLUT by e-commerce platforms already accounts for two-digit percentage.
Embracing big data:
In the year of 2018, Pernod Ricard China signed the joint development plan with Tencent, one of the largest Internet service providers, covering the cooperation from competitive pricing, to content joint production and innovation, etc. Pernod Ricard China can fully take advantage of big data from Tencent, deep understand the end consumers, and support its sales and MKT strategy.
Suggestion:
The market is ready now for you to discover, and we provide some advice for your reference.
- Diversified sales channel: Nowadays, no one can promise success relying on single sales channel, you need to find reliable partners to help you find traditional distribution and e-commerce platforms in order to cover more consumers.
- Branding strategy: A shortcut is that you can always learn from the giant leader in the market. ABSOLUT vodka is always a good example to let you learn the vodka trend and inspire you the localized strategy.
- Patience: If you believe that your vodka is really good and competitive, please give patience to Chinese consumers. As there’s a saying goes that, Good wine needs no bush.
