Beer represents 75% of the total amount of alcohol consumption (by volume) in China.
To succeed in this lucrative market, knowledge of the consumer segmentation is important, Mersol & Luo ensures you are prepared, educated and strategic when considering China as your next market to enter.
Beer Market Segmentation in China
Mass-Consumed Beers
These locally brewed beers are mostly lagers, with low alcohol percentage (around 3%). Currently, the largest local brand names in China are Snow, Tsingtao, Yanjing and Harbin. The low price allows for consumption across all income levels. Most drinkers prefer to sip them while having meals.
New generations of Chinese beer drinkers are becoming more adventurous in trying foreign brews, while mature consumers remain loyal to domestic beers. Whether in the North or South, consumers still prefer the trusty Snow or Yanjing, with an occasional Budweiser or Carlsberg.
Leisure Beers
In years past, the Chinese’s expectation of quality has increased, this focus has opened many opportunities for foreign breweries. Leisure beers have higher alcohol content and are more expensive than local brands. Urban and high-income consumers prefer to drink them at home or in bars, as standalone or accompanied by finger foods.
This market segment took the largest part of the total beer import in China in 2017. It is a growing market that is expected to bloom in the coming years as beer is imported into China at unprecedented rates to meet the growing demand.
Craft Beers
This market has grown significantly due to the drinkers’ shift from macro/mass-consumed beers to more premium and craft flavors. Craft beers’ rise in popularity is mainly attributed to the millennials and the growing middle class in China. They are usually consumed either with Western-style meals or as stand-alone beverages.
These beers are quite expensive compared to the other two segments, but have quite a loyal following. Currently, there are few options in the market. Most of the available ones are acquired and distributed by Anheuser-Busch InBev, the world’s largest beer producer. Cities like Beijing, Shenzhen, Guangzhou and Shanghai are home to a number of local foreign-owned and Chinese-owned micro-breweries.
Marketing Strategies for Breweries
Most Chinese consider the taste of a beer as their primary reason for choosing it, followed by price point and accessibility. Brand loyalty is very much present among more mature drinkers, while younger drinkers are known for frequently switching brands. For less popular breweries, this lack of brand awareness among millennials is a huge opportunity.
The Chinese consumers often have the misconception that all foreign beers are bitter, like German dark beer and India pale ale, when in fact, there are those with mild, fruit and crisp tastes, appropriate marketing and consumer education helps to reach the skeptical.
Small breweries tend to have more success by focusing on a local community, by forming partnerships with a local store or restaurant this helps to make the products more accessible to buyers.
Beer festivals and in-store tastings are effective in promoting products, but standing out among competitions can be a challenge. Social media advertising has become a powerful way to reach all types of consumers, especially in creating brand awareness. It should be noted that often times the social media platforms that are popular globally are not utilized in China, such as Facebook and Google products.
Nowadays, Chinese consumers buy almost everything online. 30% of their purchases are done using online platforms. Companies benefit from having an online store, but they must maintain a good e-reputation. Giving out rewards and coupons to entice buyers can boost sales and loyalty.
Closing Thoughts
With China’s beer imports growing by double digits every year, the right time for foreign companies to tap into its beer market is now. Having a clear market development strategy and roadmap developed by Mersol & Luo specific to Chinese consumers’ preferences is the first step in successful importing.
