Chinese Millennial Women are Driving Growth of China’s Alcohol Market

Millenial Women in China's Alcohol Market

Chinese Women are Raising Their Glasses

China has become the largest market for alcoholic beverages in the world, with an estimated value of US$ 285 million. Increased alcohol consumption in China is being driven by multiple factors. One of the largest factors is increased consumption by women in China—namely millennial women (those born between 1981 and 1996).

This is because habits are changing. In the past, alcoholic beverages were mostly consumed during social occasions where groups of men toasted to each other at the dinner tables. Solitary drinking was rare, and very few women drank. Not anymore. Chinese millennials—particularly women—are embracing casual drinking, purchasing alcoholic beverages for their own consumption.

Chinese Women Consumer Preferences

For Chinese women, there is a strong preference for beverages with lower alcohol content, wine in particular. According to an HKTDC consumer survey, 61% of the female respondents cited “beauty” and 77% cited “health” reasons for drinking wine.

Chinese consumers in general, women included, are heavily influenced by brands. Imported, well-known brands offer them a sense of class and luxury. Although more likely to gravitate toward well-known brands, Chinese millennial women are also willing to try what’s new and novel. This offers an opportunity for new or lesser-known brands. Once a brand has gained their trust, customers tend to remain loyal.

Female Chinese consumers’ purchasing decisions are strongly influenced by their peers. Many discover and discuss products on Chinese social media platforms, such as Weibo and WeChat. Many companies use these platforms to communicate their brand’s story to followers to attract and win customer loyalty.

The Case of Bailey’s

Bailey’s has become one of the popular alcoholic brands for female Chinese consumers. The brand positioned itself as the symbolic drink for friendship among women. During a 2014 marketing campaign targeting young, urban, professional Chinese women, Bailey’s featured stories of girlfriends supporting each other’s pursuits. As a call to action, Bailey’s encouraged its followers to share their own stories of them and their best friends lifting each other up. Thousands of stories were posted on Weibo, a Twitter-like Chinese social networking site.

How to Attract Chinese Women Consumers

  • Brand your Alcohol: The brand needs to go beyond the product itself to craft a lifestyle that consumers crave. The name, design, and story of the product must resonate with young Chinese women.
  • Adopt a Digital Strategy: Chinese social media platforms are critical for branding. The content tells a vivid story of how the consumers can connect to your product. This increases brand recognition, and in the long run, builds customer loyalty.
  • Find the Right Local Partner: A trustworthy local partner can help you position your brand accurately, launch successful marketing campaigns on Chinese social media, and navigate through all the regulatory requirements.


Read more

China’s New-Found Craving for Craft Beer

Craft Beer

A Craft Beer Revolution is Taking Place in China China’s beer market, estimated to be worth 683 billion CNY (108.6 billion USD) by 2019, is the world’s largest beer market by volume, with at least 450 million hectoliters sold per year. For decades, low-end mass-market brews have dominated China’s beer industry. No longer. A craft …

Read more

Small Cities: China’s Largest Untapped Consumer Market

Small Cities in China

Huge Potential Spending Power in Small Cities in China

China’s cities will contribute $7 Trillion to global consumer spending—30% of the total—by 2030, according to McKinsey. That is significant, even for a country as populous as China’s. The country’s largest cities—most notably Beijing, Shanghai, Guangzhou, and Shenzhen—account for an outsized portion of GDP and consumer spending.These 4 cities (referred to as ‘Tier 1’ cities) alone—comprising only 7% of China’s population—produce over 13% of its annual GDP.

Compared to most Chinese consumers, those in these cities are: 1) wealthier, 2) younger, 3) better-educated, 4) more aware of foreign ideas, people, and products, 5) and more open to what’s new and novel. For this reason, many Chinese startups and foreign firms look to consumers in large urban areas when planning how to develop their business in China. For many companies—particularly those in emerging industries or selling luxury goods—this is sensible.

2016 Annual Household Income in China (Thousands USD)

Source: China National Bureau of Statistics (NBS)

Untapped Consumer Market

The country’s ‘Tier 2’ and ‘Tier 3’ cities (e.g. Chengdu) represent, for the most part, the current frontier for most foreign firms in China. Large urban markets that, although not as wealthy as their peers in Tier 1 cities, boast enough middle class and wealthy Chinese consumers to make them a worthy target for companies looking to expand their appeal in China. Together, these cities represent over one-third of the country’s population. This leaves most Chinese consumers—living in small cities, towns, and rural areas—overlooked.

Many firms shy away from these areas for several reasons.

  1. The average income is significantly lower than those in large urban areas. A product of China’s two-speed economy (a high speed coastal region, and low speed interior), this means these consumers are far more price conscious and have less disposable income. Mass market products are best suited for these markets, generally meaning slim per-unit margins for firms.
  2. These areas are less densely populated, greatly increasing the cost of warehousing and distribution.
  3. Consumers in these areas are older than those in large cities and prefer shopping at stores, rather than online.
  4. Many domestic brands are well-established and foreign brands—even if localized—face an expensive uphill battle breaking into these low-margin markets.  As a result, these local markets are dominated by domestic firms and a small number of large foreign firms with the financial wherewithal and strategic patience to overcome these challenges.

Opportunities for Foreign SMEs in Small Cities in China

This is a missed opportunity—particularly for foreign small and medium-sized enterprises (SMEs). Typically, low-cost and mass market goods imply low margins and little profit without high sales volumes. Yet foreign SMEs should view these local markets as an opportunity for two reasons. First, they include over 800 million consumers, collectively. That means there is a lot of room for new entrants and growth. Second, internet penetration and mobile phone use is quite high in China—even in rural areas. This means SMEs can easily reach customers and reduce costs by using e-commerce platforms (e.g. Taobao), marketing via online platforms such as We Chat and Weibo—each with hundreds of millions of active users, and take advantage of the country’s well-developed transportation infrastructure and logistics network via fulfillment companies.

Although each of these charges for their services, fixed costs are very low and variable costs are based on sales value and volume. All these factors make it more affordable for SMEs to enter the mass market in China and more profitable once established. Many experts will continue to focus on China’s large urban markets—and for good reason; however, firms looking to cater to increasingly prosperous Chinese consumers should take a second look at the other half of the country living in small cities and towns.


Read more

Wine in China

Wine in China

Marketing and sales insight into China’s unique wine industry. Learn what the emerging trends are in the wine market in China.

Tencent, China’s Most Valuable Tech Company


It is often said that most Internet and tech companies in China follow a single business model: C2C or “copy to China”. This involves taking a well-received web product in the West and bringing it to the mainland – making full use of the “benefits” of the Great Firewall which prevents local users from accessing social platforms …

Read more

Brewing Demand: Starbucks Beverages in China Market

Starbucks in China

When Starbucks first ventured into the Chinese market in 1999, the opinions, as well as the odds, were against the company. Bringing a coffee franchise to a nation renowned for its tea drinking seemed a fool’s errand. 18 years later, Starbucks is operating over 2,000 stores in 100 cities across the country. How did the …

Read more

The Key to Success in China: the Alibaba Story


For anyone doing business or shopping in China, Alibaba is a household name. The firm’s online e-commerce platforms offer anything from heavy machinery to light apparel. The company boasts the biggest IPO in the world, generates more revenue than Amazon and eBay combined and its founder, Jack Ma, topped the list of China’s richest billionaires …

Read more