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Chinese Spirits - China - June 2016

Published By :

Mintel

Published Date : Jun 2016

Category :

Alcoholic Beverages

No. of Pages : N/A

The Chinese spirits market developed slowly but is now resilient and shows signs of recovery. Price reduction is not a sustainable tactic for premium baijiu market players to deal with the pressure of anti-extravagance; companies and brands should concentrate on the uniqueness of baijiu to differentiate it from other spirits. To target the next generation of baijiu drinkers, companies and brands should not only opt for packaging innovation, but also diversification such as purchase channels and occasions, to facilitate the decision making of younger consumers. Something to strive for is the progress of customised and personalised baijiu.

Table of Content

Overview

What you need to know
Products/themes covered in this Report

Executive Summary

The market
Figure 1: Retail sales of Chinese spirits, by value, China, 2011-21
Figure 2: Retail sales of Chinese spirits, by volume, China, 2011-21
Key players
Figure 3: Market share, by value of key players in the baijiu market in China, 2015
Figure 4: Market share, by volume of key players in the baijiu market in China, 2015
The consumer
Great majority of baijiu consumers are married
Figure 5: Consumer classification, by marital status, February 2016
High tier city residents favour comprehensive shopping websites
Figure 6: Purchase channels, online channels, by city tiers, February 2016
Socialising with family is the most often baijiu occasion
Figure 7: Purchase occasions, February 2016
Men prefer fragrance variety while women favour premium packaging
Figure 8: Purchase triggers, by gender and age, February 2016
What we think

Issues and Insights

How to stimulate consumer interest in the declining premium baijiu market?
The facts
The implications
How to utilise customisation and personalisation for baijiu?
The facts
How to make baijiu to appeal to younger consumers?
The facts

The Market – What You Need to Know

A gradually recovering current market and a moderately growing future market
The challenges and opportunities for diverse baijiu sectors

Market Size and Forecast

Figure 9: Retail sales of Chinese spirits, by value, China, 2011-21
Figure 10: Retail sales of Chinese spirits, by volume, China, 2011-21
Figure 11: Value and volume retail sales for Chinese spirits, 2011-21

Market Drivers

A declining high-end market – premium baijiu
A rising mid-end market for the masses
A developing niche market – Xiaojiu

Key Players – What You Need to Know

Pricing and product strategies of the leading players
Product innovation through ingredient varieties
Marketing innovation through packaging and social media

Market Share

Yibin Wuliangye Group
Yanghe Distillery Co., Ltd.
Luzhou Laojiao Company Ltd.
Sichuan Jiannanchun Group
Figure 12: Share of value and volume in Chinese spirits retail market, by company, 2014 and 2015

Who’s Innovating?

Growing varieties with both traditional and new ingredients
Figure 13: The ingredient trends of Chinese spirits in China, 2015-16
Figure 14: Dong Fang Jiao Zi Jing Niang Grade Rich and Aromatic Chinese Spirit, China, March 2016; Luzhou 8N Nong Xiang Xing Bai Jiu (8N Aromatic Chinese Spirit), China, April 2016
Figure 15: Jiu Xiang Fang Tao Zao Tao Ping Shao Jiu (Tu Zao Chinese Spirit in Pottery), China, December 2015
Packaging innovation to attract younger consumers
Figure 16: Jovo Jiang Xiao Bai S.300 Dan Chun Gao Liang Jiu (Straight Sorghum Baijiu), China, February 2016
Marketing innovation via social media
Figure 17: The new product develop claims of Chinese spirits in China, 2015-16
Figure 18: Ying Jia Jin Xing Gong Jiu (Jin Xing Gong Chinese Spirit), China, April 2016
Figure 19: Heng Shui Heng Shui Lao Bai Gan (Heng Shui Lao Bai Gan Chinese Spirit), China, November 2015

The Consumer – What You Need to Know

Baijiu is highly valued in Chinese culinary culture
Supermarkets play a dominant role as a purchase channel - foodservice venues in growth
Fragrance variety triggers middle-aged men to purchase while premium packaging entices adult women
Meet the Mintropolitans

Perceptions of Alcoholic Drinks

Baijiu has unique competitive advantages and disadvantages
Food paring of baijiu as a strategy
Figure 20: Correspondence map – Perceptions on alcoholic drinks, February 2016

Consumer Classifications

Older males and females are the ultimate baijiu drinkers
Baijiu consumers are somewhat family-oriented
Figure 21: Baijiu drinkers in the last 12 months, by gender and age, February 2016
Figure 22: Consumer classification, by marital status, February 2016

Purchase Channels

Supermarkets have the highest penetration – increases seen in on-trade
High tier city residents favour online purchase and comprehensive shopping websites
Figure 23: Purchase channels, February 2016 vs March 2015
Figure 24: Purchase channels, online channels, by city tiers, February 2016

Purchase Occasions

Social occasions stimulate the most baijiu purchases
Festival and special occasions are favoured by adult females
Figure 25: Purchase occasions, February 2016
Figure 26: Purchase occasions, by purchase channels, February 2016
Figure 27: Purchase occasions, by gender and age, February 2016
Figure 28: Ying Jia Xiao Ying Jia (Mini Ying Jia Baijiu), China, June 2015

Purchase Triggers

Majority prefer well-known brands with income as a key differentiator
Middle-aged men value fragrance variety while adult women value premium packaging
Figure 29: Purchase triggers, February 2016
Figure 30: Purchase triggers, by monthly personal income, February 2016
Figure 31: Purchase triggers, by gender and age, February 2016
Figure 32: Yibin Wuliangye Fu Gui Ji Xiang Zhen Pin Ji Bai Jiu (Fu Gui Ji Xiang Premium Chinese Spirit), China, January 2016

Buying and Drinking Habits

Flavour and ingredient are main indicators for baijiu consumption
High earners are most likely to buy customised baijiu
Figure 33: Buying and drinking habits in the last 12 months, February 2016
Figure 34: Buying and drinking habits, CHAID – Tree output, February 2016

Mintropolitans

Demographics and characteristics
Lifestyles
Figure 35: Demographic profile of Mintropolitans versus non-Mintropolitans, by gender, age, and marital status, February 2016
Figure 36: Demographic profile of Mintropolitans versus non-Mintropolitans, by monthly personal income, monthly household income, and city tier, February 2016

Appendix – Methodology and Definitions

Methodology
Fan chart forecast
Mintropolitans – Definition
Abbreviations

List of Table

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