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Spirits - China - September 2013

Published By :

Mintel

Published Date : Oct 2013

Category :

Alcoholic Beverages

No. of Pages : 250 Pages


High earners’ tendency to drink spirits during wider occasions, reflects the necessity for the high-end spirits brands to explore other occasions instead of concentrating on the gifting market. High-end baijiu brands could benefit from exploring a positioning as an indulgence by highlighting the pleasure of enjoying the products. Meanwhile, further premiumisation strategies could help Western spirits brands to tap into the high-end market, with the vast majority of high earners drinking Western spirits in the 12 months to July 2013.
TABLE OF CONTENT

Introduction
Definition
Report structure
Methodology
Abbreviations

Executive Summary
The market
Figure 1: China spirit market, value sales, 2008-18
Companies and brands
Figure 2: Market shares of leading spirits manufacturers in China, by value, 2010-12
Yibin Wuliangye Co., Ltd.
Kewichow Moutai Co., Ltd.
Hubei Daohuaxiang Group
Diageo Plc
Pernod Ricard S.A.
The consumer
Chinese baijiu dominates the spirit market
Figure 3: Types of spirits consumed in the past 12 months, July 2013
Chinese consumers shows strong interest in new drinks amid health concerns
Figure 4: Spirits drinking habits, July 2013
Western spirits are more likely to be purchased from on-trade channels
Figure 5: Purchase channels of baijiu and Western spirits in the past 12 months, July 2013
Important features of spirits when gifting depend on recipient
Figure 6: The most important factors for buying spirits as gifts, July 2013
Attitudes towards buying spirits as a gift
Figure 7: Attitudes towards buying spirits as a gift
General attitudes towards spirits
Figure 8: General attitudes towards spirits, July 2013
Key trends
Targeting female drinkers becomes increasingly important for growth
The future of the high-end market
Gift-giving and spirit market
Online retail channels: reaching prospective consumers more effectively
What we think

The Market
Key points
Market size and forecast
Spirit market doubles in size from 2008-13
Figure 9: China value and volume retail sales of spirits, 2008-18
Growth rates expected to slow
Figure 10: China spirit market, value sales, 2008-18
Figure 11: China spirit market, volume sales, 2008-18
Market segmentation
Figure 12: China spirits market value sales by segment, 2008-13
Market drivers
From mingjiu (famous spirits products) to minjiu (spirits products for ordinary consumers)
The golden decade of baijiu market
The plasticiser scandal
Government introduces anti-extravagance campaign in 2012
The transformation of the baijiu market
The transformation from an investment-led economy to a consumption-driven one
Figure 13: The growth rate of GDP and total retail sales of consumer goods, 2008-12
Fighting the counterfeits
Serious concerns over counterfeits
Fighting the counterfeits and fake spirits
Growing demand among women
Standardisation of aged baijiu segment

Companies and Brands
Key points
Brand share
Figure 14: Market shares of leading spirits manufacturers in China, by value, 2010-12
Advertising and innovation
Johnnie Walker and its campaigns
‘Keep walking’ campaign embraces social media and targets young consumers
The controversial ‘change the game’ campaign brings Johnnie Walker under the spotlight
Bailey’s and its Guimi (sisterhood) Day campaign
Companies
Yibin Wuliangye Co., Ltd.
Kewichow Moutai Co., Ltd.
Hubei Daohuaxiang Group
Diageo Plc
Pernod Ricard S.A.

The Consumer – Spirit Usage
Key points
Drinking occasions
Figure 15: Different types of spirits consumed in the past 12 months, July 2013
Figure 16: Repertoire of spirits consumed in different occasions in the past 12 months, July 2013
baijiu
Figure 17: Occasions when drinking Chinese spirits in the past 12 months, July 2013
Women are more likely to drink Western spirits than baijiu
Figure 18: Types of spirits drunk in the past 12 months, by gender, July 2013
Baijiu is more appealing to consumers in their forties
Figure 19: Types of spirits drunk in the past 12 months, by age, July 2013
Income level has little impact on the penetration of baijiu
Figure 20: Types of spirits drunk in the past 12 months, by personal income, July 2013
Higher educational background leads to a higher penetration of Western spirits
Figure 21: Types of spirits drunk in the past 12 months, by education background, July 2013
Western spirits
Affordability is a key barrier to usage across different types of Western spirits
Figure 22: The correlation between Western spirit usage and demographic factors, July 2013
Whiskies and gin are losing in the young consumer segment
Brandies are more popular as drinks for business purposes
Older consumers are more willing to try different types of Western spirits
Figure 23: Repertoire of types of Western spirits drunk in the past 12 months, by age, July 2013

The Consumer – Purchase Channels of Spirits
Key points
Purchase channels of baijiu and Western spirits
Figure 24: Purchase channels of baijiu and Western spirits in the past 12 months, July 2013
Drinking habits
Figure 25: Spirits drinking habits, July 2013
Health concerns curb spirits usage…
especially among low earners
Strong interest in new drinks…
peaks among top income consumers

The Consumer – Important Factors for, and Consumers’ Attitudes towards Buying Spirits Gifts
Key points
Important features of spirits when gifting depend on recipient
Figure 26: The most important factors for buying spirits as gifts, July 2013
Flavours take the lead when buying spirits as a gift for family members or close friends
Figure 27: The most important factors for buying spirits as a gift for family members or close friends, July 2013
Premium packaging is the most important factor for buying spirits as a gift for business purpose
Figure 28: The most important factors for buying spirits as a gift for business purpose, July 2013
Attitudes towards buying spirits as a gift
Figure 29: Attitudes towards buying spirits as a gift, July 2013
Stereotypical image limits the appeal of baijiu
Figure 30: Selected attitudes towards buying spirits as a gift, by age, July 2013
but greater awareness of the traditional drink works in its favour
Figure 31: Selected attitudes towards buying spirits as a gift, by city tier, July 2013
Consumers expect local tailoring from Western brands

The Consumer – General Attitudes towards Spirits
Key points
Widespread concerns linger about counterfeit spirits
Figure 32: General attitudes towards spirits, July 2013
Lack of trust continues to hamper baijiu
Knowledge of spirits remains limited
Spirits retain a strong role as status symbols
Older consumers see Western spirits in a positive light when it comes to health
Figure 33: Agreement with the statement ‘Western spirits do less harm to my health than Chinese baijiu’, by age, July 2013
Women show positive attitudes towards Western spirits
Figure 34: Agreement with the statement ‘It is worth paying more for Western spirits because they offer better quality’, by age and gender, July 2013
Figure 35: Agreement on selected statements regarding baijiu and Western spirits, by gender, July 2013
High earners hold the most positive views of Western spirits
Figure 36: Selected attitudes towards spirits, by monthly household income, July 2013
Figure 37: Selected attitudes towards spirits, by monthly household income, July 2013

Key Issue – Targeting Female Drinkers Becomes Increasingly Important for Growth
Key points
Background
Significantly more women drink Western spirits than baijiu
Figure 38: Types of spirits drunk in the past 12 months, by gender, July 2013
Western spirits can draw on their fashionable and exotic image to appeal to women…
Figure 39: Agreement on selected attitudinal statements regarding spirits, by gender, July 2013
Figure 40: The consumer segment of ‘‘uncritical admirers of Western spirits’’, by gender, July 2013
bottles and packaging tailored to the Chinese market are also important
Mixability plays a key role for Western spirits when targeting women
Figure 41: Different types of spirits consumed in the past 12 months, by gender, July 2013
Figure 42: Consumers’ preferences over mixed beverages, by gender, July 2013
Women show greater interest in the flavours when buying Western spirits as gifts
Figure 43: ‘‘Flavour the recipient likes’’ as an important factor when buying Western spirits as gifts for special occasions, by gender, July 2013
Premium products are more attractive to women in their forties
Figure 44: Agreement of the statement ‘It is worth paying more for Western spirits because they offer better quality’, by age and gender, July 2013
Women tend to drink Western spirits on a wider range of occasions than baijiu
Figure 45: Repertoire of occasions on which spirits are consumed, by type, by gender, July 2013
What it means

Key Issue – The Future of the High-End Market
Key points
Background
Spirits tend to be seen as reflecting social status
High earners tend to drink on a wider range of occasions…
Figure 46: agreement with the statement ‘I only drink on certain occasions’, by monthly personal income, July 2013
and they are more willing to try different brands of spirits
Figure 47: agreement with the statement ‘I am interested in trying new spirit types or brands I have not drunk before’, by monthly personal income, July 2013
Western high-end spirits tend to appeal more to the high-earning consumers in China
Figure 48: Spirits consumed in the past 12 months, by types of spirits and personal monthly income, July 2013
Western spirit brands could benefit from targeting the expert consumer segment with their high-end offerings
Figure 49: agreement with the statement ‘It is worth paying more for Western spirits because they offer better quality’, by consumer segment, July 2013
Figure 50: Selected attitudes to spirits, by consumer segments, July 2013
What it means

Key Issue – Gift-Giving and the Spirit Market
Key points
Background
Spirits remain popular gifts
baijiu is widely seen as more suitable as a gift…
Buying baijiu as a gift is more popular among men
Figure 51: Selected attitudes towards buying spirits as gifts, by gender, July 2013
Consumers from smaller cities are more willing to buy baijiu as a gift
Figure 52: Selected attitudes towards buying spirits as gifts, by city tier, July 2013
but Western spirits are gaining momentum
Figure 53: Agreement with the statement ‘It shows that I have good taste if I buy Western spirits as gifts rather than Chinese baijiu’, by city tier, July 2013
Price is more important when buying spirits as a gift for family members and close friends than for business
Figure 54: importance of price when buying spirits as a gift, by types of gift recipients, July 2013
Baijiu
Western spirits
Premium packaging tends to be more important when it comes to gift buying for business purposes
Figure 55: The most important factors for buying festive food as a gift for special occasions, July 2013
Baijiu
Western spirits
What it means

Key Issue – Online Retail Can Help Brands Reach Customers Directly
Key points
Counterfeit products remain an issue in the spirits market
Background
Consumer confidence in spirits has been widely affected
Existing distribution platform hampers online growth of large baijiu brands
Smaller brands are free to expand online
Western spirits
Women are more likely to buy spirits online
Figure 56: Purchase of spirits from online retail channels in the past 12 months, by gender, July 2013
High earners are more likely to buy spirits online
Figure 57: purchase of spirits from online retail channels in the past 12 months, by monthly personal income, July 2013
What it means

Appendix – Spirits Consumed in Past 12 Months
Figure 58: Spirits consumed in past 12 months, July 2013
Figure 59: Spirits consumed in past 12 months, July 2013
Figure 60: Most popular spirits consumed in past 12 months, by demographics, July 2013
Figure 61: Next most popular spirits consumed in past 12 months, by demographics, July 2013
Figure 62: Most popular Western spirits consumed in past 12 months, by demographics, July 2013
Figure 63: Next most popular Western spirits consumed in past 12 months, by demographics, July 2013
Figure 64: Most popular Chinese baijiu consumed in past 12 months, by demographics, July 2013
Figure 65: Next most popular Chinese baijiu consumed in past 12 months, by demographics, July 2013
Figure 66: Most popular whisky consumed in past 12 months, by demographics, July 2013
Figure 67: Next most popular whisky consumed in past 12 months, by demographics, July 2013
Figure 68: Most popular brandy/cognac consumed in past 12 months, by demographics, July 2013
Figure 69: Next most popular brandy/cognac consumed in past 12 months, by demographics, July 2013
Figure 70: Most popular gin consumed in past 12 months, by demographics, July 2013
Figure 71: Next most popular gin consumed in past 12 months, by demographics, July 2013
Figure 72: Most popular vodka consumed in past 12 months, by demographics, July 2013
Figure 73: Next most popular vodka consumed in past 12 months, by demographics, July 2013
Figure 74: Most popular tequila consumed in past 12 months, by demographics, July 2013
Figure 75: Next most popular tequila consumed in past 12 months, by demographics, July 2013
Figure 76: Most popular rum consumed in past 12 months, by demographics, July 2013
Figure 77: Next most popular rum consumed in past 12 months, by demographics, July 2013
Figure 78: Most popular liqueur consumed in past 12 months, by demographics, July 2013
Figure 79: Next most popular liqueur consumed in past 12 months, by demographics, July 2013

Appendix – Repertoire Analysis
Figure 80: Repertoire of Western Spirits consumed in past 12 months (Western), July 2013
Figure 81: Repertoire of Western spirits consumed in past 12 months (Western), by demographics, July 2013
Figure 82: General attitude towards spirits, by repertoire of Western spirits consumed in past 12 months (Western spirits), July 2013
Figure 83: Repertoire of spirits consumed occasions in past 12 months, July 2013
Figure 84: Repertoire of Western spirits consumed occasions in past 12 months, by demographics, July 2013
Figure 85: Repertoire of Chinese spirits consumed occasions in past 12 months, by demographics, July 2013
Figure 86: Spirits drinking habits, by repertoire of Western spirits consumed (occasions) in past 12 months, July 2013
Figure 87: Spirits drinking habits, by repertoire of Chinese spirits consumed (occasions) in past 12 months, July 2013

Appendix – Spirits Drinking Habits
Figure 88: Spirits drinking habits, July 2013
Figure 89: Most popular spirits drinking habits, by demographics, July 2013
Figure 90: Next most popular spirits drinking habits, by demographics, July 2013
Figure 91: Spirits drinking habits, by spirits consumed in past 12 months, July 2013
Figure 92: Spirits drinking habits, by most popular Western spirits consumed in past 12 months, July 2013
Figure 93: Spirits drinking habits, by next most popular Western spirits consumed in past 12 months, July 2013
Figure 94: Spirits drinking habits, by most popular Chinese baijiu consumed in past 12 months, July 2013
Figure 95: Spirits drinking habits, by next most popular Chinese baijiu consumed in past 12 months, July 2013
Figure 96: Spirits drinking habits, by most popular whisky consumed in past 12 months, July 2013
Figure 97: Spirits drinking habits, by next most popular whisky consumed in past 12 months, July 2013
Figure 98: Spirits drinking habits, by brandy/cognac consumed in past 12 months, July 2013
Figure 99: Spirits drinking habits, by gin consumed in past 12 months, July 2013
Figure 100: Spirits drinking habits, by vodka consumed in past 12 months, July 2013
Figure 101: Spirits drinking habits, by tequila consumed in past 12 months, July 2013
Figure 102: Spirits drinking habits, by rum consumed in past 12 months, July 2013
Figure 103: Spirits drinking habits, by liqueur consumed in past 12 months, July 2013

Appendix – Purchase Channel of Spirits in the Past 12 Months
Figure 104: Purchase channel of spirits in the past 12 months, July 2013
Figure 105: Most popular purchase channel of Western spirits in the past 12 months, by demographics, July 2013
Figure 106: Next most popular purchase channel of Western spirits in the past 12 months, by demographics, July 2013
Figure 107: Other purchase channel of Western spirits in the past 12 months, by demographics, July 2013
Figure 108: Most popular purchase channel of Chinese spirits in the past 12 months, by demographics, July 2013
Figure 109: Next most popular purchase channel of Chinese spirits in the past 12 months, by demographics, July 2013
Figure 110: Other purchase channel of Chinese spirits in the past 12 months, by demographics, July 2013

Appendix – The Most Important Factors for Buying Spirits as Gifts
Figure 111: The most important factors for buying spirits as gifts, July 2013
Figure 112: The most important factors for buying spirits as gifts – Gifting for my family, by demographics, July 2013
Figure 113: The next most important factors for buying spirits as gifts – Gifting for my family, by demographics, July 2013
Figure 114: The other important factors for buying spirits as gifts – Gifting for my family, by demographics, July 2013
Figure 115: The most important factors for buying spirits as gifts – Gifting for business purpose, by demographics, July 2013
Figure 116: The next most important factors for buying spirits as gifts – Gifting for business purpose, by demographics, July 2013
Figure 117: The other important factors for buying spirits as gifts – Gifting for business purpose, by demographics, July 2013
Figure 118: The most important factors for buying spirits as gifts – Gifting for special occasions, by demographics, July 2013
Figure 119: The next most important factors for buying spirits as gifts – Gifting for special occasions, by demographics, July 2013
Figure 120: The other important factors for buying spirits as gifts – Gifting for special occasions, by demographics, July 2013

Appendix – Attitudes towards Buying Spirits as Gifts
Figure 121: Attitudes towards buying spirits as gifts, July 2013
Figure 122: Most popular attitudes towards buying spirits as gifts, by demographics, July 2013
Figure 123: Next most popular attitudes towards buying spirits as gifts, by demographics, July 2013

Appendix – General Attitude towards Spirits
Figure 124: General attitude towards spirits, July 2013
Figure 125: Agreement with the statement ‘The spirits you drink reflect your social status’, by demographics, July 2013
Figure 126: Agreement with the statement ‘It makes me look more fashionable to drink Western spirits than Chinese baijiu’, by demographics, July 2013
Figure 127: Agreement with the statement ‘Drinking Western spirits is a reflection of good taste’, by demographics, July 2013
Figure 128: Agreement with the statement ‘Western spirits do less harm to my health than Chinese baijiu’, by demographics, July 2013
Figure 129: Agreement with the statement ‘I would like to see more spirit products providing health benefits’, by demographics, July 2013
Figure 130: Agreement with the statement ‘Claims of Western spirits are more trustworthy than those of Chinese baijiu’, by demographics, July 2013
Figure 131: Agreement with the statement ‘Recent scandals of Chinese baijiu have reduced my trust in its quality’, by demographics, July 2013
Figure 132: Agreement with the statement ‘I worry about counterfeit/copycat spirits when buying premium spirits’, by demographics, July 2013
Figure 133: Agreement with the statement ‘I see no difference between various types of Western spirits’, by demographics, July 2013
Figure 134: Agreement with the statement ‘I don’t know much about spirits’, by demographics, July 2013
Figure 135: Agreement with the statement ‘Western spirits are overpriced’, by demographics, July 2013
Figure 136: Agreement with the statement ‘It is worth paying more for Western spirits because they offer better quality’, by demographics, July 2013
Figure 137: General attitude towards spirits, by most popular spirits consumed in past 12 months, July 2013
Figure 138: General attitude towards spirits, by next most popular spirits consumed in past 12 months, July 2013
Figure 139: General attitude towards spirits, by most popular Western spirits consumed in past 12 months, July 2013
Figure 140: General attitude towards spirits, by next most popular Western spirits consumed in past 12 months, July 2013
Figure 141: General attitude towards spirits, by most popular Chinese baijiu consumed in past 12 months, July 2013
Figure 142: General attitude towards spirits, by next most popular Chinese baijiu consumed in past 12 months, July 2013
Figure 143: General attitude towards spirits, by most popular whisky consumed in past 12 months, July 2013
Figure 144: General attitude towards spirits, by next most popular whisky consumed in past 12 months, July 2013
Figure 145: General attitude towards spirits, by most popular brandy/cognac consumed in past 12 months, July 2013
Figure 146: General attitude towards spirits, by next most popular brandy/cognac consumed in past 12 months, July 2013
Figure 147: General attitude towards spirits, by most popular gin consumed in past 12 months, July 2013
Figure 148: General attitude towards spirits, by next most popular gin consumed in past 12 months, July 2013
Figure 149: General attitude towards spirits, by most popular vodka consumed in past 12 months, July 2013
Figure 150: General attitude towards spirits, by next most popular vodka consumed in past 12 months, July 2013
Figure 151: General attitude towards spirits, by most popular tequila consumed in past 12 months, July 2013
Figure 152: General attitude towards spirits, by next most popular tequila consumed in past 12 months, July 2013
Figure 153: General attitude towards spirits, by most popular rum consumed in past 12 months, July 2013
Figure 154: General attitude towards spirits, by next most popular rum consumed in past 12 months, July 2013
Figure 155: General attitude towards spirits, by most popular liqueur consumed in past 12 months, July 2013
Figure 156: General attitude towards spirits, by next most popular liqueur consumed in past 12 months, July 2013
Figure 157: General attitude towards spirits, by most popular Chinese baijiu consumed in past 12 months, July 2013
Figure 158: General attitude towards spirits, by next most popular Chinese baijiu consumed in past 12 months, July 2013

Appendix – Segmentation
Figure 159: Target groups, July 2013
Figure 160: Target groups, by demographics, July 2013
Figure 161: Spirits consumed in past 12 months, by target groups, July 2013
Figure 162: General attitude towards spirits, by target groups, July 2013

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