Table of Contents
Introduction
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- Methodology
- Limitation
- Definitions
- Abbreviation
Executive Summary
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- The painful reshuffle leads to a sustainable growth in the future
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- Figure 1: Best- and worst-case forecast of China retail value sales of spirits, 2009-19
- Gender barriers most pronounced in baijiu category
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- Figure 2: Reasons for not drinking baijiu, June 2014
- Lack of knowledge stops consumers from drinking Western spirits
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- Figure 3: Reasons for not drinking Western spirits, June 2014
- Spirits users’ willingness to trade up is high
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- Figure 4: General attitudes towards drinking spirits, June 2014
- The eagerness to see product innovation is high in the baijiu category
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- Figure 5: Attitudes towards production innovation concepts for baijiu, June 2014
- What we think
Insights and Issues
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- Is the knowledge barrier of Western spirits breakable?
- The facts
- The implications
- Is drinking at home showing potential in the spirits market?
- The facts
- The implications
- Are milder, healthier baijiu products showing potential among the young?
- The facts
- The implications
- How to make baijiu more suitable for women?
- The facts
- The implications
Trend Applications
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- Make it Mine
- Guiding Choice
- Prove it
Market Drivers
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- Key points
- Rising disposable income encourages consumers to trade up…
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- Figure 6: Disposable income per capita household in urban China, 2005-13
- … but the ongoing anti-extravagance campaign will drive spirits prices down
- Rising food prices further squeeze baijiu brands’ profits…
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- Figure 7: Wholesale prices of key staples in China, 2009-14
- … but the consumption tax reform is likely to ease the pressure
Market Size and Forecast
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- Key points
- The end of the golden ten years and the new start of the spirits market
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- Figure 8: Value and volume sales for Chinese spirits, 2009-19
- Figure 9: Value and volume sales for Western spirits
- The painful reshuffle leads to a sustainable growth in the future
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- Figure 10: Best- and worst-case forecast of China retail value sales of spirits, 2009-19
- Figure 11: Best- and worst-case forecast of China retail volume sales of spirits, 2009-19
- Profit being squeezed in the baijiu category
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- Figure 12: Best- and worst-case forecast of China retail value sales of Chinese spirits, 2009-19
- Figure 13: Best- and worst-case forecast of China retail volume sales of Western spirits, 2009-19
- Fluctuation in the Western spirits market
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- Figure 14: Best- and worst-case forecast of China retail value sales of Western spirits, 2009-19
- Figure 15: Best- and worst-case forecast of China retail volume sales of Western spirits, 2009-19
- Forecast methodology
Market Segmentation
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- Key points
- Western spirits are losing grounds
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- Figure 16: Segment performance of the spirits market in China, 2009-14
- Different pictures within the Western spirits category
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- Figure 17: Market share changes from 2011-13 in the Western spirits category
- Figure 18: Growth rate of selected types of drink in the Western spirits category, 2012-13
Market Share
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- Key points
- The consolidation process in the baijiu category has ground to a halt
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- Figure 19: Market share of leading brands in the spirits category, by value, 2010-13
- Figure 20: Market share of the top ten brands in the baijiu category
Brands and Companies
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- Leading baijiu brands
- Yibin Wuliangye
- Kweichow Moutai Co., Ltd
- Leading Western spirits companies
- Diageo Plc
- Pernod Ricard S.A.
The Consumer – Drinking Habits for Spirits
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- Key points
- Relatively low penetration of baijiu and Western spirits shows potential
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- Figure 21: Consumers’ drinking habits for spirits, June 2014
- Baijiu is more popular among men, high earners, and those in lower tier cities
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- Figure 22: Consumers who drank baijiu in the past six months, by selected demographics, June 2014
- High earners and people from tier one cities drink Western spirits more
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- Figure 23: Consumers who drank Western spirits in the past six months, by selected demographics, June 2014
- Guangzhou stands out with highest Western spirits penetration
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- Figure 24: Consumers who drank Western spirits in the past six months, by regions, June 2014
- Consumers in their thirties and low earners more likely to be non-drinkers of spirits
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- Figure 25: Non-drinkers of spirits, by selected demographic groups, June 2014
The Consumer – Reasons for Not Drinking Baijiu
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- Key points
- Gender barriers most pronounced in baijiu category
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- Figure 26: Reasons for not drinking baijiu, June 2014
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- Figure 27: Flavoured sake products launched in Japan 2010-12
- Older non-drinkers tend to consider baijiu as “old fashioned”
- Health implications and baijiu’s strong taste deter consumers from drinking
- Price barrier is very limited in the baijiu category
- Milder baijiu products appeal to the young
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- Figure 28: Selected reasons for not drinking baijiu, by age group, June 2014
- Taste barrier more pronounced among women
- Young non-drinkers feel that baijiu is not for their age
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- Figure 29: Agreement with the statement “Baijiu is not suitable for people of my age”, by age, June 2014
- Geographic location is no longer a good indicator
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- Figure 30: Selected reasons for not drinking baijiu, by region, June 2014
The Consumers – Willingness to Try Baijiu
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- Key points
- More than one in three non-drinkers of baijiu are willing to try
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- Figure 31: Willingness to try baijiu in the next six months, June 2014
- Young consumers, high earners are more likely to try baijiu
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- Figure 32: Willingness to try baijiu in the next six months, by selected demographics, June 2014
- Non-drinkers from Chengdu are less likely to try
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- Figure 33: Non-drinkers who are not willing to try baijiu, by region, June 2014
The Consumer – Reasons for Not Drinking Western Spirits
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- Key points
- Lack of knowledge stops consumers from drinking Western spirits
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- Figure 34: Reasons for not drinking Western spirits, June 2014
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- Figure 35: Agreement with the statement “I know little about Western spirits”, by selected demographics, June 2014
- Peer pressure remains as a key barrier
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- Figure 36: Most popular reasons for not drinking Western spirits, by demographics, June 2014
- Non-drinkers worry about counterfeit Western spirits
- Specially designed drinks for women do not appeal to the majority of female non-drinkers
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- Figure 37: Willingness to try Western spirits, by next most popular reasons for not drinking Western spirits, June 2014
- Health concerns deter tier one consumers and mid earners
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- Figure 38: The agreement with the statement “Western spirits are not good for health” by selected demographics, June 2014
The Consumer – Willingness to Try Western Spirits
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- Key points
- More than half of non-drinkers willing to try
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- Figure 39: Willingness to try Western spirits, June 2014
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- Figure 40: Willingness to try Western spirits, by demographics, June 2014
- Shanghai as a market shows limited potential to expand
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- Figure 41: Willingness to try Western spirits, by demographics, June 2014
The Consumer – Drinking Occasions For Western Spirits
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- Key points
- Repertoire consumption is widely seen in the Western spirits market
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- Figure 42: Drinking occasions of Western spirits in the past six months, June 2014
- Drinking-at-home occasion is on the rise for Western spirits
- Socialising with friends is the most popular occasion
The Consumer – Users of Different Types of Western Spirits
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- Key points
- Whisky attracts older consumers and mid-to-high earners
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- Figure 43: Whisky users in past six months, by selected demographics, June 2014
- Brandy more appealing to high earners and consumers in their forties
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- Figure 44: Brandy users in past six months, by selected demographics, June 2014
- At-home occasions popular among women in their forties
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- Figure 45: Spirits users who drank brandies at home in past six months, by selected demographics, June 2014
- Women in their twenties show potential to become users of brandy
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- Figure 46: Spirits drinkers who did not drink brandy in the past six months, by gender and age, June 2014
- Women in their forties are more likely to drink gin
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- Figure 47: Gin users in the past six months, by selected demographics, June 2014
- Vodka holds a premium image
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- Figure 48: Users of vodka in the past six months, by personal income, June 2014
The Consumer – Users and Drinking Occasions of Baijiu
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- Key points
- Baijiu is unnecessarily perceived as an old man’s drink
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- Figure 49: Users of baijiu in the past six months, by gender and age, June 2014
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- Figure 50: The usage of baijiu, by drinking occasions, June 2014
- Socialising with friends a popular drinking occasion for consumers from the north
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- Figure 51: Users who drunk baijiu when socialising with friends in the past six months, by regions, June 2014
The Consumer – General Attitudes towards Drinking Spirits
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- Key points
- Spirits users’ willingness to trade up is high…
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- Figure 52: General attitudes towards drinking spirits, June 2014
- … but promotion deals are still welcomed
- Word of mouth as an information channel is getting increasingly important
- Health concerns hit baijiu consumption
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- Figure 53: Agreement with the statement “I am drinking less spirits compared to six months ago due to health concerns”, by type of spirits drunk, June 2014
- Men show greater interests in spirits’ taste and flavour
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- Figure 54: Agreement of selected attitude statements, by gender, June 2014
- Mobile phones and in-store information channels work better with Western spirits
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- Figure 55: Agreement of selected attitude statements, by types of spirits drinkers, June 2014
- Regional differences play a key part
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- Figure 56: Attitudes towards drinking baijiu with specific flavours, by region, June 2014
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- Figure 57: Attitudes towards drinking Western spirits with authentic taste, by region, June 2014
- Different types of Western spirits show disparity in attitudes
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- Figure 58: Selected general attitudes towards spirits, by different types of Western spirits, June 2014
- At-home occasion for baijiu shows potential
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- Figure 59: Selected general attitudes towards spirits, by drinking occasions, June 2014
The Consumer –Innovation for Baijiu
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- Key points
- The original liquid shows potential to appeal to the core user group of baijiu
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- Figure 60: Attitudes towards production innovation concepts for baijiu, June 2014
- Highlighting mixability of baijiu makes it appealing to women
The Consumer – Product Innovation for Western Spirits
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- Key points
- Unique and innovative packaging shows potential
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- Figure 61: Attitudes towards production innovation concepts for Western spirits, June 2014
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- Figure 62: Medea vodka launched in the US in Q2 2013
- Single malt whisky shows potential
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- Figure 63: Attitudes towards single malt whisky for Western spirits, June 2014
- Women shows greater interests in production innovation in Westerns spirits category
- Women are more willing to join both online and offline activities
- RTD drinks appeal to women
- Limited edition appeals to female drinkers in their forties
Appendix – Drinking Habits in the Last Six Months
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- Figure 64: Consumers' drinking habits for spirits, June 2014
- Figure 65: Consumers' drinking habits for spirits, by demographics, June 2014
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Appendix – Reasons for Not Drinking Baijiu in the Last Six Months
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- Figure 66: Reasons for not drinking baijiu, June 2014
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- Figure 67: Most popular reasons for not drinking baijiu, by demographics, June 2014
- Figure 68: Next most popular reasons for not drinking baijiu, by demographics, June 2014
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- Figure 69: Reasons for not drinking baijiu, by willingness to try baijiu, June 2014
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Appendix – Willingness to Try Baijiu
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- Figure 70: Willingness to try baijiu, by demographics, June 2014
- Figure 71: Willingness to try baijiu, by most popular reasons for not drinking baijiu, June 2014
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- Figure 72: Willingness to try baijiu, by next most popular reasons for not drinking baijiu, June 2014
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Appendix – Reasons for Not Drinking Western Spirits in the Last Six Months
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- Figure 73: Reasons for not drinking Western spirits, June 2014
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- Figure 74: Most popular reasons for not drinking Western spirits, by demographics, June 2014
- Figure 75: Next most popular reasons for not drinking Western spirits, by demographics, June 2014
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- Figure 76: Reasons for not drinking Western spirits, by Willingness to try Western spirits, June 2014
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Appendix – Willingness to Try Western Spirits
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- Figure 77: Willingness to try Western spirits, by demographics, June 2014
- Figure 78: Willingness to try Western spirits, by most popular reasons for not drinking Western spirits, June 2014
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- Figure 79: Willingness to try Western spirits, by next most popular reasons for not drinking Western spirits, June 2014
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Appendix – Drinking Occasions in the last 6 Months
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- Figure 80: Drinking occasions of Western spirits, June 2014
- Figure 81: Drinking occasions of Western spirits, June 2014
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- Figure 82: Drinking occasions of baijiu, June 2014
- Figure 83: Drinking occasions of baijiu, June 2014
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- Figure 84: Most popular drinking occasions of Western spirits – Western spirits, by demographics, June 2014
- Figure 85: Next most popular drinking occasions of Western spirits – Western spirits, by demographics, June 2014
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- Figure 86: Most popular drinking occasions of Western spirits – Whisky/bourbon, by demographics, June 2014
- Figure 87: Next most popular drinking occasions of Western spirits – Whisky/bourbon, by demographics, June 2014
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- Figure 88: Most popular drinking occasions of Western spirits – Brandy/Armagnac/Cognac, by demographics, June 2014
- Figure 89: Next most popular drinking occasions of Western spirits – Brandy/Armagnac/Cognac, by demographics, June 2014
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- Figure 90: Most popular drinking occasions of Western spirits – Gin, by demographics, June 2014
- Figure 91: Next most popular drinking occasions of Western spirits – Gin, by demographics, June 2014
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- Figure 92: Most popular drinking occasions of Western spirits – Vodka, by demographics, June 2014
- Figure 93: Next most popular drinking occasions of Western spirits – Vodka, by demographics, June 2014
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- Figure 94: Most popular drinking occasions of Western spirits – Tequila, by demographics, June 2014
- Figure 95: Next most popular drinking occasions of Western spirits – Tequila, by demographics, June 2014
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- Figure 96: Most popular drinking occasions of Western spirits – Liqueurs, by demographics, June 2014
- Figure 97: Next most popular drinking occasions of Western spirits – Liqueurs, by demographics, June 2014
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- Figure 98: Most popular drinking occasions of Western spirits – Cocktail, by demographics, June 2014
- Figure 99: Next most popular drinking occasions of Western spirits – Cocktail, by demographics, June 2014
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- Figure 100: Most popular drinking occasions of Western spirits – Rum, by demographics, June 2014
- Figure 101: Next most popular drinking occasions of Western spirits – Rum, by demographics, June 2014
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- Figure 102: Most popular drinking occasions of Western spirits – Wine, by demographics, June 2014
- Figure 103: Next most popular drinking occasions of Western spirits – Wine, by demographics, June 2014
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- Figure 104: Most popular drinking occasions of Western spirits – Other Western spirits, by demographics, June 2014
- Figure 105: Next most popular drinking occasions of Western spirits – Other Western spirits, by demographics, June 2014
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- Figure 106: Most popular drinking occasions of Western spirits – Don’t remember, by demographics, June 2014
- Figure 107: Next most popular drinking occasions of Western spirits – Don’t remember, by demographics, June 2014
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- Figure 108: Most popular drinking occasions of baijiubaijiu, by demographics, June 2014
- Figure 109: Next most popular drinking occasions of baijiubaijiu, by demographics, June 2014
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- Figure 110: Drinking occasions of Western spirits, by repertoire of drinking occasions of Western spirits, June 2014
- Figure 111: Attitudes towards drinking spirits, by repertoire of drinking occasions of Western spirits, June 2014
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Appendix – General Attitudes towards Drinking Spirits
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- Figure 112: Attitudes towards drinking spirits, June 2014
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- Figure 113: Attitudes towards drinking spirits – Consumption behaviour, by demographics, June 2014
- Figure 114: Attitudes towards drinking spirits – Information channel, by demographics, June 2014
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- Figure 115: Attitudes towards drinking spirits – Price and promotion, by demographics, June 2014
- Figure 116: Attitudes towards drinking spirits, by drinking occasions of spirits – Western spirits, June 2014
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- Figure 117: Attitudes towards drinking spirits, by most popular drinking occasions of spirits – Whisky/bourbon, June 2014
- Figure 118: Attitudes towards drinking spirits, by next most popular drinking occasions of spirits – Whisky/bourbon, June 2014
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- Figure 119: Attitudes towards drinking spirits, by most popular drinking occasions of spirits – Brandy/Armagnac/Cognac, June 2014
- Figure 120: Attitudes towards drinking spirits, by next most popular drinking occasions of spirits – Brandy/Armagnac/Cognac, June 2014
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- Figure 121: Attitudes towards drinking spirits, by most popular drinking occasions of spirits – Gin, June 2014
- Figure 122: Attitudes towards drinking spirits, by next most popular drinking occasions of spirits – Gin, June 2014
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- Figure 123: Attitudes towards drinking spirits, by most popular drinking occasions of spirits – Vodka, June 2014
- Figure 124: Attitudes towards drinking spirits, by next most popular drinking occasions of spirits – Vodka, June 2014
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- Figure 125: Attitudes towards drinking spirits, by most popular drinking occasions of spirits – Tequila, June 2014
- Figure 126: Attitudes towards drinking spirits, by next most popular drinking occasions of spirits – Tequila, June 2014
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- Figure 127: Attitudes towards drinking spirits, by most popular drinking occasions of spirits – Liqueurs, June 2014
- Figure 128: Attitudes towards drinking spirits, by next most popular drinking occasions of spirits – Liqueurs, June 2014
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- Figure 129: Attitudes towards drinking spirits, by most popular drinking occasions of spirits – Cocktail, June 2014
- Figure 130: Attitudes towards drinking spirits, by next most popular drinking occasions of spirits – Cocktail, June 2014
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- Figure 131: Attitudes towards drinking spirits, by drinking occasions of spirits – Rum, June 2014
- Figure 132: Attitudes towards drinking spirits, by drinking occasions of spirits – Wine, June 2014
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- Figure 133: Attitudes towards drinking spirits, by drinking occasions of spirits – Other Western spirits, June 2014
- Figure 134: Attitudes towards drinking spirits, by drinking occasions of spirits – Don’t remember, June 2014
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Appendix – Attitudes towards New Product Innovation Concepts in Baijiu
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- Figure 135: Attitudes towards new product innovation concepts in baijiu, June 2014
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- Figure 136: Interest in the statement ‘Products containing added traditional Chinese medicine ingredients’, by demographics, June 2014
- Figure 137: Interest in the statement ‘The original liquid without being blended’, by demographics, June 2014
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- Figure 138: Interest in the statement ‘Products suitable for mixing with other alcoholic beverages/soft drinks’, by demographics, June 2014
- Figure 139: Interest in the statement ‘Packages designed for special occasions’, by demographics, June 2014
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- Figure 140: Interest in the statement ‘Fashionable packaging’, by demographics, June 2014
- Figure 141: Interest in the statement ‘Products designed for the young^’, by demographics, June 2014
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- Figure 142: Interest in the statement ‘Products designed for women^^’, by demographics, June 2014
- Figure 143: Interest in the statement ‘baijiu with milder taste’, by demographics, June 2014
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- Figure 144: Interest in the statement ‘Products with low alcohol content’, by demographics, June 2014
- Figure 145: Interest in the statement ‘Products from well-known brands but lower priced’, by demographics, June 2014
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- Figure 146: Interest in the statement ‘Products in small pack’, by demographics, June 2014
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Appendix – Attitudes towards New Product Innovation Concepts in Western Spirits
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- Figure 147: Attitudes towards new product innovation concepts in Western spirits, June 2014
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- Figure 148: Interest in the statement ‘Packaging with Chinese elements’, by demographics, June 2014
- Figure 149: Interest in the statement ‘Limited edition especially for Chinese market’, by demographics, June 2014
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- Figure 150: Interest in the statement ‘Western spirits designed for women^’, by demographics, June 2014
- Figure 151: Interest in the statement ‘Ready-to-drink spirits drinks’, by demographics, June 2014
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- Figure 152: Interest in the statement ‘Products with customized taste for Chinese consumers’, by demographics, June 2014
- Figure 153: Interest in the statement ‘Products with a brochure about drinking knowledge’, by demographics, June 2014
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- Figure 154: Interest in the statement ‘Products offering offline brand/membership activities’, by demographics, June 2014
- Figure 155: Interest in the statement ‘Products offering online brand/membership activities’, by demographics, June 2014
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- Figure 156: Interest in the statement ‘Western spirits with more accessible price’, by demographics, June 2014
- Figure 157: Interest in the statement ‘Fashionable/unique packaging design^^’, by demographics, June 2014
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- Figure 158: Interest in the statement ‘Innovative gift packaging^^’, by demographics, June 2014
- Figure 159: Interest in the statement ‘Western spirits with additional flavours^^’, by demographics, June 2014
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- Figure 160: Interest in the statement ‘Single malt whisky^^^’, by demographics, June 2014
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