As the biggest market but also the most populous country in the world, China and its 1.4 billion netizens consume more and more beer every year. While in western countries, people tend to reduce their consumption of alcohol, in China it’s the opposite. Even though liquors are not the favorite beverage of Chinese people, beer is more adapted to their taste and take a great role in social relationships.
Like everywhere else in the world, when going out with friends, Chinese people drink beers.
In the USA, beer consumption is plunging. Actually, while beer represented over 60% of alcohol consumption in the 90s, it only represents now a bit less than 50%. A consumption decrease that could be link with the rise of a healthy lifestyle within our society.
And when in western countries people try to drink less alcohol, eat less meat and sugar but more veggies instead. At the opposite, in China people tend to consume more meat than before and more alcohol.
In fact, Chinese people don’t drink more beers… but they drink more expensive beers. They try to emphasize on the quality rather than the quantity. Last year, the beer market followed a positive evolution of 7%. Based on 5 years, the beer market increased by +42%. So even if the volume sold in China is slightly decreasing, its value is increasing.
Why? Well, you might consider the following elements:
- China GDP (Purchasing Power Parity) increased from $20 trillion in 2015 to over $23 trillion in 2017
- In 2018, the purchasing power per habitant increased of +6.6%
- Rise of the minimum income per habitant
- Development of the middle class: 350-400 million peoples (corresponding to six times the population of France and the all population of the USA)
Due to the rise of Millennials and the constant increase level of wealth, the Chinese consumer has a more nuanced view of brands. In the previous year, a foreign brand name would have been enough to suggest “high-quality product”. But from now on, expectations for products are increasing in terms of quality, value, and service. Being a foreign brand is not enough anymore.
The beer market in China in couple words:
- Market size evaluated to $85 billion by Euromonitor
- China represents 12% of beer global sales
- In 5 years, the market value increase of +42%
- Compared to last year, the market value increased of +7%
- Annual consumption of 45.7 billion liters
- The average per capita consumption stands at 29.6L in 2019
Actually, China is consuming nowadays twice as much beer as the US, and more than five times what Germany (the largest beer market in EU) consumes. The beer market has matured over the years and its importation has been growing by double digits over the last 5 years. In 2017, China imported over $750 million of beers, dominated by EU producers (representing around three-quarters of importations).
The main importer of beer in China:
Meaning that 4 out the 5 main importers of beer in China are from the European Union. European breweries have therefore an excellent opportunity to tap into this premium market.
Main companies importing or producing beers in China:
- Anheuser-Bush InBev
- China Resources
- Tsingtao Brewery
- Molson Coors
The development of artisanal beers in China.
Even the Belgium company “AB InBev”, number 3 in the Chinese market is buying local artisanal brasseries. Last year, they bought “Boxing Cat” in Shanghai. Chinese people love quality products. And an artisanal product will be highly competitive compared to an industrial one. Some companies as the Belgium one understood it, and therefore they are trying to surf on this new wave and level up their product range.
China and alcohol
Selling beers in China is a valuable market. But it tends to be more and more competitive. Of course, many new companies try to penetrate the market to distribute their beers. However, according to some forecast, beer will represent only 25% of alcohol consumption by 2022, while in 2015 it was over 30% (in value).
A new purchasing behavior influencing prices and companies’ margins.
How to take part in it and distribute your beer in China?
As you may imagine, there are many ways to sell your products and make money in China. But to perform in this highly competitive market, full of barriers, you’ll have to follow some simple steps. Whether you choose to distribute your beers offline or through an online e-commerce platform, you won’t be able to skip your banding moment. Cause if planning to do some sales in China, you have to brand yourself.
In China, for the exact same product, people would be ready to pay ten times the price of something branded, rather than something not branded.
Also, as you may know, China has suffered for a long time with its poor-quality reputation… and not only on the foreign market. In the domestic market, it was very similar. Also, to fight this reputation new rules and business behavior emerged from it. From now, to do business with Chinese, you’ll have to gain their trust.
What does that mean?
- Who are you? What do you want?
- What value can you bring me?
- What can you do for me?
- What guarantee of success do I have to cooperate with you?
- Do people know you and do they love you?
- Can we be friend?
So many questions to show you that you’ll need to gain credibility before doing anything with them. They want a trustful business relationship. They don’t want to deal with someone and realize later on that it was a fake company or that the products itself were low-quality.
Understand that for Chinese people, sometimes they may be contacted by an “American” company, and 2 weeks later they discover that it was in fact 3 guys trying to do some business in their garage in China’s countryside…
Also, considering all this, your future consumers and partners will care about comments and online reviews about your product. You can pretend to have the best beer in the world if there isn’t any review or article talking about it, it won’t work.
However, we’ll give you here some tips to build up your strategy and conquer the Chinese market.
Who are you? Nobody at the beginning
Imagine, a Chinese netizen contact you. He tells you that his company is super famous in China, and he wants you to distribute his product. I guess without recommendation it’s gonna be complicated, right? Especially considering that his company is probably not referenced to Google.
In China, it’s the same. They do not have access to our occidental mainstream media and social network. Therefore, they don’t have Google, Facebook, Instagram, Youtube, Viadeo, and others.
So, to get started in China, give them the opportunity to know more about you.
Nice to meet you… I am a new Brand
Your Visibility in China : Brand Awareness
- Develop a new good looking website (in Chinese)
It needs to be in Chinese (yes, it’s still their mother tongue), with a Chinese domain name. Plus, we recommend you to adapt your website features to the local market. Due to cultural differences, their design is usually different than ours.
- Open a Weibo account (official)
It’s like the Chinese Twitter. The most popular social media in China, it’s also an excellent platform to develop a KOL strategy. If you plan to target a large audience and engage with your customers, Weibo is a must-do.
- Open a certified account
- Communicate with your community
- Advertise your brand through sponsored ads
- Engage your customers (with games and contest for example)
- Baidu: The Chinese Google
Having a Chinese website is good, but not enough. They don’t trust companies… If they want to drink a good beer, Chinese people will check for information on Baidu, their Chinese google. Before buying anything, they’ll search for information about the product or the brand. It can be reviews, comments about something specific, forums, or general research to solve a problem they may have such as: “what’s the best beer for a Friday night? Or What’s the most favorite beer in China?”
Before purchasing a product, they will compare different brands and will be influenced by other’s comments and reviews. Here’s how to optimize your online reputation:
- Baidu Zhidao & Zhihu: a good way to deliver information.
- Baidu Baike: it’s kind of the Chinese Wikipedia. And they trust it a lot here. So, we advise you to make up your own page.
- Forums: it’s important to develop your online presence. The more people talk about you, the better.
- PR: if you’re a good beer, high quality, valuable price, and consumed by lot of people, then there should be articles about you. If not, it means you’re not worth it.
- Comments/reviews: Chinese people are always giving a comment or review about what they bought/consume. And you’ll need plenty of positive comments to convince distributors to distribute your product.
Show me your love : Social Media Engagement
Once you’ll be visible, a first step will be done. If you followed our previous advice, from now as soon as a potential customers or partners will check on you, they’ll be able to find the minimum information certifying you’re trustable.
It’s a first step, but not enough.
In China, importers/distributors will not cooperate with you if you’re not able to show them that your beer will work in their market. They receive hundreds demand a day. So, to get their attention you’d better develop a strong fan base and show that people actually love your products.
As for customers, it’s very similar. Keep in mind that Chinese people tend to be suggestible and “act like sheep” … We mean here that they won’t buy something that nobody bought before. They don’t like to be the first to buy. On the other way, they’ll be glad to buy something that everybody is buying. The reason behind all this, is that a famous product can be trusted. While if they’re the first ones to buy it, they have no guarantee of the product quality. And they don’t want to be cheated.
Therefore, building a strong e-reputation and a strong brand image is the best solution for you to gain the trust of Chinese consumers and future partners.
WeChat: Chinese Best Friend
Wechat is like the Chinese Facebook. Everybody uses it in China. A great messenger APP that also gets a “moment” system allowing people to share content (messages, pictures, videos) and personal feedback. Through this app, people use “Wechat groups” to communicate solution about their problems and therefore recommending brands or products. Not very efficient for direct advertisement but a super tool for community management and building engagement. You can also create your own groups through the APP.
- Open an official account
- Create an e-brochures
- Community management
- Engage with your followers
- Use mini-programs
Douyin: the entertainment platform
A short video sharing app growing very fast among young generations. It’s the perfect app to generate content and spread it to a wild audience. More intuitive and fun than WeChat and Weibo, this app is also an amazing tool for KOL strategy.
To resume the two first steps before conquering the Chinese beer market:
- Make Yourself Visible
- Develop an amazing e-reputation
Time to make money.
You’re visible in China. Good.
You have a good reputation in China. Good.
But now, how do we make money?
Cause without sales there is no business, we’ll detail for you here the best way to sell your beers in China.
How to develop your Online Sales in China?
It’s probably the easiest way to make money in China. Cause if in western countries people are more custom to buy food and beverage in physical shops, in China people are constantly focused on their phones. E-commerce online platforms are THE place to sell your product.
Just look at the last double 11: $38 billion in a day. And most of the products have been bought through mobile phones.
- People are always looking for a product to buy online.
- Your potential clients can buy your products from anywhere. They’ll just need access to a phone or computer.
- If they are satisfied, they’ll buy from you again.
- If you’re turning out to sell a lot of products on E-commerce Platform, offline distributors will contact you by themselves.
Just for you to imagine how far it can go… if you come to China one day and seat at a street food place. You can take your phone and order your favorite beers. You’ll be delivered in 30min.
People can even get delivered McDonald’s directly into a cinema.
So, if they love your beer, be sure there won’t be any excuse for you not to make online sales.
To operate online, here’s what you can do:
- Cross-border E-commerce (Tmall Global, JD Global, etc.)
- Chinese E-commerce platforms (Taobao, Tmall, JD.com, Pinduoduo, etc.)
What is Cross-Border in China?
Cross-border is about the importation of goods through sellers from foreign countries.
Let’s see how to sell your product through this model.
As an online e-commerce business model, you’ll need to have a platform. The main ones in China are currently Tmall Global and JD Global. Once you decide which platform you want to operate with, you’ll just need to set it up. Here’s the process:
- Pay a deposit
- Build a nice store
- Advertise a lot (at the beginning)
- Pay commission per sales
- Pay daily operation management (high cost)
- Need active marketing campaign
The good part of cross-border e-commerce is that you don’t need to have a Chinese business license or any certification. The bad part is that it’s pretty expensive.
What about Chinese platforms?
If you have the possibility to establish your business directly into China (with a W.O.F.E. for example), and therefore get a Chinese business license and the required certifications, you can use Chinese e-commerce platforms such as Taobao, Tmall, JD.com, etc.
It’s cheaper than cross-border and the time to deliver your product is faster. The main problem is that you’ll need to understand Chinese or to hire someone that can deal with it on your behalf. Because all the stores will be in Chinese. Otherwise, the process to open your store is similar to the one for a cross-border platform.
- Build store, design pages
- Advertise it
- Participate to special events (double 11, 618, 12/12, etc.)
- Manage daily operations
- Store supported by your branding
If you still have doubts about selling beer into China:
- Corona, the famous Mexican brand own by the Belgium group: AB inBev, decided to start local production in China due to the need of satisfying a high demand and in the same way solving supplies problems.
- There is such a high potential of development in the Chinese Beer market that Heineken decided to buy 40% stake in China’s largest beer company, just to challenge its rival “AB inBev”
If you have any questions about the beer market opportunity in China, feel free to contact us.
- Expert in Digital Marketing
- Professional in E-commerce in China
- 80 employees
- Over a thousand of satisfied clients
- Free advice (do not be shy)
Feel free to check on our free guide to sell alcohol in China (one email)