Economic growth, rising wages, and purchasing power have made it possible to develop substantially new consumption patterns for Asian markets. The alcoholic beverage industry, including that of beer, has undergone a sharp increase in the Asia-Pacific area, including increasing competition between local and foreign producers. Since 2002, China has occupied the first place for production and consumption of beer and currently in first place for the total value of transactions. It is expected that the Asian beer market will reach a value of 180 billion USD in 2021, with an estimated annual growth rate of 6 percent.
Rise of ecommerce as a beer sale channel
Ecommerce is becoming increasingly powerful when it comes to selling and advertising beer and other forms of alcohol in the Chinese market as China’s e-shopper and market transactions have rapidly expanded due to the COVID-19 pandemic.
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China’s beer industry is entering a new era, and it finds itself needing to satisfy a new set of cravings
China is the biggest beer importer in the world
China’s millennials are fast emerging as decision-makers with increasing purchasing power. Traditional narrow product offerings domestically have left a gap in the Chinese alcoholic beverage market which could be filled with imported products. Chinese consumers see imported premium beers as part of a modern lifestyle and an adventurous experience in which they can try new flavors and brands.
The continuous growth of imported beer is reflective of the rising demand by consumers for trading up. The leading beer exporter to China is Germany, followed by the Netherlands, Belgium, and France respectively. Imported beer sells at a relatively high price compared to local beer, and as a result, it offers more profit to distributors and retailers.
Chinese consumers are loving craft beer
In Kirin Beer University’s December 2017 report on world beer consumption by country, China is not only the first in terms of market share and consumption, but it is also one of two countries among the top 13 beer consumers in the world with growth positive in consumption year after year. So if you combine these numbers with the growth of wealth in the middle / upper class, and add a dash of innate classism, you have a lot of potential craft beer drinkers.
The Chinese middle /upper-class consumer is the key to craft beer producers because even there is a large market around foreign expatriates and expert drinkers, they know that in the long run, their future depends on Chinese consumers. The Chinese palate is slowly opening up to Western tastes, and young Chinese returning from overseas college are among the first customers of craft breweries.
Craft beer market expecting a 30% year on year
According to Beijing’s “Great Leap Brewing,” young Chinese are joining foreign clients. In a short time, they are becoming 70% of the brewery customer base. A couple of years ago, craft beer made up only 0.3 percent of total beer consumption. It has since risen to about 5 percent, said Darren Guo, one of the exhibition’s organizers, who expect to see 30 percent growth in the craft beer market every year until 2021. Furthermore, the proportion of high-end and ultra-high-end beer is expected to increase to 20% within the next 5 years.
Craft Beer in China appeal to the wealthy
The segment of the market that is most highly valuable in terms of alcohol consumption is centered around the Chinese middle/upper-class consumer. Taste and brand recognition are the most important purchase considerations for these high-net-worth drinkers.
Steps to sell craft beer in China:
Since China is a country where digital influences the purchases of 3 out of 4 consumers, it is fundamental to understand the dynamics of digital marketing in China.
- Website in China
- Baidu SEO
- PR & Forums
- Social Media
To sell craft beer online in China you need a Website in mandarin
For good SEO you need first of all a Chinese site with Chinese hosting: Baidu, the main Chinese search engine, does not favor index websites with foreign hosting and written in other languages. Your website must also respect Chinese standards and Chinese taste – often a lot of information on the homepage with small characters, often stronger colors, animations, and more lively communication in general.
This is very important because Chinese consumers are used to researching a lot of information before buying a product due to numerous health & food scandals. Word of mouth and information on the internet are therefore essential. Moreover, in an e-business site, Chinese consumers want to find precise and immediate information with the price along with the product and description without wasting time. Chinese consumers do not like to waste time searching for information especially during the payment process.
Keep in mind, an website is not enough to win the trust of chinese consumers: you need to work on your eReputation for that.
Promote your Craft Beer on Baidu (SEO/SEM)
After putting up a good site to sell online in China you have to promote it on the Chinese web. For this, it is important to know that the most important search engine in China is Baidu, which controls over 70% of the market. You can advertise on Baidu with search engine marketing (or pay per click) that works like Google AdWords on Google. Pay per click (or SEM) is particularly effective for a short-term strategy.
The problem is that sometimes it proves to be particularly expensive if not managed professionally: constant monitoring, search for suitable keywords (they are not often the same as the western ones), reports that understand the best performance, etc.
Baidu SEO on the other heand, is a great long-term strategy and is particularly effective when all the competition uses the SEM. Organic results also tend to be more trusted by consumers (and potential distributors).
Selling beer online is now the way to go in China
The beer sector is no exception to sales growth through Chinese e-commerce platforms. It is important to engage in e-commerce either through your own site or using platforms like Tmall where thousands of bottles of beer are sold each month. Undoubtedly, opening an online sales channel should not be seen as a shortcut to selling but as a piece of an integrated and planned marketing and sales strategy.
Now, if ecommerce has become a great way to sell beer in China, it does not relieve you from working on your eReputation. On the contrary, if you are going to put the ressources to sell online, you better make sure, consumers can easily find information about your brand online.
To do so, you’ll need a website + seo (see above), as well as a social media strategy and an undercover marketing strategy.
Undercover marketing: the action of having third party media/platform recommending your brand. It can be PR (press release) and/or Forums and Q&A.
Chinese Social Media
Social Media in China are numerous and every brand can find the one that fits its image and need the best.
At GMA, we strongly advise our customers to at least open a Wechat Official Account. Although, wechat is not the best place to grow a huge following, its critical for brand credibility. Indeed, wechat is so big, that it is not an option anymore fro brand not be present on there.
Wechat also has a nice set of tools:
- H5 brochure (great for company intro & listing)
- Mini-program/game. Entertain your follower
- Wechat Post: Alternative to email newsletters and good for nurtering
- Wechat Store
- Wechat Paiement
- Wechat Localization: allows you to target poeples and offer better service to customers
- Wechat CRM and Wechat Menu
- Wechat Paid Ads
- Wechat Chanels.
- Wechat Search Engine
Key Opinion Leaders (KOL)
KOL are people who have a great influence on the internet and on the general population. They have many fans, in some cases millions, and sometimes have some experience in the wine market. Location is also important – KOLs can have strong influences in a region, in a city, even in some cases a district of a Chinese city (do not forget that megacities like Beijing and Shanghai have over 20 million inhabitants and there are dozens of Chinese cities with more than 5 million inhabitants).
You can and must make your brand and your site known through KOLs, triggering a chain effect among their followers. The aim is to spread a good opinion about your beer and your brand. In a collectivist and hierarchical society like the Chinese one, KOLs have more impact than brands do on their own. KOLs have a major influence on social networks. You must know that 95% of the inhabitants of first and second-tier cities have at least one account on local social networks. Needless to say, the Chinese consumer who is targeting craft beers lives in big cities.
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