Economic growth, rising wages, and purchasing power have made it possible to develop substantially new consumption patterns for Asian markets. The alcoholic beverages industry, including the beer market, has undergone a sharp increase in the Asia-Pacific area, including increasing competition between local and foreign producers.
The Chinese beer market is the biggest in the world, accounting for $121.40 billion in 2022. China is also the world’s largest beer producer, and the retail sales on the local market grow year by year. The industry is thriving despite the COVID-19 pandemic, and experts predict that it may emerge even stronger after this situation.
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As Chinese people’s tastes are changing and disposable incomes are rising, they start turning their eyes toward premium beer brands, generating a year-on-year increase in craft beer sales. In this blog post, we will take a look at the beer market in China and examine the opportunities for craft beer manufacturers in China.
Overview of the Chinese Beer Market
China is the largest beer market in the world, accounting for $121.40 billion in 2022, with an annual market growth of 6.75% between 2022 and 2027. Chinese people spend around $80 for beer per year, drinking around 29l of beer. China represents 12% of beer sales globally, and in only 5 years, the market revenue value increased by 42%.
According to Statista, it is predicted that by 2025, 71% of spending in the beer market will be attributed to out-of-home consumption, which means it’s important to take care of good distribution partners so that you will be able to sell your beer in Chinese bars and restaurants.
As you can see in the chart above, China’s alcoholic drinks market is growing and the beer market accounts for almost 50% of the market shares. China’s beer industry is entering a new era, and it finds itself needing to satisfy a new set of cravings. What also contributes to the growth of the Chinese beer market are also non-alcoholic beer options, that attract younger generations. Although they are drinking differently and often less than older generations, they enjoy the taste of beer and like drinking non-alcoholic beer.
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 products from foreign companies. Many 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 (for example Tsingtao 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 in the Chinese market.
The Chinese middle /upper-class consumer is the key to craft beer producers because even though 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 colleges are among the first customers of craft breweries, as they want to taste something more than products from Tsingtao brewery and other local beers.
The craft beer market expects 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’s 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. 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 valued in terms of alcohol consumption is centered around the Chinese middle/upper-class consumer. Taste and strong brand image are the most important purchase considerations for these high-net-worth drinkers.
Steps to selling 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. Chinese people are not like customers in other countries and you need to understand their needs and habits in order to succeed in the Chinese beer market.
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 is therefore essential.
Moreover, in an e-business site, Chinese consumers want to find precise and immediate information about 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.
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 hand is a great long-term strategy and is particularly effective when all the competition uses SEM. Organic results also tend to be more trusted by consumers (and potential distributors).
You can use the Baidu ecosystem for your e-reputation purposes, participating in forums about the Chinese beer market, or starting your own communities there, to see the opinions about your brand and the needs and expectations of your potential customers. We recommend using Baidu Tieba, Baidu Zhidao, or Zhihu to boost your e-reputation in China.
Present your brand on Chinese social media platforms
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 for brands not to be present there.
On WeChat you can communicate with your audience through WeChat Official Accounts, posting announcements, new products, special deals, or talking to your community using private messages. You can also link your account to a mini-program, where you can develop a WeChat H5 brochure (see above), presenting your brand and your story. On top of that, there is an opportunity to start a WeChat Store, which is a very cost-effective option for selling your products in China without the need of entering big online marketplaces.
Apart from WeChat, you can enter platforms that will help you grow your audience and reach to potential consumers with a good promotion strategy. The best social media platform for this purpose are Weibo, Xiaohongshu, and Douyin. Xiaohongshu and Douyin are especially worth trying because they are used mostly by Millennials and Gen Z, which are your target audience.
On those platforms, you can post photos and videos, participate in discount activities, communicate with your followers, and also collaborate with Chinese influencers.
Key Opinion Leaders (KOL)
KOLs 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, and 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 Chinese influencers, 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.
Selling beer online is now the way to go in China
The Chinese 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 resources to sell online, you better make sure, consumers can easily find information about your brand online.
To do so, you’ll need a Chinese website + SEO (see above), as well as a social media strategy and an undercover marketing strategy. So, as you can see, entering China’s online marketplaces is the last step, as you need to build your brand’s presence first.
Finding local distributors for your craft beers
As we mentioned in the article, most of the beer in China will be sold out-of-home, especially craft beers. This means, that you need to have local distributors, that will help you sell your beers in Chinese bars and restaurants so that you reach the right audience offline.
Distributors don’t want to work with brands that don’t have a presence in China, because for them it’s not a safe option. It means that you need to work on your branding and reputation first so that you will be able to attract the right distributors.
We will help you find distributors in China!
Finding distributors is not easy, as there are thousands of them, working on different brands, with different goals in mind. At GMA, we have a huge base of distributors for any industry, that can help you sell your products online (on e-commerce websites) and offline so that you establish your presence in the Chinese beer market.
Gentlemen Marketing Agency, a team of specialists marketers, based in Shanghai, can help you with your business in China. Over 10 years we helped more than 600 brands reach and exceed their goals in the Chinese market. Our team of experts can help you, starting from market research, web design, and Baidu SEO, to social media management, and KOL marketing.
Don’t hesitate to leave us a comment or contact us. We offer a free discovery consultation, where we will learn about your brand and check how we can help. We invite you to leave us a comment or contact us, so that our experts can contact you for further development.