chinese beer answer Flashcards
market size
about 47 billion litres of beer
comparing market size
nearly twice the size of USA and much bigger than UK (sales volume)… should be thinking which part to target!
market growth volume
declining: predicted to continue (due to political and macro environment)
market growth value
increasingly rapid: possibly due to inflation
per capita data
relatively small compared to UK/USA, but the market isn’t saturated, so long term per capita consumption may be bigger
On and off trade explanation
drinking beer where you buy it vs. drinking elsewhere… creates 2 market segments with 2 different types fo customers and 2 different customer behaviours… and 2 different lines of distribution (implementation of strategy)
on and off trade value
China= 66:33 UK= 66:33 USA= 50:50
on and off trade volumeChina=
50:50
UK= 50:50
USA= 25:75
on and off trade conclusion
2 potentially serviceable markets, but one is not considerably bigger than the other!
china beer report
- Low average price; sales might be good, but average margins are thin
- Segmented market. Economy beer dominates (75% vol), but mid-priced and premium more profitable. Inked to geographic, demographic, psychographic and behaviourial variables. Eg geographically premium drinkers found in geographic segments eg Tier 1 cities (Beijing, Shanghai).
- Mid-price and premium beers growing (by value and volume), especially on-trade. Including imported beers.
- Interested in ‘exotic beer’, flavoured beers, craft beers.
- Trend towards can and PET rather than glass bottles
- Alliances between western and Chinese brew (JV)
psychographic
Chinese aspiring to westerners, so prefer western brands
interest in ‘exotic beers’
flavoured and craft beers
trends towards can and PET
rather than glass bottles… Chinese don’t necessarily see glass as premium
alliances…
between Western and Chinese brewers: many companies are joint ventures
short term downturn in market volume
suggested by passport: but NEXIS data seems to contradict
segmented market
economy beer dominates (75%), but mid-price and premium more profitable… growing by value and volumes, premium imported
why is the market growing by value but decreasing by volume?
mid-priced and premium beer is growing by value and volume as people drink less beer on average but drink more premium beers (trading up), or inflation
Nexis data is…
old, good place to start though, to learn from history
Western entry to Chinese beer market
not a new idea!… need to think about competitions and accessibility
success requires…
resources, resolve and good strategy
Chinese brewers…
are strengthening and expanding: new competition, harder to get into the market
second wave into market…
mergers, acquisitions and partnerships
market is attractive on…
size, value growth and per capita data
market is unattractive on…
market is unattractive on…
price, costs and profitability
Market needs to be…
Market needs to be…
segmented, as it is huge
competition and accessibility
history suggests it’s a tough market… need the right strategy as Western companies already in place and Chinese getting stronger especially in premium beers
Average price of beer in China
Average price of beer in China
very low: problem as the company provide expensive premium beers
profit…
unlikely the company would make a profit
strategy…
concentrate resources in one market segment, low volume/high margin niching, other
low volume/high margin niching
target premium segment: e.g. on or off trade OR inner city wealthy professionals
