All you need to know before having a drink with consumers in China...

The UEFA Euro 2024 is in full swing. For retailers and brands in the UK, it's time to grab this opportunity to give exclusive offerings to increase alcoholic beverage sales. The reality is that an increase in sales generated from a singular promotional channel is insufficient to overcome the constraints on business expansion and stem the gradual decline of the alcoholic beverages market in the UK. Let's see some highlighted statistics.

What's happening and the forecast for the alcohol market in the UK?

• The overall beverage alcohol market in the United Kingdom is projected to experience a compound annual growth rate (CAGR) of -1% in both volume and value over the forthcoming 5-year period.
• The revenue generated domestically within the Alcoholic Drinks market, including sales from supermarkets and convenience stores, is forecasted to amount to US $30.4 billion by 2024, representing a 1.1% decline from the figures recorded in 2023.

• The UK's new excise duty regime has prompted many brands to decrease their alcohol content (ABV) to capitalize on the new regulations. However, this strategy is anticipated to present renewed challenges for the wine industry, particularly with further changes expected to be implemented by 2025.
• Spirits experienced the most significant impact last year, witnessing a 5% decrease in volumes. Projections from IWSR suggest a -1% CAGR for spirits between 2023 and 2028. Among spirits, gin faced the most substantial declines, with volumes plunging by 14%.
• The long-term decline in wine worsened in 2023, with volumes decreasing by 4%.
• Beer experienced a slight decline in volume by 2% in 2023, and it is projected to continue facing gradual decreases in the foreseeable future.

Likewise, growth is slowing. Let's look at China's statistics.

During the global recession, China is still the most potential market for alcoholic beverage

• China will continue to maintain its position as the leading country in terms of revenue generated from alcoholic beverages worldwide over the next five years.

• Research data from iiMedia Research indicates that in 2023, the largest proportion of alcohol consumers in China will be in the 31-40 age group, at 49.78%, followed by the 18-30 age group at 39.13%. There is a noticeable trend towards younger consumers driving market growth. Within the younger demographic, women are increasingly contributing to alcohol market spending. According to Nielsen's White Paper Instant Retail Alcohol, female consumption in the alcohol market has reached 31% in 2022, with young women aged 18-30 accounting for 47% of this consumption. The drinking preferences of younger generations differ significantly from older consumers, with a preference for low-alcohol beverages with a variety of flavors.

• The majority of Chinese alcohol consumers will prefer beer, wine, Baijiu, and spirits in 2023, with approximate proportions of 73.68%, 67.57%, 59.17%, and 33.43% respectively according to iiMedia Research. Additionally, approximately 50% of Chinese consumers are inclined to purchase wines imported from Europe. While the overall spirits market is expected to experience a volume decline of 4% through 2027, this is largely attributed to a decrease in the Baijiu category. Conversely, other major spirits categories such as whisky, gin/genever, vodka, agave, rum, and brandy are anticipated to see growth in sales volumes with healthy single-digit CAGRs. The beer market is forecasted to remain relatively stable (+0.2%) until 2027, but premium-plus volumes are projected to increase at a CAGR of +6% as consumers opt for higher-end products.

If you've decided to go for it, you might be interested in learning about some marketing plans for entering the Chinese market.

Our strategies

• Localized marketing

Incorporate elements of Chinese culture into your branding and storytelling to make a connection with local consumers. By taking advantage of special occasions like the Chinese New Year and Mid-Autumn Festival, you can quickly build your brand's reputation among Chinese consumers and create goodwill.

Chinese consumers with higher incomes are interested in the craft of making wines and spirits. Distilleries with a long history can tell their brand stories while integrating Chinese culture, or focus on pop culture that appeals to Gen Z.

Mixing the flavors of your products with different dining cultures can be enjoyed with a variety of cuisines in China. Consider creating special editions or flavors that appeal to Chinese consumers. Launching premium and limited edition products can meet the need for personalization among consumers.

• Social media seeding & digital sales channels

Focus on eCommerce channels. Data from iiMedia Research shows that 54.2% of surveyed Internet users purchase alcohol products through online channels. Utilize major Chinese e-commerce platforms like Tmall, JD.com, and Pinduoduo. Ensure your products are available online and invest in online advertising to drive traffic and sales.

Leverage Chinese social media platforms like Weixin/WeChat , Weibo, Xiaohongshu for Business , and Douyin (TikTok) to build brand awareness and engage with consumers. Create engaging brand content that tells your brand’s story and showcases your products.

• Drink with young generation

Connect with the younger crowd, understand their emotions, keep up with their changing preferences, and give them unique emotional and interactive experiences.

Incorporation of Chinese pop culture and teaming up with various industries like film, art, food, and fashion that appeal to the youth.

Introduce some low-alcohol and ready-to-drink products to cater to younger tastes.

Get popular celebrities or influencers to endorse or sample our products.

Join the drinking scene that young people love, and don't underestimate bars and restaurants. "Camping + Fine Wine" is a popular choice for consumers these days. Young glamping enthusiasts typically go for a mix of foreign wines and high-quality, slightly sweet sparkling wines. In lower-tier cities, people prefer to party and drink at restaurants, and they have high hopes for their future spending.

We're used to seeing double-digit growth in China every year. It might not happen again and gains could be a bit slower, but there's still lots of room for growth. Hope this article can help your business reach its growth goals. We can't wait to pop open the champagne and celebrate the growth of our business with you! ??

Reference

Alcoholic Drinks - China, Statista

Alcoholic Drinks - United Kingdom, Statista

No- and low-alcohol drinks outperform a declining UK alcohol market, IWSR

The Chinese Beverage Landscape: Alcoholic Beverage, Tractus

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