中国白酒报告英语.doc

Alcoholic Drinks - China Euromonitor International : Country Market Insight June 2008 Alcoholic drinksChina Euromonitor InternationalPage i List of Contents and Tables Executive Summary.1 Strong Market Performance Driven by Economic Growth .1 Domestic Players Rise To Lead the Market.1 More Foreign Companies Stirs Up the Competitive Environment1 Specialist Shops Start To Catch Attention.1 Forecast Growth Expects To Be Flat Due To Market Consolidation .1 Key Trends and Developments.1 Strong Demand Drives Prices Up1 Olympic Game Starts To Pre-heat the Market 2 Polarised Consumer Preference Prevails3 Growing Number of Young Drinking Consumers4 Modern Lifestyles Brings More Occasions on Which To Consumer Alcoholic Drinks.5 Specialist Retailers.5 Summary 1Leading Specialist Retailers 20066 Market Merger and Acquisition Activity6 Summary 2Speculated Merger and Acquisition Activity 2006-2007 7 Territory Key Trends and Developments7 East China7 Mid China10 North and Northeast China11 Northwest China 15 South China19 Southwest China 21 Market Background.22 Legislation .22 Taxation and Duty Levies .23 Table 1Taxation and Duty Levies on Alcoholic Drinks 2007.23 Table 2Typical Wholesaler and Retailer Off-trade Mark-ups by Selected Sectors 200724 Table 3Selling Margin of a Typical Beer Brand 2007 - Tsingtao .24 Table 4Selling Margin of a Typical Domestic Wine Brand 2007 Great Wall24 Table 5Selling Margin of a Typical Imported Wine Brand 2007 Jacobs Creek .24 Table 6Selling Margin of a Typical Domestic Spirits Brand 2007 - Jinliufu25 Table 7Selling Margin of a Typical Imported Spirit Brand 2007 Johnnie Walker Black Label25 Operating Environment 25 Market Indicators26 Table 8Retail Consumer Expenditure on Alcoholic Drinks 2002-200726 Market Data .26 Table 9Sales of Alcoholic Drinks by Sector: Total Volume 2002-2007.26 Table 10Sales of Alcoholic Drinks by Sector: Total Value 2002-2007 26 Table 11Sales of Alcoholic Drinks by Sector: % Total Volume Growth 2002-200727 Table 12Sales of Alcoholic Drinks by Sector: % Total Value Growth 2002-2007.27 Table 13Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade split: Volume 200727 Alcoholic drinksChina Euromonitor InternationalPage ii Table 14Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade split: Value 200727 Table 15Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade split: % Volume 200728 Table 16Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade split: % Value 200728 Table 17Sales of Alcoholic Drinks by Region: Total Volume 2002-200728 Table 18Sales of Alcoholic Drinks by Region: Total Value 2002-2007.28 Table 19Sales of Alcoholic Drinks by Region: % Total Volume Growth 2002-200729 Table 20Sales of Alcoholic Drinks by Region: % Total Value Growth 2002-200729 Table 21Company Shares of Alcoholic Drinks by Global Brand Owner 2003-2006 .29 Table 22Off-trade Sales of Alcoholic Drinks by Distribution Format: % Value Analysis 2007.30 Table 23Off-trade Sales of Alcoholic Drinks by Sector and Distribution Format: % Volume Analysis 2007.30 Table 24Forecast Sales of Alcoholic Drinks by Sector: Total Volume 2007-2012.30 Table 25Forecast Sales of Alcoholic Drinks by Sector: Total Value 2007-201230 Table 26Forecast Sales of Alcoholic Drinks by Sector: % Total Volume Growth 2007-201231 Table 27Forecast Sales of Alcoholic Drinks by Sector: % Total Value Growth 2007- 201231 Table 28Forecast Sales of Alcoholic Drinks by Region: Total Volume 2007-2012.31 Table 29Forecast Sales of Alcoholic Drinks by Region: Total Value 2007-2012.31 Table 30Forecast Sales of Alcoholic Drinks by Region: % Total Volume Growth 2007-201232 Table 31Forecast Sales of Alcoholic Drinks by Region: % Total Value Growth 2007- 201232 Definitions.32 Summary 3Research Sources.33 Alcoholic drinksChina Euromonitor InternationalPage 1 ALCOHOLIC DRINKS IN CHINA EXECUTIVE SUMMARY Strong Market Performance Driven by Economic Growth With expected GDP growing at more than 11% in 2007, Chinas economic growth reaches another new height. The economic growth also contributes greatly to the alcoholic drinks market, as the total volume sales is outperforming than 2006 in terms of actual volume sold. Upgrading of consumers expenditure structure in urban markets drives demand up during 2007. Domestic Players Rise To Lead the Market Domestic players remained strong in China, as many of them have been establishing very loyalty brands due culture and historical benefits. Moreover, the bull stock market in 2007 also gives a robust injection for big companies like China Resources Enterprise and Wuliangye Yibin Co Ltd. In less developed regions such as Northwest China and Mid China, the local brands appear to be dominant in beer and spirits as locals are more loyal to their own brands. More Foreign Companies Stirs Up the Competitive Environment Enters of foreign companies in beer and spirits is pushing the market to be more opened and competitive in first tier cities in China. First tier cities like Shanghai and Guangzhou are more open to foreign brands and the local consumption habit is more adoptive to exotic products. Increased volume and imported alcoholic drinks gives greater stern in those urban markets. On the other hand, domestic players are seeking joint ventures with foreign partners to start to explore the abroad. Specialist Shops Start To Catch Attention While chained hypermarkets and independent grocery stores are the main distribution channel for alcoholic drinks. The emergence of specialist shops is becoming important to wine and spirit manufacturers. The cost of sales in specialist is lower than hypermarkets, and the specialist better serves high end consumers in terms of product quality and variety. Moreover, manufacturers start to consider building their own specialist shops, for example, Kuichow Maotai and Wuliangye have already established a small scale of distribution network of their own. Forecast Growth Expects To Be Flat Due To Market Consolidation 2007 continues to be the year of consolidation, leading international players entered into China through acquisition of local brands. Leading domestic beer and spirits manufacturers also gained great strength from the flourish stock market, they are very active in mergers and acquisition. Competitive market environment is shifting from fragmented to concentrate. Small and medium sized domestic players will gradually withdraw from the market. KEY TRENDS AND DEVELOPMENTS Strong Demand Drives Prices Up National statistic data showed that in the first half of 2007, Chinas GDP grew at 11.5%, and the whole years GDP is expected to have similar growth. The hot economic growth not just brings high volume of retail consumption in China; it also starts to affect the consumers expenditure structure. More high quality and premium products are demanded in urban regions, and even in rural area, the demand for higher priced products is increasing. On the other hand, short of supply of domestic spirits contributes to the increasing in unit price. Suppliers are facing upward trend on unit price partially affected by strong demand from consumers. Alcoholic drinksChina Euromonitor InternationalPage 2 Current Impact Announced by National Bureau of Statistics, the consumer price index for the whole year of 2007 is expected to register at 4.5%, which might become a historical new height. The central government is facing greater pressure on stabilising the inflation rate and the retail price, as the nations fast economic growth might be offset by such inflation growth. Unit price increase is driven by several key factors, and strong demand is one of the generators. Most of the domestic spirit manufacturers feel that premium products are short of supply and even their distributors are yelling to increase the price. Leading brands like Wuliangye and Matai all increased their price from 10-15% during 2007. Increase in unit price for most of the spirit has further stimulates the demand as people have more disposable income to spend. Similar situation can also be applied to wine, where sales volume of mid/high end products increased faster than low end products, which represents an upward trend in unit price. Outlook The demand for alcoholic drinks will remain strong over the forecast period, and for spirits the demand will gradually shift from low end products to high end. As the high end spirits takes relatively longer, such as Scotch whisky and Chinese spirits, the future supply will not grow as fast as the demand projected. Therefore, it is very likely that unit price for spirits will continue to rise over the forecast period. However, for beer and wine, short of supply is very unlikely to happen. Players entered into mid/high end spirits will benefit from the rising unit price. Future Impact Strong demand of wine and spirit in China will cause the unit price to rise on global basis, and for the short term period, China will emerge to gain great deal of attention from global suppliers. More and more international brands will be eager to enter the market. In the mean time, the consolidation of domestic beer manufacturers will cause the market to be more competitive and unit price movement of beer and wine is expected to be less active than spirits. Over the forecast period between 2007 and 2012, Beer unit price is forecast to grow at 10%, wine at 6% and spirits at 38%. The rapid growth in unit price not only generated from the increasing demand for high end products, but also importantly the short supply of the premium products. Moreover, for beer, as the market consolidation is expected to continue to take place in China, leading manufacturers will gather more strength in regional and even national distribution channels, unit price of beer will have higher than wines growth rate over the forecast period. Olympic Game Starts To Pre-heat the Market While China is busy preparing for the upcoming Olympic game in 2008, all leading players in alcoholic drinks have already began their move in the promoting for the game. There is no doubt that the Olympic will have strong impact over the nations economic growth and international political status, it is also a golden chance for Chinese enterprises to label themselves to the world. Current Impact Although the Olympic sponsorship is very exclusive and only two of the leading Chinese companies gained such title, they are Tsingtao Brewery Co Ltd and COFCO Wines it is actually a new era for China to show the world of its dynamic strength and economic power. The post Olympic period will be a mile store for Chinas overall economic and as well as for alcoholic drinks. Manufacturers are highly recommended to take advantage of this great sport event in 2008 in China. Polarised Consumer Preference Prevails While many consumers traded down to cheaper options, high-end premium alcoholic drinks have shown noticeable growth, backed by new products launches and comprehensive marketing efforts. At the opposite end of the market, sales of low-end offerings such as economic lager and low-end Chinese spirits have also been enjoying healthy growth. Different pricing strategies result in different competition environment. Current Impact When consumers become richer in the review period, they are likely to choose the premium whisky or wine products in the pubs and bars for the positioning of these products is indulgent and luxury. Meanwhile, the premium lager brands are trying to enlarge its distribution channels. The imported brand Corona was taken over by Budweiser Wuhan International Brewing Company Ltd in the beginning of 2007. Thanks to Budweisers established strong sales net in both on-trade and off-trade channels, Corona is expected to have the better performance. Meanwhile, when choosing wine and spirit products, particularly in the off-trade channels such as supermarkets/hypermarkets, consumers are usually price conscious and willing to buy low to mid range products. High end products of both domestic and imported brands are mainly available in the wine specialists and on-trade outlets. In addition, if they want to buy alcoholic drinks as a gift or appear to some important occasions, they are likely to spend more. Premium spirits in China tend to compete with each other through packaging and pricing. For example, one of the super-premium Remy Martin LOUIS XIII Black Pearl is sold at RMB 70,000. Economy priced products tend to compete each other with claim of local taste. For example, Beijing Er Guo Tou is one of the famous spirit in 1970s and 1980s, there are several companies making Er Guo Tou in Beijing. Beijing Redstar Co Ltd made their label to be the original Er Guo Tou since 1949. Outlook Alcoholic drinksChina Euromonitor InternationalPage 4 Polarisation of alcoholic drinks is expected to persist over the forecast period with economic products penetrating to more territories, while premiumisation will determine the value growth of alcoholic drinks products. Pricing remains essential to shaping the brand image of alcoholic drinks such as whisky and grape wine. At the same time, increasingly sophisticated consumers may look for premium brands/alcoholic drinks to enhance their public image and fit in with their pursuit of a certain lifestyle. This niche group of relatively affluent consumers should drive demand for premium and super-premium alcoholic drinks such as whisky, grape wine and premium beer. Future Impact As such, international players are expected to bring in more of their premium products while domestic players may use the advantage on their established distribution network with both low to high range product lines in China. Mean while, they will use the low-end products to open more markets and attract mass consumers. China Resource, Leading player of beer industry, has adopted different pricing of different brands strategy since 2003. It uses the price advantage of its low-end brand Snow to expand across most areas in China. Champagne, cognac, premium vodkas will get more popular in first tier cities along with the growing consumer preference to high end products. The growing conception of drinking premium exotic alcoholic drinks is becoming a very fashionable act. Celebrates and rich consumer group will be pursuing such trend over the forecast period. As more coastal cities like Shanghai and Guangzhou are emerging to be international business centres, the demand for premium imported alcoholic drinks will continue to speed up over the forecast period. Growing Number of Young Drinking Consumers The total number of young adults has been rising for more than two decades but peaked in 2002 at 448 million (35% of total population). Despite no legal controls defined by the Chinese government, Chinese consumers generally do not start drinking until 18 years old. The age of 18 is believed to be the boundary between teenagers and adults. Thus the rising proportion of young adults translates into a growing proportion of younger drinkers, who have an increasing influence on the markets. Drinks which are popular among these younger drinkers have opportunities to do better, particular beer and spirits consumption in on-trade channels. Current Impact In order to approach young consumers, manufacturers have launched a series marketing activities to advertise a fashion and trendy brand image. On June 6th 2007, the company launched a new campaign Snow Beer Yong Chuang Tian Ya with Hunan TV, which is a reality TV show which invites famous celebrities and ordinary audience to participate in the specific hiking activity. This TV show is aiming to let more young consumers to know Snow brand across China. Hennessy VSOP presented its Global Art of Mixing in the whole year of 2007. From march, Hennessy has brought more than 30 music parties in which inviting both local and global singers in Beijing, Shanghai, Guangzhou and other 10 big cities in China. Outlook The percentage of younger drinkers is likely to grow, with 9% growth rate in 2010. As such, the influence of younger drinkers is likely to strengthen even further. Drinks favoured by younger drinkers are expected a bright future. This applies mostly to the image of certain types of alcoholic drinks. If a drink is perceived as trendy by the young generation of drinkers, it is more likely to be favoured over drinks which have an old-fashioned, traditional image such as traditional rice wine and Chinese white spirits. Meanwhile, the positioning and marketing of alcoholic drinks will be crucial in how popular the drinks are among younger drinker. Future Impact While companies are unlikely to benefit from taking the approach of ignoring their main consumer base of drinkers, which includes long-term and not necessarily young drinkers, it will still be worthwhile to try to develop a trendy image for certain brands in their portfolio, through advertising and promotional campaigns. Advertisements in mass media will be one way to communicate a fashionable image to consumers. In addition, Alcoholic drinksChina Euromonitor InternationalPage 5 marketing activities in nightclubs and pubs, especially those patronised by the younger crowd, may also prove to be effective in building a fashionable image for specific brands among the young generate of Chinese drinkers. Modern Lifestyles Brings More Occasions on Which To Consumer Alcoholic Drinks The demand for wine and spirits is growing in tandem with continued lifestyle changes in China. Increased exposure to Western consumption habits through the mass media and overseas trips/stays have seen a marked increase in consumer awareness of foreign alcoholic drinks such as grape wine and with western spirits such as vodka and whiskey. Current Impact This trend boosted alcoholic drinks across the board, with total volume sales expanding by 9% in volume terms in 2007 over the previous year. Niche products with a growing and fashionable urban appeal saw the strongest growth,