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Western Spirits - China - September 2016

“China’s Western spirits market is under pressure and reflects how the anti-extravagance campaign has affected the luxury sector. Market recovery has been seen and future growth can be projected based on current forecasts and trends, such as premiumisation in the non-business sector and positive consumer indicators. While the bulk of the market is represented by leading market players, they still need to earn consumer trust and confidence, by educating and providing sufficient brand and product knowledge via marketing, diversifying occasions and channels to grasp sales, and improving positive attitudes, and so on. There is scope for growth of Western spirits in China, and increasingly sophisticated Chinese consumers mean that there is market space for innovation and experimentation.”
– Lei Li, Research Analyst

This report discusses the following key topics:

  • How to position Western spirits under anti-extravagance
  • How to target women drinkers creatively 
  • How to effectively use online channels to promote Western spirits

This Report covers all Western spirits (distilled beverages) and liqueurs (flavoured with fruit and herbs) in both retail and on-trade (HoReCa) channels, produced in Western markets and then sold in China, as follows:

  • Anis/absinthe includes absinthe, arak and similar spirits.
  • Brandies and Brandy type. This includes spirits derived from grapes/grape skins and includes Cognac, Armagnac, fruit-based and traditional brandies and related spirits.
  • Rum/sugar cane-based spirits. This includes white and dark rum, aguardiente and other local, sugar cane-based spirits.
  • Tequila includes tequila of all ages.
  • Vodka-based spirits include premium, standard and economy vodkas, aquavit and Scandinavian schnapps.
  • Whiskies include Scotch whisky, Irish whiskey, bourbon and other local whiskies.

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Table of contents

  1. Overview

    • What you need to know
      • Products/themes covered in this Report
      • Executive Summary

          • The market
            • Figure 1: Western spirits retail market by value in China, 2011-21
            • Figure 2: Western spirits retail market by volume in China, 2011-21
          • Key players
            • Figure 3: Western spirits market share, by value, China, 2015
            • Figure 4: Western spirits market share, by volume, China, 2015
          • The consumer
            • Women drink liqueur and rum more than men
              • Figure 5: Drinking behaviour, by gender, February 2016
            • Business occasions and special events stand out for high earners
              • Figure 6: Drinking occasions, by monthly personal and household incomes, February 2016
            • Retail channels dominate off-trade sales
              • Figure 7: Purchase channels, February 2016
            • Word-of-mouth is important among older Western spirits consumers
              • Figure 8: Consumer attitudes in the last 12 months, by age groups, February 2016
            • What we think
            • Issues and Insights

              • How to position Western spirits under anti-extravagance
                • The facts
                  • The implications
                    • Figure 9: Jägermeister Liker (Herbal Liqueur), Ukraine, August 2016
                  • How to target women drinkers creatively
                    • The facts
                      • The implications
                        • Figure 10: Sohana Diet Vodka, India, August 2016
                      • How to effectively use online channels to promote Western spirits
                        • The facts
                          • The implications
                          • The Market – What You Need to Know

                            • A reduced current market and a gradually recovering future market
                              • Anti-extravagance has negative impact on premium consumption
                                • Increased consumer expenditure encourages volume consumption
                                  • Rising overseas travels diminish domestic demand
                                    • Booming e-commerce as a key growth engine
                                    • Market Size and Forecast

                                      • Premiumisation is key
                                        • A slow current market with growth on the horizon
                                          • Figure 11: Western spirits retail market by value in China, 2011-21
                                          • Figure 12: Western spirits retail market by volume in China, 2011-21
                                          • Figure 13: The Western spirits retail market in China, by value and volume, 2011-21
                                      • Market Drivers

                                        • The aftershock of anti-extravagance pressures premium consumption
                                          • Rising consumer expenditure would help volume growth
                                            • Figure 14: Spirits/RTD, global market performance
                                          • A prosperous outbound travel market threatens domestic spending
                                            • Figure 15: Outbound tourism from China, 2010-15
                                          • Increased purchases via online channel
                                            • Figure 16: Purchase channels of Western spirits drinks, February 2016 vs. June 2015
                                          • Chinese lifestyles influenced by Western culture and entertainments
                                          • Key Players – What You Need to Know

                                            • Market share recovery by leading players
                                              • Flavour is a main theme of Western spirit innovation
                                              • Market Share

                                                • The top players show overall market share rebound
                                                  • Figure 17: Value and volume share of China’s Western spirits retail market, 2013-15
                                                • Share of sales by online format
                                                  • Figure 18: Market share of China’s online retail B2C market, by trading volume, Q4 2015
                                                  • Figure 19: Sales revenue of key shopping websites specialising in alcoholic drinks, 2013-15
                                              • Who’s Innovating?

                                                  • Figure 20: Product claim trends of Western spirits in China, 2014-16
                                                • Cream liqueur – A cross-category with coffee
                                                  • Figure 21: Selected cream liqueurs, China, 2016
                                                  • Figure 22: Selected coffee flavoured Western spirits, China, 2015-16
                                                • Fruit flavoured spirits
                                                  • Figure 23: Selected fruit flavoured Western spirits, China, 2016
                                                  • Figure 24: Selected Mad Head range, China, 2015
                                              • The Consumer – What You Need to Know

                                                • Whisky/bourbon is most consumed; gin the least
                                                  • Top drinking barrier is the lacking of Western spirits knowledge
                                                    • Gender plays a key role on perceptions of different Western spirits
                                                      • Product knowledge and Western culture influence are significant
                                                      • Drinking Behaviour

                                                        • Whisky/bourbon is the most popular – gin consumption is lacking
                                                          • Liqueur and rum are preferred by women
                                                            • Figure 25: Drinking behaviour, February 2016
                                                            • Figure 26: Drinking behaviour, by gender, February 2016
                                                            • Figure 27: Eros Apricot Liqueur, Australia, June 2016
                                                            • Figure 28: RumChata Go Chatas Horchata with Rum Cream Liquor, US, July 2016
                                                        • Usage Barriers

                                                          • Lack of Western spirits knowledge is the essential usage barrier
                                                            • Figure 29: Usage barriers, February 2016
                                                            • Figure 30: Johnnie Walker Black Label 12 Nian Tiao Pei Xing Su Ge Lan Wei Shi Ji (Blended Scotch Whisky 12 Years), China, January 2016
                                                        • Perceptions towards Types of Western Spirits

                                                          • Gender as a perception differentiator on various Western spirits types
                                                            • Figure 31: Correspondence analysis – Perceptions towards different types of Western spirits, February 2016
                                                            • Figure 32: Correspondence analysis – Perceptions towards different types of Western spirits, by gender, February 2016
                                                            • Figure 33: Verpoorten Original Eierlikör (Original Egg Liqueur), Austria, June 2016
                                                        • Drinking Occasions

                                                          • Business occasions top the ranking
                                                            • Socialising and special events posing consumption opportunities
                                                              • Figure 34: Drinking occasions, February 2016
                                                              • Figure 35: Drinking occasions, by monthly personal and household incomes, February 2016
                                                          • Purchase Channels

                                                            • Brand speciality boutiques have the highest penetration
                                                              • High earners favour duty free shops
                                                                • Figure 36: Purchase channels, February 2016
                                                                • Figure 37: Purchase channels, by monthly personal and household incomes, February 2016
                                                            • Consumer Attitudes

                                                              • Product knowledge and culture influence are key factors
                                                                • Word-of-mouth is critical for Western spirits especially among seniors
                                                                    • Figure 38: Consumer attitudes in the last 12 months, February 2016
                                                                    • Figure 39: Consumer attitudes in the last 12 months, by age groups, February 2016
                                                                • Mintropolitans

                                                                  • Who are they?
                                                                    • Figure 40: Demographic profile of Mintropolitans versus non-Mintropolitans, Western spirits, by gender, age, and marital status, February 2016
                                                                    • Figure 41: Demographic profile of Mintropolitans versus non-Mintropolitans, Western spirits, by monthly personal income, monthly household income, and city tier, February 2016
                                                                  • Online channels and on-trade occasions are more appealing to MinT
                                                                    • Figure 42: Purchase channels, by Mintropolitans versus non-Mintropolitans, February 2016
                                                                    • Figure 43: Drinking occasions, by Mintropolitans versus non-Mintropolitans, February 2016
                                                                • Appendix – Methodology and Definitions

                                                                  • Methodology
                                                                    • Fan chart forecast
                                                                      • Mintropolitans – Definition
                                                                        • Abbreviations

                                                                        Companies Covered

                                                                        To learn more about the companies covered in this report please contact us.

                                                                        Western Spirits - China - September 2016

                                                                        £3,195.84 (Excl.Tax)