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China Spirits Market Report: 2016 Edition

China Spirits Market Report: 2016 Edition

Spirit consumption in China is a centuries old tradition that has found archeological evidence in ancient history. Due to deep rooted prevalence of spirits in Chinese culture, the modern spirits market is primarily dominated by local drinks like Baijiu and Huanjiu. However, trade and exchange of goods and services have brought in global spirits into the Chinese markets, making the current spirits market of China a mixture of traditional drinks like Baijiu and Huanjiu along with the existence of wine beer and other hard drinks like Gin, Whisky, Vodka, etc.

The Chinese spirits industry can be classified into four segments, namely, Baijiu, Huanjiu, Wine and Beer. Baijiu can further be classified based on the fragrance and Huanjiu can be classified based on the taste, production method used, alcoholic content and the years aged. Wine can be classified based on the place of origin, taste, grape variety and the method of production. Beer is of different types and styles like ale, lager and cask ale.

Alcohol consumption in China has been influenced by various social and cultural changes that have taken place over the years. As China’s integration with the world increased, preferences moved away from traditional drinks like Baijiu and Huanjiu to more internationally known brands and products, especially the ones that are low on alcohol content like Wine and Beer. But with the exhaustion of the demographic dividend and increase in greying population, consumption patterns begun to revert back. However, the increasing trend of demand for alcohol has sustained any economic, social or cultural change. The key factors driving this growth in China’s spirit market are an increase in Gross Domestic Product (GDP) Per Capita, rising population of women, higher Per Capita Disposable Income, strong demand for traditional drink Baijiu, and increase in production capacity over the years.

The report provides an overview of the entire spirits industry of China including the major developments that are expected to accelerate its growth. Rapid consolidation of the market, better preference of mass-to-mid segment in the years ahead, rising per capita alcohol consumption in rural areas that has surpassed urban areas, changes in the consumption patterns and the most recent, digital innovations that took place are such developments. However, China’s spirits industry faces certain challenges. The anti-extravagance campaign of 2012 continues to affect the spirits market in China, relatively high excise/liquor taxes of Baijiu may discourage manufactures and signs of limited volume growth may be visible as per capita alcohol consumption has already surpassed the global level. Increased number of loss- making Baijiu enterprises, health and safety concerned along with distinct local tastes of the people of China are other such challenges that manufactures may have to face.

China’s spirits market is rather fragmented as far as competition is concerned. Unlike, the global spirits market that is dominated by two large companies Diageo and Pernod Ricard, the Chinese Spirits market faces stiff competition from a number of domestic firms. However, due to the large share of Baijiu in China’s spirit consumption, three companies namely Moutai, Yanghe and Wuliangye prove to be key players in the industry.

By combining SPSS Inc.’s data integration and analysis capabilities with our relevant findings, we have predicted the future growth of the industry. We employed various significant variables that have an impact on this industry and created regression models with SPSS Base to determine the future direction of the industry. Before deploying the regression model, the relationship between several independent or predictor variables and the dependent variable was analyzed using standard SPSS output, including charts, tables, and tests.


1. Spirits Industry
1.1 Overview
1.2 Classification
Table 1: Classification of China’s Spirits Industry
1.2.1 Baijiu
Table A: Classification of Baijiu
1.2.2 Huanjiu
Table B: Classification of Huanjiu
1.2.3 Wine
1.2.4 Beer
2. China’s Spirits Market
2.1 China’s Spirit Market by Value
Table 2: China’s Spirit Market by Value (2008-2015E)
2.2 China’s Spirit Market by Volume
Table 3: China’s Spirit Market by Volume (2008-2015E)
2.3 China’s Spirit Market by Product
2.3.1 China’s Spirit Market Value by Product
Table 4: China’s Spirit Market Value Share by Product (2015E)
2.3.2 China’s Spirit Market Volume by Product
Table 5: China’s Spirit Volume Share by Product (2008–2014)
2.3.3 China’s Baijiu Market by Value
Table 6: China’s Baijiu Market by Value (2008-2015E)
2.3.4 China’s Baijiu Market by Volume
Table 7: China’s Baijiu Market by Volume (2008-2015E)
2.3.5 China’s Domestic Wine Market by Value
Table 8: China’s Domestic Wine Market by Value (2008-2015E)
2.3.6 China’s Domestic Wine Market by Volume
Table 9: China’s Domestic Wine Market by Volume (2008-2015E)
2.3.7 China’s Imported Wine Market by Value
2.3.8 China’s Imported Wine Market by Volume
Table 11: China’s Imported Wine Market by Volume (2008-2015E)
2.3.9 China’s Domestic Beer Market by Value
Table 12: China’s Domestic Beer Market by Value (2008-2015E)
2.3.10 China’s Domestic Beer Market by Volume
Table 13: China’s Domestic Beer Market by Volume (2008-2015E)
2.3.11 China’s Imported Beer Market by Value
Table 14: China’s Imported Beer Market by Value (2008-2015E)
2.3.12 China’s Imported Beer Market by Volume
Table 15: China’s Imported Beer Market by Volume (2008-2015E)
3. Market Dynamics
3.1 Growth Drivers
3.1.1 Increasing GDP Per Capita
Table 16: China’s GDP Per Capita (2008-2014)
3.1.2 Rising Per Capita Disposable Income
Table 17: Per Capita Disposable Income of Urban Households (2008-14)
3.1.3 Rising Population of Women
Table 18: Female Population in China (2008-14)
3.1.4 Strong Demand for Baijiu from Favorable Price
Table 19: Average Retail Price of High-End Baijiu (2011-14)
3.1.5 Increase in New Production Capacity of Baijiu
Table 20: Production Capacity of Baijiu (2008-2013)
3.2 Key Trends and Developments
3.2.1 Rapid Consolidation of China’s Spirit Market
Table C: Major Intra Industry M&A’s (2013-14)
3.2.2 Mass-to mid-End Products to Outperform
Table D: Baijiu Sector by Product Segmentation (2015)
Table 21: Baijiu Market Value CAGR by Product Segments (2014-2020E)
Table 22: Baijiu Sales Volume CAGR by Product Segments (2014-2020E)
3.2.3 Changing Consumption Patterns
3.2.4 Digital Innovation
3.3 Challenges
3.3.1 Anti-extravagance Campaign
Table 23: China’s Spirit Product Sales Growth (Pre and Post 2012)
Table 24: China’s Spirit Product Sales Volume Growth (2012-14)
3.3.2 Relatively High Excise Tax for Baijiu in China
Table 25: Excise/Liquor Tax on Pure Alcohol by Country (2014)
3.3.3 Limited Volume Growth of Spirits in China
Table 26: Annual Per Capita Pure Alcohol Consumption
3.3.4 Increased Number of Loss-Making Baijiu Enterprises
Table E: Number of Loss Making Baijiu Enterprises (2013-14)
3.3.5 Health and Safety Concerns
3.3.6 Distinct Local tastes
4. Competitive Landscape
4.1 Global Spirit Market by Companies
Table 27: Global Spirit Top Companies Revenue Comparison (2013/14)
4.1.1 Global Premium Spirit’s Volume by Companies
Table 28: Global Premium Spirits Volume Share by Company (2014)
4.1.2 Global Spirit’s Company Revenue Growth Comparison
Table 29: Global Spirits Company Revenue Growth Comparison (CAGR 2010-2014)
Table 30: Global Spirit Company Revenue Growth Comparison (CAGR 2015E-17E)
4.2 China’s Spirit Market by Companies
Table 31: Research and Development Expenditure Comparison of Companies (2014)
4.2.1 China’s Baijiu Market by Companies
Table 32: Baijiu Market Share by Revenue (2014)
4.2.2 China’s Baijiu Revenue Comparison by Companies
Table 33: China’s Baijiu Revenue Comparison by Company (CAGR 2010-14)
Table 34: China’s Baijiu Revenue Comparison by Company (CAGR 2015E-17E)
4.2.3 China’s High-End Spirit Market by Companies
Table 35: China’s High-End Market Revenue Share by Company (2014)
Table 36: China’s High-End Market Revenue Share by Company (2011-15E)
4.2.4 China’s High-End Spirit Market Volume by Companies
Table 37: China’s High-End Market Volume Share by Company (2011-15E)
4.2.3 Competition in Sales Network
Table F: Number of Sales Persons of Domestic Producers (2014)
4.2.3 Global Spirit & China’s Baijiu Sales Growth Comparison
Table 38: Global Spirit and China’s Baijiu Sales Growth Comparison (2010-14)
5. Company Profiles
5.1 Kweichow Moutai Co. Ltd
5.1.1 Business Overview
Table 40: Moutai Revenue by Product Segments (2013-2015E)
5.1.2 Financial Overview
Table 41: Moutai’s Revenue and Net Income (2010-2015E)
5.1.3 Business Strategies
5.2 Yanghe
5.2.1 Business Overview
5.2.2 Financial Overview
Table 42: Yanghe Revenue and Net Income (2010-2015E)
5.2.3 Business Strategies
5.3 Yibin Wuliangye
5.3.1 Business Overview
5.3.2 Financial Overview
Table 43: Yibin Wuliangye Revenue and Net Income (2010-2015E)
5.3.3 Business Strategies
5.4 Diageo plc.
5.4.1 Business Overview
Table 44: Diageo Sales Volume Share by Region (2015*)
Table 45: Diageo Revenue Share by Region (2015*)
5.4.2 Financial Overview
Table 46: Diageo Revenue and Net Income (2011-2015)
5.4.3 Business Strategies
6. Market Outlook
6.1 China’s Spirit Market Forecast
Table 47: China’s Spirit Market Forecast (2014-2018F)
6.2 Forecast Methodology
Table G: Dependent and Independent Variables
6.2.1 Dependent and Independent Variables
6.2.2 Correlation Analysis
Table H: Correlation Matrix
6.2.3 Regression Analysis
Table I: Model Summary – Coefficient of Determination
Table J: Regression Coefficients Output

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