By Subramania Bhatt
Published Dec 2, 2024
Changes in drinking habits offer opportunities for global beverage brands.
Subramania Bhatt is CEO and founder of Singapore-based China Trading Desk.
China is in the midst of a major cultural shift. New data reveals that Chinese consumers largely prioritize dining out and entertainment over travel and savings, with a significant chunk of disposable income now spent on social experiences.
As travel and savings move lower down their priority list, and restaurants and social experiences emerge as the preferred way for people to spend their wages, what role does alcohol play in this new Chinese culture?
According to China Trading Desk's Chinese Alcohol Consumption Survey 2024, alcohol's role is quite significant in the cultural reset that's currently shaking up China's consumer economy.
The report's insights are gleaned from more than 5,000 respondents.
With the global beverage industry evolving, China is now front and center. The country's alcohol market went through a major transformation in 2024, with sales hitting a new high of $340 billion. This shows that booze is now completely integrated into the lives of Chinese people.
Deeply embedded in thousands of years of Chinese culture, tipplers have long favored strong liquors like baijiu (a traditional Chinese spirit) and huangjiu (rice wine). While baijiu still dominated sales in 2024 at $167 billion, recent data shows drinkers moving toward lighter beverages like wine and beer. This has resulted in a heightened interest in imported drinks and a corresponding increase in demand for U.S. wine and beer brands. This evolving taste reflects a move toward more relaxed, Western-style leisure, creating a prime opportunity for liquor brands to strengthen their presence in the Chinese market.
These changes amount to nothing less than a cultural reshaping, which offers new opportunities for global beverage brands. Understanding these alcohol consumption trends can help drink marketers navigate the current and future landscape of the Chinese market.
One factor behind recent trends in the beverage industry is shifting demographics in age, gender and education level. While alcohol consumption has traditionally been more culturally acceptable for men than for women, according to a 2023 article in the journal Alcohol and Alcoholism, 65.7% of today's leading alcohol consumers in China are between 18 and 34 years old, 56% are women and 52.9% hold a bachelor's degree.
This highlights the importance of tailoring campaigns to resonate with young, female and educated demographics. Beverage marketing managers should also keep in mind the urban dominance for alcohol consumption found in the study: 71% of drinkers are in Tier 1 and 2 cities, which represent major urban centers.
Local brand dominance is also fading. According to the China Trading Desk report, Chinese consumers are now more open to new beverages than in recent years, with no sense of loyalty to any one brand or beverage provider.
About 60% of those surveyed said they're willing to switch brands based on discounts, nearly 50% are likely to try a different brand based on promotions or deals being offered, and almost 80% will decide based on taste. Social media promotions and digital discovery on platforms like Douyin and WeChat are driving this change. These platforms are helping consumers find new beverages and shape their beverage choices -- particularly young, tech-savvy drinkers who fit the "Urban Adventurers" profile.
Chinese are also becoming more health-conscious in their approach to drinking, in part because of an increase in public health messages on the risks of daily alcohol consumption. Some 37.5% say they rarely drink alcohol and 60% drink only occasionally. Only 5.8% of consumers say they drink daily.
The research also illuminates Chinese preferences for specific types of alcohol and the occasions for their consumption. Beer (80%) and wine (55%) are at the top of the list in terms of what respondents said they drink, dominating alcohol consumption over hard alcohol by a wide margin, with whisky, baiju and other spirits at less than 20%.
Different settings and social contexts also influence drinking behavior. Some 31% of those surveyed said they drink during weekends or social gatherings, and 85% of those who imbibe prefer to do so only during social gatherings. Many Chinese consumers spend big on special occasions, which means that savvy brands should focus on positioning products for events.
As China continues to undergo rapid economic growth and social transformation, the preferences and purchasing behaviors of its consumers will evolve accordingly.
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