A Nielsen study found that while baijiu sales rose in 2014, the long-term health of the industry will depend in part on how it deals with a younger generation of drinkers who have increasingly sophisticated tastes and spending power, reports Campaign Asia.
“Our study shows that, most of the younger consumers started to discover alcoholic beverages in their 20s, and they always start with beer,” [Nielsen China managing director Kiki] Fan said. “The key to Baijiu market growth is dependent on younger generations having a better understanding of Baijiu as well as the unique culture associated with it.”
Data from 1,100 hypermarkets in 22 cities showed sales rose 5.5 percent in 2014 in comparison to 2013, a tough year when sales fell 2.7 percent.
The growth is a positive sign for the baijiu industry, hit hard by the ongoing government austerity program. Campaign Asia says, “the gain was largely attributed to the enhanced promotions from Baijiu manufacturers, which also led to growth during off-peak seasons.”
china.org.cn reports that the study shows an increasing amount of baijiu being consumed beyond key holiday periods:
According to Nielsen data, the Chinese New Year and Mid-Autumn Festival are still the two most important holiday for Baijiu sales. However, in 2014, sales during these two main holidays declined by 9 percent and 1 percent compared with the sales in 2013.
On the contrary, the sales growth rate in off-peak seasons grew by 6 percent. And in off-peak seasons, product for self-use grew 7 percent, compared with 4-percent growth for products in gift-packaging format.
This suggests the baijiu sector is rebounding due to sales from consumers at large in the wake of the austerity program’s hit on pricey spirits used in official and business entertaining. So, too, do the numbers on baijiu prices:
Nielsen found baijiu priced below rmb100 rose 3 percent in 2014 compared to 2013, while that priced rmb300 to rmb700 rose 8.6 percent, in contrast to a drop of 9.1 percent for those priced over rmb700.
“It shows the middle-to-low priced Baijiu has gradually become an important engine to drive Baijiu’s future growth. With Baijiu returning to mass consumption, further development of the retail channel will help promote Baijiu’s future growth in the “new-normal” economy,” Fan pointed out.
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