Analysis of beer market in China (on Russian)
Beer market of Ukraine: big three losing weightIn 2016, fast increase of excises and resulting price spike stood in the way of the beer market stabilization. Most of competition (as well as mass sorts) moved to the economy segment of the market. The biggest losses were incurred by the leading three, especially Obolon, which again experienced pressure after reallocation of Efes market share. However, one should already speak of TOP-4. Group Oasis CIS (PPB) became a strong player and competitor to transnational companies. Besides the net sales of many regional medium breweries look rather good and 16-fold cost reduction wholesale trade license for craft brewers opens up a possibility of rapid growth in 2017.
Analysis of beer market in China
China’s transition to a “new normal” reality backfired on the brewing industry unexpectedly. Stagnation and subsequent market decline resulted from dynamic social and economic changes. There has emerged a “two speed” market where the medium class significance is growing, yet the share of main beer consumers, “blue collar” is decreasing. Also the inflow of consumers is shrinking, as demographics stopped being a growth driver. Finally, beer is giving way to other alcohol drinks....
China. Beer moves to premium
Beer consumption grew at a weak pace, at least for the mass product, probably impacted by the slowdown in GDP growth and even rainy weather. Although the Internet grew as a beer sales channel, the beer market remained relatively regional and fragmented.
At the same time, strong demand for premium brands continued, reflecting the broader consumer shift to quality. As Chinese brands added premium offerings gains, depressed oil prices also helped enhance airline profitability. Despite these improvements airlines continued to score low in RepZ, the BrandZ™ measurement of corporate reputation.
Snow Beer introduced more premium variations. Although not well known outside of China, Snow Beer leads the world in total consumption. Tsingtao Beer faced pressure because of its mid-market positioning and its large exposure in restaurants, where government efforts to retrain extravagance impacted sales.
Harbin Beer, one of the oldest breweries in the north, successfully increased popularity. Pearl River, especially strong in the south, in Guangdong province, grew sales, but costs increased.
Despite weaker volume growth, Yanjing Beer continued to dominate in Beijing and certain central and western regions. It is the only Chinese brand without a foreign partner, such as AB-InBev or SABMiller.
The planned merger of the giant global brewers would consolidate market share and raise antitrust issues that could affect brands like Snow Beer, jointly held by SABMiller and China Resources Enterprises, a state-owned company.
23 Mar. 2016