Xiaomi – Daxue Consulting – Market Research China https://daxueconsulting.com Strategic market research and consulting in China Mon, 10 Feb 2020 22:49:53 +0000 en-US hourly 1 https://wordpress.org/?v=5.4.2 https://daxueconsulting.com/wp-content/uploads/2012/06/favicon.png Xiaomi – Daxue Consulting – Market Research China https://daxueconsulting.com 32 32 The alcohol market in China is making a comeback https://daxueconsulting.com/research-on-alcoholic-drinks-in-china/ https://daxueconsulting.com/research-on-alcoholic-drinks-in-china/#respond Thu, 13 Feb 2020 20:24:00 +0000 http://daxueconsulting.com/?p=3545 In 2011 China introduced the new law for punishing drunk drivers, the growth rate of overall alcohol market in China consumption lowered. Faced with stricter drunk driving testing and more severe punishments were there to be accidents, people intentionally choose not to drink alcoholic drinks before driving. However as people adapt to the laws, and […]

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In 2011 China introduced the new law for punishing drunk drivers, the growth rate of overall alcohol market in China consumption lowered. Faced with stricter drunk driving testing and more severe punishments were there to be accidents, people intentionally choose not to drink alcoholic drinks before driving. However as people adapt to the laws, and with the rise of Didi Chuxing which makes a night out more convenient, the alcohol market in China has been making a comeback since 2012

High-end and Imported Wines in China Appearing More Frequently

Being regarded as the symbol of polite society or business elites, imported luxury wine such as Chivas Royal Salute(皇家礼炮), John Pope Hennessy(轩尼诗), Remy Martin(人头马) are gradually acquiring public acknowledgement, and we can frequently see them in business receptions or balls. Although the inflation in alcoholic drink in China was surprising 4.2% and the costs for imported alcoholic drinks in China rose greatly, it still sold well. Also these wine companies are trying to produce more varieties of products, which can well-satisfy the taste of Chinese people. French, in particular is doing well in alcohol market in China.

Enter the alcohol market in China through Strategic marketing

In the complex wine industry in China, wine producers are finding ways to win Chinese customers. Many companies use innovative strategies to focus on specific target markets.  Companies are using innovative marketing strategies to focus on specific target markets. For example, the Bonny Doon Company, which uses an unusual selection of wine varieties along with unconventional label, designs to attract new market segments including China. Innovation varies from packaging, branding and advertising.

Surging Sales of alcoholic drinks in China on the Internet

Online B2C purchasing has become more and more popular in China in recent years, and this trend remains the same specifically for the wine in China. There are more online shops and online professional websites doing business related to mid-end wines or high-end brands. Due to the relatively short development history of online wine retailing, the market of online wine purchasing still has great potential.

There are more ways to source wines in China. A British wine research corporation, Wine Intelligence, conducted a market research in March 2016 based on more than 1000 Chinese wine consumers whom were from upper middle class. According to the ‘China Wine Market Landscape Report’ Wine Intelligence published based on the market research, more than 48 million consumers from the middle class consumed wine at least twice a year. Back in 2014, it was only 38 million. Meanwhile, the research also shown 49% consumers have purchased wine online in the past 6 months upon the research conducted. JD.com and T-mall were the most popular platform to source wines compared to other e-commerce platforms, according to the book ‘the competitive strategy of China wine industry’

Domestic Companies Cooperate to Make Themselves More Important in China’s Alcohol Market

We can say without any exaggeration that fierce competition exists in every industry of China. Since the market is widely spread, competition in the alcohol drink industry is intensive and is still heating up. To increase their own market powers, some companies threw themselves in merging or acquisitions. On typical example is the merge of Beijing Dragon Seal Wine and Beijing Red Star into Capital Wine Group. By enlarging the scale of themselves in this way, they enjoy more information, more high-technology, and more capitals for production. This trend again strengthens the competition and speeds up survival of the fittest and quitting of the ones that are not good enough.

High-end domestic alcohol brand such as Mao Tai (茅台) was still leading the domestic alcohol market. The stock has been rising and reached historical high in June 2019. It reached 1163 yuan by 13 December 2019. As the lead in Chinese domestic alcohol market, the growth also promotes sales and growth of other alcohol brands in China. As of 16 December 2019, Mao Tai sales revenue reached 100.3 billion yuan.

Meanwhile in June 2019, Koya Brandy Winery has officially opened in Yantai City. The company Zhang Yu (张裕) has made the first Brandy in China back in 1896 and in the market for sale since 1914 as KOYA Brandy. Koya Brandy is the pioneer in Chinese Brandy alcohol market and expect to enter international alcohol market in the future.

Digital transformation of China’s alcohol industry

In July 2019, Huawei, ZTE and other mobile internet high-tech companies led teams to visit Luzhou Laojiao, Wuliangye, and Maotai, respectively, in digital transformation, smart wineries, cloud computing, etc. On the other hand, it has launched comprehensive cooperation with liquor companies. The development of 5G technology will further change the development of the future liquor industry. In this regard, the industry believes that the use of the new network platform and 5G technology in the communications industry will reduce the difficulty and cost of equipment access to the brewery, transform data resources into data assets, bring out the core advantages of the industry, and continue to optimize and upgrade smart brewing. Technology may be one of the effective ways to enhance the competitiveness of Chinese liquor.

A Grow in Sales of Alcoholic drink in China in 2020

Market for imported wine has been expanding and reached 65.3% by 2018, thanks to the zero tax policy for New Zealand wine in 2012 and Chile wine in 2015.

In 2018, 4.9% of wine produced in China and 10% consumed in China. According to International Wine Association, the average consumption of wine in China is only 1.6L per person while the world average is 3.3L per person, which is twice as much. In 2019, China mainland has consumed 1.79 billion liter and was ranked the fifth in the world. Therefore, there is still a significant potential for the wine market to grow in China.

Author: Fengyu Du


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Walmart in China: Market entry case study https://daxueconsulting.com/wal-mart-in-china/ https://daxueconsulting.com/wal-mart-in-china/#respond Tue, 24 Dec 2019 23:56:39 +0000 http://daxueconsulting.com/?p=3812 Overview of Walmart in China Walmart was founded in the United States by Sam Walton. It has now grown to be the largest retailer in the world with over 11,200 stores across 27 countries. Walmart entered China in 1996 with its first location in Shenzhen. The company operates three retailing formats: Supercenters, Sam’s Club and […]

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Overview of Walmart in China

Walmart was founded in the United States by Sam Walton. It has now grown to be the largest retailer in the world with over 11,200 stores across 27 countries. Walmart entered China in 1996 with its first location in Shenzhen.

The company operates three retailing formats: Supercenters, Sam’s Club and Neighborhood Markets, all of which cater to different consumers’ needs. Supercenters mainly aim at saving consumers’ time and money. Walmart is known for “Every Day Low Prices”. Sam’s Club in China is a members-only warehouse. Walmart China has a similar business model as Costco in China, which provides low-cost, bulk products for both business and personal use. Neighborhood Market is located near residential areas, for consumers’ daily shopping needs. Walmart China currently operates more than 400 stores in over 180 Chinese cities. Of these, there are 26 Sam’s Clubs in China. It is planning to open 30 to 40 new stores every year.

Sam's club in China

[Source: linkshop.com.cn Sam’s Club in China owned by Walmart]

In 2007, Walmart spent US$1 billion and acquired 35% of the parent company of Trust-Mart, a Taiwan-based hypermarket chain plan. This major investment by Walmart accelerated its expansion across Chinese regions. As of 2012, Trust-Mart had over 100 outlets across China, including many stores in lower-tier cities.

Walmart China sold its Chinese E-commerce site (Yihaodian) to JD.com in 2016. JD.com now operates on behalf of Walmart China for its online platform, which it allows Walmart a more competitive position that taps into Chinese consumer needs.

Strategies of Walmart China

Walmart maintains the same strategy in China as it does globally, which is centered around quality service and low prices. Walmart and Sam’s Club in China use advanced retailing technologies methods. While inspiring competition, it raises the level of overall service of the local retailing industry.

Local sourcing keeps prices low

Walmart China sources locally. Local products comprise about 95% of the goods that are sold in China’s Walmart locations. Additionally, it has cooperated with about 20 thousand suppliers, and directly exports about 9 billion USD worth of Chinese products annually. In 2006, Walmart China was named the enterprise with highest customer satisfaction according to a survey held by an authority in Shanghai.

Sustainable development lowers operation costs

Sustainable development is another important strategy of Walmart China. It opened its first environmentally-friendly flagship store in Beijing in 2018 with 40% less energy usage. The store incorporated efficient cold chain system, energy saving light bulbs, and longer lifespan long-term assets etc.

Walmart began developing its online retailing services in China in 2012. Since Walmart’s Chinese stores are mainly distributed in first and second tier cities, great market potential hence lies in third tier cities and smaller cities through online retail. The development of an online purchasing system greatly increased Walmart’s awareness and popularity.

Walmart China's APP

[Source: wal-martchina.com Walmart introduced its official App to encourage consumers to purchase via their App]

Walmart: secret to success

Walmart three core company principles are: Respect individuals; serve the customers; chase for excellence.

Walmart also has ten rules of operation for its employees: control the cost; make good plans to share the profits; inspire your co-workers; learn from anybody possible; thank your colleagues for their contribution to the firm; allow for failures; listen to the advice of everyone in the company; do better than what customers had expected and they will come again; make administration costs lower than your competitors; do not follow the tradition.

[Source: Nipic, Walmart super center in China]

New moves by Walmart in China

Recently, Walmart announced its plan to open 500 new stores and warehouses in China over the next five to seven years. This movement by the company is considered to be one of its biggest footprint in China despite that the overall Chinese economy is cooling. Although that Chinese GDP growth dropped to its lowest level in nearly three decades last quarter due to trade was with the United States, the sales of Walmart in China grew by 6.3%. Notably, its growth in the Chinese market doubled more than its worldwide growth of 2.5%.

Besides, Walmart announced that it is going to invest approximately 1 billion dollars in its Chinese region to compete with local rivals and other online retailers. James Ku, senior vice president of Walmart China mentions that the company seeks to deliver freshness, value and convenience to its customer by leveraging multiple format strategies, in which remodeling of stores, and improving store features such as self-checkout machines incorporating facial recognition, as well as online platform stores will be the key to the success of the company’s expansion project. Cooperating with JD.com will also allow Walmart the chance to gain deeper Chinese consumer insights.

Facial recognition technology at a Chinese Walmart

[Source: asia.nikkei.com Facial recognition check-out machines adopted by other retail chains]

Reaching low tier consumers

Walmart China is also planning to put more weight on its neighborhood stores and to increase the sales area of fresh groceries. Walmart will continue to expand especially in the second- and third-tier cities, with a plan to open 40-50 new outlets a year focusing on third-tier cities.

Overall, the future of Walmart China seems to be fairly optimistic as the company continues to experience revenue growth. However, the future growth will depend largely upon its expansion of local brick-mortar-stores, improvement of online platforms and relative digitized features.

Daxue Consultant China

Sources:

 

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Beauty and Personal Care in South China https://daxueconsulting.com/beauty-and-personal-care-in-south-china/ https://daxueconsulting.com/beauty-and-personal-care-in-south-china/#respond Wed, 23 Apr 2014 07:48:45 +0000 http://daxueconsulting.com/?p=4198 Trends and potential for personal care in South China The last a few years experienced a substantial growth in value sales for beauty and personal care products in China, and especially in the South of the country. According to consulting firms, the main driving force was the vigorous development of the economy as a whole. […]

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Trends and potential for personal care in South China

The last a few years experienced a substantial growth in value sales for beauty and personal care products in China, and especially in the South of the country. According to consulting firms, the main driving force was the vigorous development of the economy as a whole. With more disposable income, consumers can buy more products beside primary needs. An important fact about consumers in South China is that, they have been developing brand awareness, and they are having more sophisticated demands. Market players in this industry responded to this trend by subdividing their products to satisfy the need of different consumer groups.

Despite the fact that skin care is a fairly mature product category, it still saw big development in south China. In particular, anti-agers show good performance. Although the main consumers are females aged over 30, there are more and more young females who are paying attention to their beauty and begin to use anti-agers early. Another important trend is the appearance of sets. At special time spots like Christmas and the New Year, some famous brands like Estée Lauder, Clinique and Dior launched special sales where products are sold in the forms of sets. In addition, male consumers are no longer concerning their basic needs such as shaving, bathing and shower products. They are buying oil control products and deodorants. With an average relatively high education level, male consumers are highly brand sensitive.

Also, consumers are being more and more aware of cross infection prevention. Thus liquid soaps acquired huge increase in sales volume, with brands like Blue Moon, Kaimi, Walch and Dettol having greatly increased their sales in south China.

Prospects of South China

The consumer need in south China has been becoming more and more sophisticated. Thus market players are trying to divide the market at large, and they have been developing new multifunctional products to cater to people’s needs. Consumers’ concern for product safety has been a driving force for producers to use more organic or ‘green’ ingredients instead of chemical ingredients. The brands that had already used some organic materials benefit a lot, like Shanghai Jahwa United’s Herborist skin care.

Large department stores, supermarkets and hypermarkets have remained the major retailing channels for years, and it has been predicted that this trend will continue into the following a few years. Since south China is a relatively more developed region than inland, Internet retailing has much market potential. Many key marker players, having realized the importance of this channel, have established their online shops using B2C websites such as Tmall and 360buy, or their own official websites.

Amy Wang

China cosmetic market report

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Market of Baby products in China https://daxueconsulting.com/market-of-baby-products-in-china/ https://daxueconsulting.com/market-of-baby-products-in-china/#respond Tue, 22 Apr 2014 07:48:40 +0000 http://daxueconsulting.com/?p=4239 The growing trend of Market of Baby Products in China There are more than 3 million B2C maternal and baby supplies purchasers in China. This is about 3% of all B2C purchasers in the Middle Kingdom. Compared with the whole market, this consumer population is more specialized and smaller in scale. However, their average consumption […]

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The growing trend of Market of Baby Products in China

B2C Maternal and Baby Supplies Purchasers in China

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There are more than 3 million B2C maternal and baby supplies purchasers in China. This is about 3% of all B2C purchasers in the Middle Kingdom. Compared with the whole market, this consumer population is more specialized and smaller in scale. However, their average consumption value is considerable, which makes this market highly potential. The market demand is relatively stable, thus the growth in the number of consumers is smaller than that in other goods categories.

The average annual consumption of B2C maternal and baby supplies purchasers is 1,328 yuan. 32.2% of them spend less than 300 yuan, and 18.6% spend between 301 to 500 yuan. Those who spend 501 to 1,000 yuan make up 25.4% of all B2C maternal and baby supplies purchasers and those who spend between 1,001 and 3,000 yuan make up 15.3%. The remaining 8.5% spend more than 3,000 yuan per year.

Consumption patterns in Baby products market

The famous websites that B2C maternal and baby supplies purchasers visit are Tmall, Redbaby, 360buy, Dangdang, and Lijiababy. Tmall occupies 22.6% of the market, followed by Redbaby, with market occupancy rate of 4.3%. 360buy follows with 2.2%. Dangdang has 1.1%, and Lijiababy has 0.5%.

Redbaby leads in the average value of consumption per person. A consumer on average spends 3,600 yuan on Redbaby annually. 360buy follows with 1,850 yuan. Then is Lijiababy, with an average consumption value of 1,000. Tmall has 897, and Dangdang has 875.

The consumption of maternal and baby supplies is highly concentrated. 99.5% of all consumers choose to buy from a single website, and only 0.5% choose to buy from two or more websites.

55.9% of B2C maternal and baby supplies purchasers have bought clothing from B2C websites. 32.2% have bought books and audio-radio products. 25.4% have bought cosmetics. Other products that B2C maternal and baby supplies purchasers buy include food, virtual cards, household electrical appliances, groceries, jewelry, and ticket booking services.

Naturally, female compose a greater part of B2C maternal and baby supplies purchasers than males. 62.7% B2C maternal and baby supplies purchasers in China are females, which is higher than the 45.5% that females make up in the total B2C purchaser population.

Amy Wang, Consultant China

See also : China Daily

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Guerlain in China https://daxueconsulting.com/guerlain-in-china/ https://daxueconsulting.com/guerlain-in-china/#respond Fri, 08 Nov 2013 01:59:28 +0000 http://daxueconsulting.com/?p=4031 Guerlain is a French brand belonging to Moët Hennessy – Louis Vuitton, LVMH Group set up in year 1828. Its main products are perfume, cosmetics and personal care products. According to the statistics from year 2009, it had 77,302 employees and had an annual turnover of 17,053 million euros. In year 1828, the doctor and […]

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Guerlain is a French brand belonging to Moët Hennessy – Louis Vuitton, LVMH Group set up in year 1828. Its main products are perfume, cosmetics and personal care products. According to the statistics from year 2009, it had 77,302 employees and had an annual turnover of 17,053 million euros.

In year 1828, the doctor and the pharmaceutist, Pierre Francois Pascal Guerlain, opened his first perfume shop in Paris. In 1830, he tried make the perfume ‘individualized’. A special aroma might be designed for a certain lady, or a certain occasion. Guerlain continued this method, and developed a series of prescriptions, which made the brand competitive in the field of daily skin care products and cosmetics.

In 1939, the brand Guerlain opened its first beauty and skin care salon in 68th, Avenue des Champs Elysees, which later become the place representing the fashion circle of France.

Guerlain has ten star products, which are: Baume de la Ferté, Aqua Allegoria, Success Future, Insolence, KISSKISS, Météorites, Orchidée Impériale, Parure, White, and Aquasérum, which later developed into Super Aqua-Sérum.

In year 2008, Guerlain reached an agreement with Sephora. Its legendary product, TERRACOTTA, which is sold in the world with an average speed of 20 seconds a bottle, has come into China market, and would be sold exclusively in Sephora. This cooperation of the world’s first tier cosmetics brand and the world’s first class cosmetics retailer has received huge success.

In year 2011, Cuerlain invited Michelle Yeoh(杨紫琼), the famous Malaysian actress and film producer, to be its spokeswoman. Michelle says that,’ I have always been pursing perfection all my life, and been attracted by those people who continually make progress in quality. For me, Guerlain means all this. It is my honor to cooperate with this legendary brand, because, for me, it is so happy to learn French culture and the culture of Guerlain, and display all these to my compatriots. ‘Michelle is influential in Asia, and is now a new tie of Guerlain and Asian countries.

Ever since the beginning, Guerlain fastened its pace in opening special counters in big department stores in China’s second tier cities. In June, 2011, it had its third special counter in Changsha(长沙), and also had a new counter in Tianjin(天津). Later in September, it came into Harbin(哈尔滨) with special discounts to attract customers. In June, 2012, it had a new counter in  Hefei(合肥), and 2 more in Huhhot(呼和浩特) and Wenzhou(温州).

Edited by Amy Wang from Daxue Consultant China (follow us on Twitter and Linkedin)

Credit Photo: 39world

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Yantai Changyu Pioneer Wine in China https://daxueconsulting.com/yantai-changyu-pioneer-wine-in-china/ https://daxueconsulting.com/yantai-changyu-pioneer-wine-in-china/#respond Wed, 06 Nov 2013 01:12:15 +0000 http://daxueconsulting.com/?p=4075 Founded by the patriotic overseas Chinese, Mr. Zhang Bishi(张弼士) in year 1892, Yantai Changyu Group is now the biggest wine producer not only in China but also in Asia. It is now big company with over 4,000 employees and total asset of 2,290 million yuan. Its main products include wine, brandy, champaign, healthcare wines, distilled […]

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Founded by the patriotic overseas Chinese, Mr. Zhang Bishi(张弼士) in year 1892, Yantai Changyu Group is now the biggest wine producer not only in China but also in Asia. It is now big company with over 4,000 employees and total asset of 2,290 million yuan. Its main products include wine, brandy, champaign, healthcare wines, distilled wines and purified water. Its annual production capacity is about 80,000 tons, and its products received universal welcome in over 20 countries and districts like Malaysia, America, the Netherlands, South Korea, Thai, Singapore and Hong Kong. Changyu wine received high praise from a lot of celebrities. Dr. Sun Yat-sen visited the company in year 1912 and gave it high comment.

Market strategy

Although the market has great potential in consuming wines, due to the lifestyles and disposable income of most people, there are still not many wine consumers, and people generally lack the knowledge of wines, not to mention appreciation. Thus, Changyu regarded the spread of knowledge as exploring the market. In culture distributing, Changyu has natural advantage. Being the eldest wine producing enterprise in China, it not only created its brand culture in its over 110 years of history, but also accumulated rich treasure for China’s wine culture. In 1992, Changyu built its wine culture museum, which attracts many visitors every year.

In 2002, Changyu cooperated with Carst Group to build Changyu-Carst Chateau, the first 3S international chateau in China. Here people can witness the production process of high end wine, go tourism, and have leisure entertainment.

Current State

Since November, 2009, Changyu wines have appeared in China’s state banquets, where French wines like Bordeaux and Bourgogne were the dominating wines. It is now apparently another symbol of China’s nation image.

Also, Changyu is now receiving welcome from western countries. Waitrose, the official beverage supplier for the British royal family, for the first time, sells Changyu Cabernet in its high end chain supermarkets. And the sales volume was amazing—over 400 boxes a week. This achievement, according to industry insiders, marks the fact that Chinese wines are winning the recognition of the professional and mainstream consumers in England.

Also, Changyu is now sold in over 3,000 supermarkets in Europe, and it has successfully entered European mail order system. What’s more, in Europe’s five star luxury hotels and in the the first-class cabin of Lufthansa, Changyu can be seen.

Edited for Daxue Consultant China (Market Study China and on Twitter China Mystery Shopping)

Sources:

Credit Photo: Runsky Chinadaily

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Retail for Babyfood in China https://daxueconsulting.com/retail-for-babyfood-in-china/ https://daxueconsulting.com/retail-for-babyfood-in-china/#respond Tue, 05 Nov 2013 01:11:12 +0000 http://daxueconsulting.com/?p=4126 Current State Babyfood, mainly food for the weaning period, has the fastest development among the many sectors of baby supplies. Currently, the annual market volume is about 600 thousand tons, and is still increasing. Take the market for milk powder as an example. Although babies only account for 16.5% of all milk powder consuming population, […]

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Current State

Babyfood, mainly food for the weaning period, has the fastest development among the many sectors of baby supplies. Currently, the annual market volume is about 600 thousand tons, and is still increasing. Take the market for milk powder as an example. Although babies only account for 16.5% of all milk powder consuming population, their consumption quantity is much greater than that of others. According to a survey, 5.9% of babies have 1 bag of milk power every month, 29.4% of babies have 2 to 4 bags every month, and 17.6% have 3 to 5 bags. As parents’ concern of food safety and nutrition increase, babyfood market is where future competition exists.

Since there are not many service agencies in babyfood market, chain store is a suitable mode for future development for babyfood retailing. Now retail for babyfood in China is under reforming. Online B2B and B2C selling channels have also developed. The Internet has given new opportunities to sellers.

According to statistics from the Bureau of Statistics of China, in year 2004, the retailing volume of babyfood in China was 51,970 million yuan, which was 51.07% greater than that of year 1998. Official statistics say that there are 20 to 30 million newborn babies every year, and the monthly consumption of a baby aged between 0 and 3 is 900 yuan. Thus this this market has huge potential.

Industry Characteristics

In China, the retailing for babyfood has a few significant characteristics. There is great quantity of babyfood advertisements and propagandas. And, consumers are more and more accepting high end products, which stimulate producers to issue new and better products, and fasten the pace that unqualified producers be sifted out.

Due to the tainted milk powder accidents, people’s confidence in safety of babyfood is diminishing. 90.1% of them expressed worry about the quality of babyfood. China has been behind in having its own brands, and high end babyfood market has been a monopoly of foreign brands like Mead Johnson(美赞臣), Nestle(雀巢), Dumex(多美滋), Wyeth(惠氏), Anmun(安满), and Friso Care(美素佳儿). Domestic brands like Yili(伊利) and Shengyuan(圣元) have together only 19.5% of the market. Currently, foreign brands almost occupied the market for first tier cities, and domestic enterprises are aiming at developing in second and third cities.

Retail Channels

In China, babyfood can be bought through these channels: hospitals, drugstores, supermarkets, and exclusive stores which sell baby supplies. Among these, the supermarket channel takes a big proportion, greater than 40%. However, the exclusive stores are developing at a very fast pace.

Edited by Amy Wang from Daxue Consultant China (on Twitter on Market Study China and Twitter Focus Group China)

Sources:

Credit Photo: Nipic

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Retail of Wine in China https://daxueconsulting.com/retail-of-wine-in-china/ https://daxueconsulting.com/retail-of-wine-in-china/#respond Mon, 04 Nov 2013 02:01:09 +0000 http://daxueconsulting.com/?p=4123 According to a popular industry report, the scale of retail of wine in China is about 60 billion to 70 billion yuan. In 2013, it is expected to exceed 90 billion yuan, and an optimistic estimate says that it may reach 200 billion yuan in five years. The number of potential consumers who can afford […]

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According to a popular industry report, the scale of retail of wine in China is about 60 billion to 70 billion yuan. In 2013, it is expected to exceed 90 billion yuan, and an optimistic estimate says that it may reach 200 billion yuan in five years. The number of potential consumers who can afford to buy wines is larger than 200 million. However, the industry insiders had never been so optimistic. There is still no retailer that has nationwide influence, but there do not lack cases of failure.

From the perspective of consumer behavior, wine is still being introduced into China, and its market is far from being mature. Most consumers do not have much relevant professional knowledge, and have to rely on the professional to make choices. Thus, the likelihood that a consumer goes into a shop and makes a purchase on his own is remote. However, a few wine agencies like Everwines(桃乐丝), Aussino(富隆酒业) and Ruby Red(红樽坊)  have started their business in pure retailing instead of making the shop like an exhibition hall.

Also, professional wine retailers have also noticed the development chances in China. Take Enoteca, the Japanese professional wine retailer which was founded in year 1988, and Watsons Wine Cellar as examples. They both have ample experience in wine retailing in Asia, and they both opened their first shop in mainland China in Shanghai(上海) in year 2010.

Domestic wine retailers also have much influence in China’s second and third tier cities. Jiujiajiu(久加久酒博汇) in Zhejiang, for example, has 23 outlets in Hangzhou(杭州), which reflects its ability to permeate into the market.

Naturally as a type of fast moving consumer goods, wines have been frequently seen in chain stores and supermarkets. City’Super, Carrefour and Wal-Mart have all had wine selling sectors. Marks&Spencer have opened several shops in mainland China successively, which aims at having a share in low end wine market. Thus, wine agencies, wine retailers, and supermarkets compose three physical channels of wine retailing in China.

Wien agencies, typical representatives of which are Everwines(桃乐丝), Just Grapes(葡醉), Aussino(富隆酒业) and Ruby Red(红樽坊), are mainly located in first tier cities. They function like flagship stores. They have propagandas, and display the brand images. Some of them offer seats and snacks to attract people.

Wine retailers, whose representatives are Enoteca, Watson’s wine cellar, and Jiujiajiu, are mainly located in first and second tier cities. There are often professionals to offer advices. Also, they are mostly located in downtown, and display an atmosphere of professionality. Products are mostly higher and middle class.

Supermarkets like City’Super and Carrefour spread in cities of all levels. Wines are placed in a special zone, and open to customer selection. Products are mostly middle and lower class, and there are occasionally sales.

Which one of these three will take the lead? Or will they grow into a balanced situation? Will physical shops be threatened by online retailing of wines? Wait to see.

Edited for Daxue Consultant China (Twitter about China Market Research & Linkedin about China Research)

Sources:

  • Zhongguo wine
  • Wine online
  • Wine Searcher
  • FT

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Zhejiang Guyue Longshan Shaoxing Wine in China https://daxueconsulting.com/zhejiang-guyue-longshan-shaoxing-wine-in-china/ https://daxueconsulting.com/zhejiang-guyue-longshan-shaoxing-wine-in-china/#respond Tue, 22 Oct 2013 03:40:55 +0000 http://daxueconsulting.com/?p=3845 Zhejiang Guyue Longshan Shaoxing Wine Co Ltd (GYLS) is China’s biggest rice wine producer and exporter, and it is also the leader in rice wine marketing industry. It has the first class rice wine production techniques and equipment, and the only provincial level rice wine technology center. Up to year 2010, it has in total […]

This article Zhejiang Guyue Longshan Shaoxing Wine in China is the first one to appear on Daxue Consulting - Market Research China.

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Zhejiang Guyue Longshan Shaoxing Wine Co Ltd (GYLS) is China’s biggest rice wine producer and exporter, and it is also the leader in rice wine marketing industry. It has the first class rice wine production techniques and equipment, and the only provincial level rice wine technology center. Up to year 2010, it has in total 1,864 employees, and the total production is now about 140,000 tonnes per year. According to relevant statistics, its net sales value in year 2010 was 1,079.2 million yuan, and its net profit was 158.7 million yuan.

The Zhejiang Guyue Longshan Shaoxing Wine Co Ltd (GYLS) was listed in Shanghai Stock Exchange on May 16th, 1997. The main brands it has are: Guyue Longshan(古越龙山), Shen Yonghe(沈永和), Zhuangyuan Red(状元红), Jianhu(鉴湖) , Nv’er Red(女儿红) and Guxiandao(古纤道). All of these have received many prizes both in the world and in China.

Guyue Longshan is the only rice wine that has won the honors of China Well-Known Trademark, China Top Brand, and Rice Wine for the State Banquet. Shenyonghe and Jianhu are both famous trademarks of Zhejiang Province. Also, it has the reputation of ‘crown of famous Oriental wine’. All products of GYLS are welcomed in big cities in China, and over 30 foreign countries like Japan, Singapore, Vietnam, and those in the west.

GYLS had an overall volume share in non-grape wine of 6% in year 2011, and made it the top. There are two major facts that contribute to its success. One is its close attention to building up and maintaining a brand image. And another is its quality control. It uses the best material for making wines, and all wines are made in Shaoxing(绍兴) except those produced in Macau(澳门) to specially cater to the needs of people there.

With its national marketing and company expansion, Guyue Longshan’s shares rose in 2011. It pays a lot of attention to propaganda. It pays CCTV, China’s central television, the most prevalent and influential TV station in China, to have its advertisements displayed. Also, just like Qingdao(青岛) Beer and Harbin(哈尔滨) Beer who hold annual beer festivals to increase their popularity, it also holds the Shaoxing Rice Wine Festival to increase its fame. Also, it had its products displayed in Shanghai(上海) EXPO. Despite the fact that it has well catered to the local people’s needs, it is now going to the national market where people’s needs are different, so it is now developing light tasted rice wines.

古越龙山官网

古越龙山财经

Edited by Amy Wang from Daxue Consultant China

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Market Research on Aupres in China https://daxueconsulting.com/market-research-on-aupres-in-china/ https://daxueconsulting.com/market-research-on-aupres-in-china/#comments Fri, 11 Oct 2013 08:18:53 +0000 http://daxueconsulting.com/?p=4026 Aupres is a brand designed for Chinese consumers in December, year 1991. It belongs to a jointly owned company SLC, owned by Shiseido and Beijing Liyuan(北京丽源) Company. It introduces the advanced management methods and technologies of Shiseido, and receives wide welcome from young people in China. During recent years, many brands are competing fiercely in […]

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Aupres is a brand designed for Chinese consumers in December, year 1991. It belongs to a jointly owned company SLC, owned by Shiseido and Beijing Liyuan(北京丽源) Company. It introduces the advanced management methods and technologies of Shiseido, and receives wide welcome from young people in China.

During recent years, many brands are competing fiercely in China’s cosmetics market. However, Aupres received consumer recognition with its good quality, considerate service and bright brand image ever since it came to the market. Its annual turnover has been growing at a speed of 30% per year, and consumers can buy products from special counters in over 700 big department stores all over China.

 

Current Products

Currently, Aupres’ products include: Balancing, Trans-White, Suncare, DX, Tternal Total Recharge Cream, Radiant Beauty Creamy Foundation and Cle de Peau BEAUTE. In 2006, it launched its high end product series: Supreme Aupres, and raised its brand image to the high end market. This series has its exclusive special counter colored in black and purple. In addition, noticing that men are increasingly aware of their personal care, it also launched personal care and beauty products for males.

In 2008, Aupres renewed its brand image, both in products and in services. It classified the consumers’ needs, and developed different products to cater to the different types of skins.

In year 2010, SCL reached an agreement with Van’s Department Store in Sofitel in Wanda, Beijing(北京), and began strategic cooperation. Van’s is a fast developing chained department store. With this cooperation, Aupres, following Shiseido and Elizabeth Arden, will be sold in Van’s all stores.

 

Market Campaign

Currently, SLC’s headquarters is in Beijing(北京), and has 21 subsidiaries all over China to take charge of its business. As one of China’s mainstream cosmetics brand, SLC has become the bestselling subsidiary of Shiseido outside Japan.

Aupres has invited many famous Chinese stars to be its spokesmen and spokeswomen. Chen Kun(陈坤), Sun Li(孙俪) and Bai Bing(白冰) are now all speaking for it.

Edited for Daxue Market Research China

Credit Photo: Nipic

Sources:

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