Baijiu market poses 'big opportunity' for premium spirits

06 June, 2018

Data and analytics company Globaldata, says there is a big opportunity for mid-range western brands to penetrate China’s giant baijiu market.

China’s growing luxury consumer base among the urban population, was the world’s largest alcoholic drinks market by both volume and value in 2016; around twice the size of its nearest rival, the US.

Amy Walker, consumer research leader at Globaldata, said: "Retail sales of speciality spirits (including baijiu) in China are well into the hundreds of billions of US dollars. A significant market penetration opportunity would be for mid-range international brands to challenge the local spirit baijiu and this will not be an easy displacement.” 

According to Globaldata, there is plenty of evidence for potential. Chinese New Year drove Pernod Ricard’s revenue by 9.3% on an organic basis in the quarter to March 2018, primarily due to growth in sales of Martell cognac. 

The company will now limit Martell shipments to China later this year to ensure sustained growth globally for the brand. Pernod Ricard joined Remy Martin and Hennessey in reporting strong cognac sales in China. 

Walker added: “All this luxury international spirit growth speaks of the tail end of the anti-corruption drive, which brought down such sales earlier this decade. 

“A focus on fast growth can exaggerate the reality – which is that the majority of the Chinese spirits market is still dominated by baijiu."

Globaldata claims there is also a growing thirst for luxury whiskey. One particular demographic driving luxury whiskey in China is young, high net worth individuals. 

They are buying for themselves and for gifts, and a significant minority are happy to spend upwards of $100 on a single bottle.

Keywords: baijiu, GlobalData

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