In recent years, the Chinese spirits market has been booming. The growth of this industry can be attributed to a number of factors, including rising income levels and the growing popularity of Western spirits among Chinese consumers. As more and more consumers in China are looking for high-quality imported spirits brands, international spirits producers are taking notice and expanding their presence in the country.
This is good news for Chinese consumers, who now have a wider range of premium vodkas and imported spirits to choose from. In addition, the increasing competition among spirits producers is helping to drive down prices, making vodka more accessible to a wider range of Chinese consumers. So what’s behind the success of the vodka market in China? Let’s take a closer look at some of the key drivers.
Chinese alcohol market landscape
The Chinese alcohol industry is a massive market that is seeing rapid growth. There are many different types of alcohol available in China, and the industry is increasingly competitive. Imported spirits and other alcoholic beverages from foreign brands are gaining popularity, as they are often perceived as ‘fancy’ and pricey. Chinese people like to give alcohol as a gift or treat it as something to ‘show off’ to gain Mianzi. Therefore, almost all markets, from the wine market, brandy market, and western spirits, beer, to scotch whiskey and other spirits are very profitable markets that many brands try to seize from themselves.
According to Statista, in 2022 the spirits market in China accounted for 253.10 million dollars and the market size is expected to grow 4.64% every year. In comparison, the Chinese baijiu market is seeing a significant decrease, mostly due to the bad reputation that Chinese baijiu (traditional Chinese vodka) has been getting in recent years. Although it’s still said to be one of the most consumed spirits in the world, it’s gradually making room for western spirits.
When it comes to other alcoholic drinks, the alcohol markets’ revenue accounted for almost 320 million dollars in 2022 and it’s expected to grow 5.40% every year. This revenue is the biggest in the world and the biggest segment is the spirits market. What is very important to mention when it comes to market trends for foreign spirits brands to watch out for is the size of total revenue generated through online sales, which went up to 25% in 2022. The average volume per person in 2022 in the alcoholic drinks market is almost 42l.
As you can see on the chart above, all alcoholic drinks will see significant growth in the upcoming years, but the most profitable are definitely spirits and beer. Therefore, it’s a big opportunity to enter the imported spirits market in China as soon as possible.
Status Quo of the Chinese spirits market
Although whiskey is the most popular alcoholic beverage imported into China, with whiskey sales volume growing every year, vodka has great potential. China is not a traditional consumer of vodka. Vodka sales are still far behind those of Chinese Baijiu. But a new generation of consumers (the 80’s and 90’s generation) is emerging. The Chinese are increasingly fond of the western lifestyle and consumer habits are evolving quite fast, resulting in a bigger interest in imported spirits.
Nowadays, due to online sales channels and better foreign brand recognition, many high-income consumers from the ’80s and ’90s generation turn to foreign liquors and imported spirits when they want to have a drink or give someone a gift. Night clubs selling foreign alcoholic beverages, especially in first-tier cities are also gaining popularity among many Chinese consumers. As a result, vodka is getting its moment and the Chinese spirit market is growing at a fast pace, along with the import volume of foreign spirits brands.
Market share of world famous brands of vodka
.When it comes to the vodka market in China, Absolut vodka is definitely the key player, with more than half of the market based on consumption volume. The second place belongs to SKYY Vodka, with 20.6% of the spirits market share. Together with Smirnoff, Stolichnaya, Eristoff, and Grey Goose, those brands take up nearly 90% of the whole consumption level in China.
As you can see, to succeed in this concentrated market, one of the key things you will need to work on first is branding, because whoever you might ask in China, this person will probably know all of these key players. Let’s take a look at some of these spirits brands’ presence in China.
Absolut Vodka’s successful branding story
With more than 50% of the whole consumption volume in China, the Absolut Swedish vodka brand from Pernod Ricard China has seen marvelous success in the Chinese spirits market. This is probably the first brand Chinese spirits consumers think of when it comes to drinking spirits.
Many luxury brands launched limited editions exclusively for the Chinese market, and Absolut is also one of them, which contributed to the great success of the company’s branding in the Chinese spirits market. In 2010 Absolut launched its first limited edition bottle exclusively for the China market. This new bottle, called Absolut 72, was designed by Gao Yu, a young Chinese pop art artist.
The bottle is inspired by a Chinese legend called “The Monkey King and its 72 transformations.” The Monkey King, a character from Journey to the West, one of the most-known books of all time in China, is one of the main pop-culture figures popular among all Chinese people. Sun Wukong (The Monkey King) has the power to undergo 72 transformations, hence the bottle’s name.
On the 6th of August 2010, Absolut Vodka launched an integrated campaign for Absolut 72 in China resulting in the selling of 350 000 bottles of Absolut 72 bian (transformation).
The digital campaign, developed by TBWA China was activated via Absolut.cn website. The prints for this campaign required the participation of a famous Chinese photographer called Chen Man. His work is known to be bold and it fits perfectly with the image of Absolut global communication made by TBWA.
Smirnoff – the UK representant on the Chinese spirit market
The star Vodka of the British group Diageo has enjoyed stable growth in China. In 2010, the vodka producer has acquired a majority stake in Sichuan Chengdu Quanxing Group which owns 39.7% of the Chinese baijiu brand Shui Jing Fang – the oldest manufacturer of baijiu on the market in China. Chinese baijiu represents 96% of all spirits market sales in China. The goal was to use this baijiu company as a springboard to increase the visibility of the Smirnoff brand.
Diageo has also teamed up with Shui Jing Fang to produce premium vodka in the city of Chengdu in southwest China using a combination of Russian and Chinese techniques to interest Chinese consumers and boost spirits sales. Paying tribute to the golden age of China during the 1930s, the vodka was named “Shanghai White.”
Shanghai White is produced in the distillery of Shui Jing Fang company in Chengdu. It is distilled four times over a period of six months before being bottled and sold at a retail price of $60.
Although the launch of Shanghai White was described as global, so far this vodka is only available in a few places in Hong Kong, Beijing, and Shanghai, but the demand is growing.
Smirnoff is sold primarily in the best night clubs and bars in major Chinese cities like Shanghai, Guangzhou, and Beijing, where the demand for western spirits is higher than in smaller cities. Smirnoff is mostly sold in the best expatriate bars and clubs in major Chinese cities like Shanghai, Guangzhou, and Beijing. Its positioning is clearly of a brand for clubbing as you can see with events like the “vodka experience shanghai” launched in 2005.
The rise of upscale brands of vodka in China
New brands of high-end vodka seized the specificities of many consumers in China. To understand the potential of the spirits market, it would be best to spend one party night with Chinese people to see how they treat this alcoholic beverage, especially young people. In China, vodka is drunk in mixed groups and served with different color blends and new flavors to bring light to the table and ‘give a face’ to people around.
When it comes to the promotion of alcoholic beverages, especially imported spirits in China, promoting them by highlighting the quality or talking only about their origin won’t win you the market. Chinese consumers often buy vodka to show off in front of their friends, especially if its’ a well-known foreign spirits brand that is expensive in the Chinese spirits market. The best practice to attract Chinese consumers, especially young consumers scrolling e-commerce platforms is to promote the luxury and purity of your product.
Let’s take a look at some of the upscale vodka brands starting to grow on the market in China:
F Vodka: The Vodka made by Fashion TV wants to Conquer the Chinese Market
With its title “The elixir of Fashion”, F Vodka positions itself as a luxury brand for high-end consumers. With a very luxurious-looking bottle, with words such as ‘imported’ or ‘luxury collection’, the Polish vodka brand is targeting fashionistas, stylists, influencers, and all young consumers fond of western spirits, that prefer alcohol from other countries rather than Chinese baijiu.
Launched in 2010 by Michel Adam, President of the Fashion TV station, F vodka is conquering the spirits market in China on multiple sales channels.
Since 2011 F vodka was distributed in the Dragon-i bar in Hong Kong. But this year fashion TV bars and clubs are to be opened in other major Chinese cities. Nowadays F vodka sells in expatriates bars and clubs like Mint or Bar Rouge in Shanghai, which are among the most popular nightclubs in the country. Although the import volume is not nearly as impressive as the key players’ one, F Vodka already has its fans and among party enthusiasts in Chinese big cities.
The event in True Color Club, Guangzhou
Ice Fox Vodka fighting for upper-class Chinese consumers
Ice Fox Vodka quickly ranked among the top-end vodkas in China. The design of the bottle helped Ice Fox Vodka to stand out from the competition. Unlike F Vodka, which keeps a strict “jet set” communication, Ice Fox Vodka’s communication is way more subtle.
Since vodka is gaining more popularity on the spirits market in China, many western spirits brands are trying to win the Chinese young consumers from the upper class. As they follow e-commerce platforms and search for inspiration from outside of China, they tend to turn to western lifestyle patterns.
Nowadays, Chinese consumers are gaining more knowledge and interest in vodka and other spirits’ tastes and aromatic notes (whiskey and brandy market are also having momentum in China), Ice Fox Vodka fills the need for premium vodka in the Chinese market.
How to sell vodka to Chinese consumers?
The most important thing to take into consideration while entering the Chinese spirits market is that more than 55% of alcohol sales are generated online. With the wide selection of e-commerce platforms available in China, consumers prefer to search for spirits, especially imported ones, online rather than in alcohol stores with fewer available options to select from. There they can check the opinions about a new whiskey they saw on Tmall or see which local spirit is their favorite influencer promoting.
Therefore, focusing on your online marketing strategy is the key to success in the Chinese market. Especially now, since Chinese people still can’t travel and bring back alcohol from their trips, they turn to online marketplaces rather than alcohol stores to buy imported spirits in China.
There are several things to consider if you want your vodka brand to be successful in China:
Branding is the way to go, especially for premium vodkas
As you could see especially in the example of Absolut and Smirnoff, excellent branding brought both of these companies success. After reading this article you probably got the idea why Chinese people prefer to buy foreign vodka brands rather than Chinese ones; they help them show off, and show their status to their friends. Therefore, you need to do everything you can to make your name known in China. Do a competition analysis, and check what companies do to stand out. And after that you can start by;
Baidu SEO and a Chinese Website
Baidu is the equivalent of Google, it’s the biggest search engine in China, with a market share of over 70%. It means, that if someone is looking for specific alcohol or wants to check a foreign company, they will type the brand’s name on the Baidu search page. Because of that, it’s very important to have a Chinese website in the Chinese language that has a well-done SEO strategy for Baidu.
If a Chinese person will be willing to check your brand and will find your Chinese website positioned especially for them, you can be sure that they will stay on that website and get interested in your content and products.
PR and e-Reputation
Chinese website is also a great help with it comes to branding and China public relations. E-reputation is especially important when it comes to spirits, as there were already quite a few scandals including local brands. Chinese people rely on recommendations and opinions, so you need to make sure that all the comments about your brand on Baidu, Chinese marketplaces or social media e-commerce platforms are positive.
Keeping a good image of your brand is not easy, especially because of the number of platforms and marketplaces that Chinese people use on daily basis. Don’t hesitate to hire a marketing agency that will help you gain and maintain good e-reputation in China.
Social media visibility
Although having a website in China is crucial, nothing will gain you visibility and brand awareness as well as social media platforms in China. WeChat, the most popular app in the Middle Kingdom, has 1.26 billion active monthly users, which is basically the whole Internet population of China. Therefore, your presence on this platform can’t be omitted.
WeChat offers a lot of features for any business to gain customers’ trust and boost sales. If you want to sell in China, one of the most important things to do is to start a WeChat Official Account of your brand. With a public account, that works like a website within the platform, you will be able to send weekly newsletters to your customers and inform them about all special deals, new products, and so on. You can check the big players on the market, like Pernod Ricard China (selling Absolut), and how they manage their official accounts for reference.
WeChat also allows brands to set their own stores within the platform in so-called mini-programs, which are little apps inside WeChat. WeChat stores are extremely popular and more than 95% of e-commerce brands already have a store on WeChat. It’s also a very cost-effective way to sell goods in China, as it’s way cheaper than entering big marketplaces like Tmall Global, JD, or Kaola.
Apart from WeChat, there are other platforms that are useful for gaining visibility for your business. Don’t hesitate to open an official page on Weibo, which is the equivalent of Facebook, or on Little Red Book (the equivalent of Instagram and Pinterest). Those are the platforms that Chinese internet users scroll every day, looking for recommendations and inspiration.
Make use of Chinese influencers
KOLs (Key Opinion Leaders) and KOCs (Key Opinion Consumers) are Chinese influencers, that can help you gain visibility and brand awareness across Chinese social media platforms. KOLs are influencers and celebrities with huge fan bases reaching millions of followers, while KOCs are smaller influencers with smaller but sometimes even more engaged follower groups. They are everyday consumers that show products that they use.
Chinese influencers have engaged audiences of people that trust their judgment. With a well-tailored influencer campaign, you can gain thousands of followers that will turn into consumers in a short period of time, increasing your brand reputation and sales volume.
Conclusion: win the Chinese internet audience to sell vodka in China
Chinese alcohol market is growing and the vodka market is one of the ones with the biggest potential for foreign brands. Imported spirits and premium vodkas are more and more popular among Chinese consumers, that want to spend money on high-quality imported alcohol, like Swedish whiskey or Polish traditional vodka. They order more western alcohol in bars and night clubs, and they order imported spirits online for gifts or to impress their friends.
If you want to start selling vodka in China, it’s important to first understand how the Chinese internet audience thinks and behaves. By considering cultural differences and adapting your marketing strategy accordingly, you can successfully reach this lucrative market segment and increase sales.
Need help with entering the vodka market China?
If you’d like to start selling vodka or other spirits in China but don’t know where to start, we are here to help. We have experience working in alcohol brands and we can help you with everything, for you to start selling your products in China. From explaining Chinese government requirements, through building a Chinese website to working with influencers, we are here to help launch your vodka brand in China.
We are specialists in:
Primordial before launching, we work together on your unique selling point, then on the social networks, and with the help of PR, we make sure that your business image on the networks is totally clean and reliable for the Chinese users.
Search Engine Optimization of your website will be essential, our team of specialists will take care of your e-reputation, and the management of your social networks while setting up an SEO / SEM campaign allowing you to gain places in the ranking of the Baidu Chinese search engine and increase your sales.
Our teams are professionals in lead generation. To optimize it, your e-reputation must be irreproachable. Investing in online advertising and creating quality content will help you develop your e-reputation. Finally, the evaluation of the results will be important to guide us in the next stages of your development.
Website creation, development, and audit; social media marketing (including WeChat & Weibo); PR; monthly reports and analyzes by our team of experts.
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