Why Breaking Into the Chinese Beer Market Is Almost Impossible | WSJ

Why Breaking Into the Chinese Beer Market Is Almost Impossible | WSJ


(rock music) – [Narrator] China is the largest beer market in the world and a particularly hard one to crack. (beer tab pops) Global brands have been desperate to sell more here but you know what? It’s really competitive. – [Steven] International beer giants, like Heineken, Carlsberg
and Annheuser-Beusch, are in an intense competition with the Chinese giants like Tsingtao and Snow. Last year alone, the country consumed 46 billion liters of beer. That’s about twice as much as in the U.S. The issue with this market,
mostly because it’s so competitive, is that it’s
really hard to make money. Consumers here can buy beer for about 30 cents a can in supermarkets. – [Chris] We’re in Yu Man Tang. Historically, this is a place with a lot of local business,
there’s a night market. Locals will come out here
to eat some street food and drink some beer at night. – [Steven] Chris Wong
has been selling beer in the region for the past seven years to wholesale and individual consumers. – [Chris] So a lot of people they enter into the China market, seeing a lot of people there they see a pot of gold. However, there’s a lot
of difficulties, right? People are used to drinking very cheap commercial lagers just as cheap as water. – [Steven] International beer-makers and start-ups alike want people to drink more expensive beer. Like IPAs, wheat beers or just regular lagers popped in fancy bottles. These drinks can make up to eleven times more money than the regular beer usually consumed in China. So, how do you convince people
to spend more money on beer? Especially at a time when the Chinese economy is slowing down? (hiphop music) First, you gotta tap into the culture. – [Rohit] We do about 1000
liters per batch every day. Production has been increasing
constantly every month for the last six years
since we’ve been operating. – [Steven] Rohit Dugar says that you can’t succeed in the market without understanding Chinese consumers. The Hong Kong based entrepreneur launched a line of craft beers,
called Young Master, that sit at the very
top end of the market. His beers sell for up to 20 dollars at bars in large Chinese cities. Something many brewers dream about. He says his rivals don’t
have a plan like his. – [Rohit] There are small start-up, much larger breweries, they are viewing China as kind of a quick win. The long-term success
will be for people who are on the ground putting
in fundamental effort. – [Steven] So Dugart has
developed a clear-cut strategy: Make his beers look and taste
familiar to Chinese drinkers. – [Rohit] The way we name our beers. The illustrations from local scenes. The aesthetics we use, everything is kind of informed by local culture. This beer is called Cha Chaan Teng sour. We added some salt-cured lime and it’s a very common
ingredient used locally. People mix it with sodas and
drink it in coffee shops. (upbeat hiphop music) – [Steven] Cheers.
– [Rohit] Cheers. – [Steven] Ah that’s good,
tastes like something I would drink, like,
after running a marathon. But not all Chinese consumers are ready to shell out 20 bucks for a luxurious craft beer. We asked Matteo Fantacchiotti. – [Steven] Hey, how’s it going? Who manages sales for Carlsberg in Asia, to explain how his company does the job. – [Matteo] Blanc is quite a citrusy beer. It pairs well with fine
dining group experience. – [Steven] Carlsberg sells
a wide range of beers and each one is marketed to
suit different occasions. – [Matteo] This is the
typical local beer in China. So very light, going very well
with hot pot and hot cuisine. – [Narrator] Here are
some of Carlsberg’s beers you can get at a grocery store. From the low end to the premium. The idea is to get people who’ve been drinking a Wusu for about a buck to upgrade to a Carlsberg. The goal would be to gradually move them all the way up to a 3
dollar Brooklyn lager. Beer-makers are doing everything
they can to stand out. Brands put their logo on the tap right here in front of consumer’s faces. Corona has figured out that limes are key to grabbing people’s attention and Chinese consumers see it as a novelty. It’s one of the key
reasons why Corona sales, in China, have surged about 25 times over the past four years. Where beer comes from is
important to Chinese drinkers. – [Matteo] Drinking more
premium international brands is a symbol of, first, you can afford it, secondly, you know what to drink and the local brand will
play a significant role because there is the pride, habit of, you know, drinking your local beer brand. – [Steven] An example of super local beer, Wind, Flower, Snow, Moon. Carlsberg has been acquiring local craft breweries like this one in Yunnan. Industry analysts say Chinese consumers are attracted by foreign brands, which has made some, like Budweiser, extremely successful in the region. Beer-makers want to appeal
to Chinese palettes. Remember that fermented lime beer? From that Hong Kong brewery? Well, there’s also pineapple flavored beer and some brewers say their
beers are made with wheat and clean water to give
off a healthy impression. (record scratch) So, I didn’t have to drink these beers while reporting this story
but I insisted on it. You know, for the sake of
journalistic due diligence. (inspiring operatics) It’s not bad, it’s fruity, pleasant. I can get used to it. These sales strategies have been used before in other parts of the world. – [Greg] We could’ve brewed our beer in a town you’ve never heard of. – [Steven] And actually
worked pretty well. – [Man] Let them drink beer, ha ha ha. – [Steven] But beer-makers say it’s even more important
to get them right in China because if they don’t plan properly, there can be consequences. – [News Anchor] Indefinitely, it’s not proceeding with it’s
announced public offering- – [Steven] For example, in July, Annheuser-Beusch INBEV, the
producer of Budweiser… – [Newswoman] China sales
for them is a big deal. – [Steven] …dropped its plan for what would’ve been the year’s biggest IPO. The company says it flopped because of prevailing market conditions. Investors worried that the strategy would not make enough money in Asia. The intense competition between Chinese and international beer-makers might scare board rooms and investors
across the world, but for Chinese drinkers,
that only means one thing, a greater diversity of beers. So consumers better hope that
companies keep up the fight. (upbeat hiphop music)

100 thoughts on “Why Breaking Into the Chinese Beer Market Is Almost Impossible | WSJ”

  1. Anyone giving HQB any love here yet? No? Ok, I love HQB and its $0.50 price! But let me try and salvage this comment by saying something with a little more sense. I love an expensive beer at the start but when I’m getting sloshed, I wouldn’t want to (because I won’t be able to tell the difference) pay more than $2 for a beer I won’t even remember.

  2. Nothing beats an ice-cold Tsingtao on a nice hot day….except for an Asahi for 20RMB happy hour LOL but really, Chinese consumers care more about the status products bring them over the actual taste. This is a big reason why brands like Heineken, Budweiser, and Carlsberg have been able to poach the market. Higher priced foreign brand = 'I have more money' = 'I have more status' FoRgEt the aCtUaL TaStE. I honestly find it surprising Tsingtao isn't a more global brand. Great quality, great prices. Global beer competitors will quake in their shoes the moment Tsingtao focuses on reaching more of the global market.

  3. Capital city of the world is hong kong.. and its favorite most selling beer is the original san miguel pilsen of maharlika(philippines). Best beer i had ever drink. Hong kong knows whats up.

  4. Really. For you everything is impossible because you are stupid. It’s easy. Do not listen to this stupid channel. I have many ways to get it done. For stupid people. Everything is impossible. Have you done it? Nope.

  5. Im willing to be most of the chinese beers are intellectuall knock offs of some other companies product. I mean china bootlegs everything else.

  6. no wonder why the wusu beer is always more expensive… i thought it was because xinjiang is expensive but no its carlsberg
    thats right even their "low price" beer is not that cheap

  7. One reason I will not leave China for a while. Cheap quality alcohol and I can literally drink anywhere anytime as long as im responsible.
    Perfect 👌🏽

  8. I think the Pineapple Beer you got there is the non-alcohol one, it is just like the ginger beer. There is another alcohol version of the pineapple beer but I seldom see it.

  9. You can sell German, Belgium beers, there is always demand for high end beer. But many of them just doesn’t worth it.

  10. Make it plain water and market it as beer with water taste for 0.10 cent per can. That would work in China.

  11. Great video. Although the middle class is growing, along with its interest in leisure and craft beers, the majority of beer consumption comes from the large percentage of lower income who have grown up with the affordable local produce.
    It is good to note that craft brands like boxing cat and goose have sprung up with attention in the previous years, but the market segmentation between leisure and mass beers should not be changing a lot. The undisputed giants mainly yanjing, tsingtao, snow and harbin will continue to dominate in coming years.

  12. The laziest bit of Journalism ever…..reporting on the Chinese beer market from Hong Kong….which is not even in China….f#cking Dope just walked downstairs from his Hotel and set up camera in the closest bar.

  13. Saying you're making your beer with clean water as a marketing catchphrase? Yikes! What is the other beers made with? Sewer water?

  14. Their economy is not slowing down. Why do you just casually lie like that? Their economy is growing with over 6 percent and their wages are growing with double digits every year. WSJ = casually lies to you.

  15. Beers in Nigeria sell for $0.55 on the average. The most expensive ones like Stout, Heineken, Legend etc sell for $0.83. And there are new ones that came out that sell for $0.41. So you can see, none sells for even a dollar. Try that here and get ready to consume all you brewed yourself.

  16. Gotta know exactly what you're doing in Asia. I know of a smaller german brewery that started slowly selling to Asia. One day they had a problem with the printers that print the best by date on the bottom of the can and some cans had weird overlaying prints. They thought not much of it and send two containers there. Unfortunately that Asian country had very very strict regulations due to a lot of fraud and mislabeling food products going on there. They basically said the brewery just printed a new best by date on some old cans that arrived their first best by date. Something nobody would even think of doing in germany. In the end of the day all two containers needed to be destroyed and they were heavily fined. The entire thing cost around a half million US$…

  17. Corona, 1664 Blanc, and Carlsberg are all doing great in China right now. Apart from Tsingtao and Snow beer in China, in poverty cities you still have Heineken and Budweiser. Scattered throughout China is German beer such as Oettinger and Paulaner. In Shanghai and other major cities it is also easy to find Japanese beers like Sapporo, Asahi, and Kirin. These are all available in supermarkets and connivence stores. Major cities like Shanghai, Chengdu, Beijing, Guangzhou, Shenzhen also have beer shops with inventories of over 1000 kinds of imported beers. These type of stores where you choose a beer, sit down and drink have been popping up a lot lately.

    The main problem with the Chinese beer market is distribution channels. There is no main distribution to stores and restaurants, it's all regional and unorganized. Therefore a new beer coming into China has to deal with setting up distributors and such for every city and also many of them do not want to carry a new beer since the more established companies would pay them not to or would forbid it.

  18. 5:07 As an Asian we do not talk our parents like that. We certainly do not celebrate over beer. It is likely we drink whiskey or Chinese wine.

  19. This would have been a really good opportunity to also mention the fact that 40% of Chinese people according to one survey in the cities, knowingly drink fake beer just because it's cheap and they still feel intoxicating effects. The beer is as cheap as water vs our beer because it isn't all beer, it still costs someone a lot of time and material to make good beer no matter where you make it, and the Western companies have standards that make competing with that price impossible. Western beer makers should try not to reach this market, but create a fancy high class market than bring it down to the middle class, since that's how a lot of Western products are seen as anyways. Of course, there are also the cultural issues this video highlighted as well. If anyone wants a good example of a similar situation, go look into the infant baby formula market in China.

  20. Journalist due diligence: talking about the Chinese beer market without interviewing a single beer drinker from mainland China.
    I bet 80% of the 1.3 billion Chinese people have no idea what salt-cured lime is, no matter how common it is in Hong Kong.

  21. Beer companies promoting customers to spend more on beer. Well why do they do it. You would say Profit right. Wrong, what's happening under the hood is more sadistic. Let me explain, if people consume more than they have to and also spend more than they usually do, they will inevitably be doing is getting habituated to spending more and drinking more. And what will this lead to more power in the hands of the corporation controlling the supply. The real goal of the corporation is power, profit is just a benign word for it. They want control. We are moving into a totalitarian society which is even worse than communism where control is invisible. Don't believe me just think about how many Netflix series you watch just to keep up with your friends and stay cool in front of their eyes. Capitalism is now controlling even what we do in our free time.

  22. This is very interesting, because, from my experience, Chinese people see foreign products as superior and high-end even, and are willing to pay a premium for them.
    It's mentioned in the video at 4:30 and 5:00 but seems to be contrary to what the title is suggesting.

  23. why is this filming in hong kong as a stand in for all of china ? hong kong is not china ! the markets are totally different …. i’ve never seen young master or other hk craft beers anywhere in the mainland

  24. So next time if you can't get a visa, maybe you can just change a subject, or just a title like why hong kong beer market is so competitive…

  25. For special occasions, once in a blue moon kind of thing, maybe the more expensive beer will do, for the frequent drinker or alcoholic, all of them will get you drunk the same so price is the biggest point.

  26. 1. Make them good and cheap

    2. Play friendly and locally

    3. Ask your government and NGO's to stop lame and insidious attacks to the Chinese people.

    Beers are emotional.

  27. In mainland China, almost only lager. To most mainland people, lager=beer, do they don’t even know the name “lager” or “IPA” or “weiss beer”. Other types of beer take a very small portion of market, though you can find them in some bars dedicated to craft beers. In most supermarkets in Hong Kong, there are more choices. I think in the future, Chinese people will get to know all types of beer. Think about that huge market. Good for everyone.

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