China beer sales froth be­fore WC

The Phnom Penh Post - - MARKBEUTSSINESS - Wang Zhuo­qiong

BEER sales in China and stock prices of Chi­nese brew­ing com­pa­nies rose ahead of the 2018 FIFA World Cup, which will be held in Rus­sia be­tween June 14 and July 15.

This year, many games in the foot­ball event, which is held ev­ery four years, will be watched by Chi­nese fans in bars and restau­rants where beer con­sump­tion is high, es­pe­cially pricey beers.

Beer sales had al­ready started to pick up in May, with monthly sales vol­ume in­creas­ing nearly 100 per­cent. Ac­cord­ing to Tmall sta­tis­tics, the sin­gle­day sales of beer reached 1.3 mil­lion bot­tles on the plat­form on May 17.

In con­trast with the slug­gish Shang­hai Stock Ex­change in­dex, beer stocks have risen, in­clud­ing Yan­jing Beer, Chongqing Beer, Lanzhou Huanghe and Pearl River Beer. For ex­am­ple, Pearl River Beer’s share price rose 42.7 per­cent in May.

Ac­cord­ing to Si­no­link Se­cu­ri­ties, the World Cup has boosted the beer sec­tor this sum­mer, which has seen higher temperatures so far com­pared with pre­vi­ous years.

The coun­try’s ma­jor do­mes­tic beer man­u­fac­tur­ers are in­creas­ing their of­fer­ings of medium and high-end prod­ucts. Ac­cord- ing to Euromon­i­tor In­ter­na­tional, a mar­ket­ing re­search firm, more than 30 per­cent of the beer mar­ket in China will be medium and high-end prod­ucts by 2020.

Ts­ing­tao Brew­ery Co Ltd has de­vel­oped many high-end prod­ucts in re­cent years, in­clud­ing Clas­sic 1903, whole-bar­ley Weiss­bier and Ts­ing­tao Pil­sner, adding to its prof­itabil­ity.

In 2017, the com­pany’s sales vol­ume of its core brand, Ts­ing­tao Beer, reached 37.65 mil­lion hec­tolitres. About 16.25 mil­lion hec­tolitres of its sales vol­ume was from its medium and high-end prod­ucts such as Augerta, Hong Yun Dang Tou, Clas­sic 1903 and draft beer, which main­tained its lead­ing po­si­tion in the medium and high-end mar­ket.

In 2017, the sales rev­enue from Chongqing Beer’s low- end prod­ucts such as Chongqing 33 and Shancheng dropped by 2.07 per­cent, and that of medium-range prod­ucts Le­bor and Chongqing Guobin de­clined by 1.81 per­cent. How­ever, high-end prod­ucts in­clud­ing Carls­berg, Tuborg draft and Chongqing saw rev­enue grow 8.42 per­cent last year.

In the first quar­ter of this year, Chongqing Beer, a sub- sidiary of Den­mark’s Carls­berg Group in China, sold 214,000 kilo­litres of beer, up 3.33 per­cent year-on-year, and its rev­enue reached 813 mil­lion yuan, up 10.73 per­cent year-on-year. Prof­its of the beer man­u­fac­turer based in the coun­try’s renowned hot pot city in­creased 56.9 per­cent to 75.5 mil­lion yuan in the first quar­ter.

The off­line lo­ca­tions of beer sales, such as su­per­mar­kets, which used to be the main places for beer pro­mo­tions, are grad­u­ally be­ing re­placed by on­line re­tail­ers, cater­ing sites and foot­ball-themed bars this year.

Zhu Dan­peng, an in­de­pen­dent food and bev­er­age an­a­lyst, said: “World Cup-themed mar­ket­ing ef­forts are fo­cus­ing less on tra­di­tional re­tail­ers such as su­per­mar­kets be­cause their cus­tomers are mainly mid­dle-aged and el­derly peo­ple, who are price-sen­si­tive and no longer be­long to the core au­di­ence for foot­ball games.”

Restau­rants and bars are be­com­ing a ma­jor bat­tle­field for at­tract­ing con­sumers as their cus­tomers tend to be less sen­si­tive to beer prices and are eas­ier to sell medium and high-end prod­ucts to, he said.

Ts­ing­tao’s 2017 fis­cal re­port said the cater­ing mar­ket took up more than 50 per­cent of its sales last year.

YU TIAN/CHINA DAILY

Beer is sold at a 2018 World Cup-themed pro­mo­tion event at a su­per­mar­ket in Nan­jing, Jiangsu prov­ince, on June 7.

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