The rise of a drinking culture at Chinese social gatherings, along with increased disposable income among younger consumers, are set to drive the Chinese spirits market through a CAGR of 15 per cent over 2016 to 2021, says GlobalData, a recognised leader in business intelligence and analytics.
In 2016, the Chinese spirits market held 32.8 per cent of the global volume share and 52.3 per cent of the Asia-Pacific regional volume share – and it is projected to reach 46.9 and 66.2 per cent respectively by 2021. The volume of spirits consumption is expected to rise from 8.4 billion liters in 2016 to 16.9 billion liters in 2021, growing at a CAGR of 15 per cent.
China’s younger consumer base that drink on social occasions and the country’s increasing number of female drinkers will play a key role in the years to come for the Chinese spirits market. Per capita spirits consumption in the country was pegged at 7.3 liters in 2016, nearly a full liter over the global average of 6.4 liters and 6.2 liters in the Asia-Pacific region. China’s per capita spirits consumption is set to rise to 14.4 liters by 2021, according to the report.
GlobalData analyst Ryan Whittaker says, ‘The country’s GDP has grown at a rate of around seven to eight per cent in the last few years, which has increased disposable income, especially in more cosmopolitan urban areas. With more dispensable income, these Chinese consumers love to spend on social occasions, especially on drink.’
Specialty Spirits are Chinese drinkers’ favourite category compared to other sprit types; it accounted for 94.2 per cent and 98.2 per cent in terms of value and volume respectively in 2016. This large size is caused by the large amount of locally produced and China-specific spirits. The category, worth US$193.3 billion in 2016, is set to grow further at 15.1 per cent per year, dominating the overall spirits market to 2021. Brandy was second in the market with a 3.9 per cent value share and a 0.9 per cent volume share, followed by Whiskey, Vodka, Gin and Genever, Tequila and Mezcal, Liqueurs and Rum. Of these trailing category, Tequila and Mezcal demonstrates the most notable signs of potential growth ahead.
Whittaker adds, ‘While the Tequila and Mezcal category is at the bottom in terms of value and volume, it will witness the fastest growth, rising at 21.6 per cent over 2016 to 2021.’
In 2016, every six in ten spirits consumers were male in China. Consumption was high among consumers with tertiary education, who accounted for 75.6 per cent of the total, followed by 17.3 per cent consumers with post-secondary education. In terms of geography, Spirits consumption is mostly concentrated in urban China with a significant share of 97.5 per cent.