Baijiu plans global expansion

14 December 2010

BEIJING: Shui Jing Fang Baijiu, the Chinese drinks firm that is currently the subject of a takeover bid by Diageo, is planning an ambitious global launch.

Baijiu, the national drink of China, has recently gone on sale at airports in Chicago and Dallas, and the brand will initially be targeted predominantly at Chinese tourists and expats.

This market is expanding rapidly, with around 50 million Chinese tourists having already travelled overseas this year.

According to the UN World Tourism Organisation, that figure could rise to 100 million by 2020 - equivalent to the population of a country almost as large as Mexico.

Three further US airports will stock Baijiu from early next year, with two European airports likely to follow suit soon after.

While China has seen huge growth in alcohol consumption in recent years - and has attracted the attention of a raft of foreign brandy and Scotch whisky marketers - relative consumption of non-Chinese brands remains comparatively small.

Euromonitor's senior alcoholic drinks analyst, Jeremy Cunnington, said that Baijiu sales now top four billion litres per year in China.

By way of comparison, 18 million litres of Cognac are sold in the nation annually.

Moreover, Baijiu sales by volume are likely to grow at a 5% compound annual growth rate between now and 2015.

But Cunnington added that the drinks market remains very competitive - especially when it comes to international launches.

"It's going to be a slow burn for any company looking to push their brand ... There are so many other products out there fighting for space."

Other Asian alcohol brands have had a mixed reception outside their domestic heartlands.

Japanese sake sells only a fraction of its annual 520 million litre sales overseas and Korean Shochu, aimed largely at expatriate Koreans, has experienced similar resistance.

Data sourced from Financial Times; additional content by Warc staff