Download - Ddma snapshot report_baijiu-july-22-2013
2013July 22nd DATA DRIVEN MARKETING ASIA
W W W . D D M - A S I A . C O M
Data Driven Marketing Asia (DDMA) was founded in 2001 and is a full service market research company based in Shanghai China
A DDMA China Market Snapshot Report
Baijiu Blues: The impact of Chinese government policy on premium and super premium Baijiu consumption
DDMA was founded in 2001 and has conducted consumer, B2B market research across China and Asia Pacific for some of
the world’s leading alcohol and consumer brands.
Introduction to this report
The recently appointed Chinese leadership has
government spending as a key component of its
reform orientated policies. This policy has led to a
very steep reduction in the levels of corporate and
government entertainment. The purpose of this
DDMA snapshot report is to measure the effect
that these new government policies are having on
corporate and government entertainment across
Brief Introduction to Baijiu
largest individual spirit category in the world.
distillation of a mash which is made up of a
variety of ingredients including rice, sorghum,
beans, corn, barley, wheat, and a selection of
generally varies between 38% and 65% and
and grade.
About this study: Data collection
and methodology
Data Driven Marketing Asia (DDMA) interviewed
the owners and senior management of 103
medium to large sized Chinese companies in order
to ascertain the impact that tightening fiscal policies
and new government policies towards corporate
entertainment are having on these companies’
survey also measured how these changes are
and were conducted in June 2013.
DDMA China Market Snapshot Report July 22nd, 2013
DongLong AIA Building, Office 401, 223 Xikang Road, Jing An District, Shanghai 200040 People's Republic of China www.ddm-asia.com E: [email protected]
DDMA initiated, negotiated, established and set up a joint venture in Chengdu between JianNanChun, the second
largest Baijiu producer in the China, and V&S Sprit, makers of Absolut Vodka. The project lasted four years, and involved
extensive market research of the Baijiu market at consumer, trade, industry and government levels
46% of Chinese companies have
entertainment. The largest decreases
were in the service, retail and banking
sectors.
51% of Chinese companies have
reduced the amount of money that they
spend on corporate entertain-ment. The
largest decreases were in the banking,
manufacturing and the service
industries.
Over the past six months…..
�Frequency of Corporate Entertainment – By Industry
Total(n=103)
Service(n=12)
Retail(n=13)
Banking(n=16)
Manufacturing(n=14)
Staff & HR(n=16)
Construction(n=13)
Travel & Tourism(n=15)
Decreased No Change Increased
33% 24% 33% 27%15%
42% 41%52%
21%18% 8% 17%
29%
15% 26%
30%
46%59% 58% 57% 56%
42% 33%19%
-25%-41%
-50%-40%
-27% -27%-7%
11%
Please note that the small sample sizes in these subgroups
Spending of Corporate Entertainment – By Industry
Decreased No Change Increased
-24%
-70%
-36% -41% -37%-11% -23%
5%
Total(n=103)
Service(n=12)
Retail(n=13)
Banking(n=12)
Manufacturing(n=14)
Staff & HR(n=16)
Construction(n=13)
Travel & Tourism(n=15)
21% 10%24%
38%22%
54%65%27%
10% 32%
18%13%
33%
12%
20%
51%
80%68% 59% 50% 44% 35%
15%
Please note that the small sample sizes in these subgroups
Ju ly 22nd, 2013
DongLong AIA Building, Office 401, 223 Xikang Road, Jing An District, Shanghai 200040 People's Republic of China www.ddm-asia.com E: [email protected] P2
DDMA China Market Snapshot Report
42% of all Chinese companies have
entertainment because of new
government policies. An additional 11%
state that increased financial constraints
on corporate entertainment.
Why has expenditure decreased?
2%
Government Policy &
Company Internal Policy
Company cannot afford
Clients can not afford
42%
11%
Recent changes in Chinese government policies towards expenditure on corporate entertainment have had a significant impact on the sector.
21%
26%
40%
45%of entertainment
alcoholic beverages
Eat less or cheaper food
Select cheaper restaurants
DDMA conducts market research studies on behalf of international and domestic clients across all markets in China
Entertainment of clients from around
China and entertainment of local,
regional and central government
officials has been reduced the most.
40% of Chinese companies state
that they are reducing corporate
less alcoholic beverages
July 22nd, 2013
DongLong AIA Building, Office 401, 223 Xikang Road, Jing An District, Shanghai 200040 People's Republic of China www.ddm-asia.com E: [email protected]
Which entertainment occasions have been impacted…..
How is corporate entertainment expenditure being reduced?
P3
DDMA China Market Snapshot Report
Reduction of expenditure on alcoholic beverages, particularly baijiu, has been a key way to reduce corporate expenditure.
Decreased Increased
All occasions (n=103)
Entertaining clients
from around China (n=39)
Entertaining local clients (n=79)
Entertaining local &
regional government (n=52)
Entertaining business
colleagues (n=24)
Entertaining
Overseas clients (n=11)
51% 21% 27%
36%
38%
46%
54%
56%
27%
33%
23%
19%
15%
36%
25%
29%
27%
26%
0%
Net Change
24%
30%
27%
17%
13%
-
Stayed the Same
1%
1%
3%
4%
10%
25%
Premium Beer
International Spirits
Standard Wine
Premium Wine
Standard Baiiu
35% of Chinese companies state that
to reduce costs. In addition, 25% of
Chinese companies state that they are
Which alcoholic beverage categories are being impacted?
Impact for profitability of Chinese Baijiu companiesExpect a minimum decline of 20% in Baijiu producer profits
profits are generated from corporate entertainment and gifting.
China.
July 22nd, 2013
DongLong AIA Building, Office 401, 223 Xikang Road, Jing An District, Shanghai 200040 People's Republic of China www.ddm-asia.com E: [email protected] P4
DDMA China Market Snapshot Report
DDMA Market Research provides data collection capabilities, and conducts large scale consumer, trade and research
projects across China, and in other Asian markets. DDMA Market Research uses a variety of different methodologies in
our data collection operations including: telephone interviewing, face to face interviews via central location, street
intercept, and online surveys.
Ju ly 22nd, 2013
P5 DongLong AIA Building, Office 401, 223 Xikang Road, Jing An District, Shanghai 200040 People's Republic of China www.ddm-asia.com E: [email protected]
About DDMA
DDMA is a full service market research company based in Shanghai, China.Our clients include:
DDMA China Market Snapshot Report