What’s brewing in China’s consumer market

Goodbye industrial beer, hello craft beer — here’s how China’s consumer preferences are moving towards premium products.

Ever heard of Baby Jasmine Tea Lager, Hot Dry Noodle Stout, or Durian Porter? Yes, these drinks do exist. In fact they’re just some of the popular craft beer flavours currently being sold in China today.

Beer wasn’t always popular in China, but more people are developing a taste for craft beer. In fact, the volume of craft beer sales has risen nearly 30 times over the last decade, and it’s expected to grow even more. To cater to the increasing demand, micro-breweries are experimenting with local ingredients.

The great consumption upgrade

Change is brewing in China’s consumer market — and it’s because of premiumisation. With rapid urbanisation and increasing income levels, we’re seeing a consumption upgrade across the country. Chinese consumers — including those of the low- and middle-income groups — want higher quality and luxurious products now that they have higher spending power.

So even though the price of craft beer is twice that of mass-produced, industrial beer in China, it is becoming the more popular choice.

It’s not just the beer industry that’s raising the bar; the broader consumer sector is also expected to expand as more people “go premium”. Companies are also responding to this demand for quality goods by upgrading their products and services to monetise their premiumisation efforts.

Investors looking to invest in China’s consumer sector need to remain ahead of China’s changing consumer preferences. To find out more about China’s premiumisation trend, read our full article “Going premium: Lesson’s from China’s beer industry”.

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