Name: Why Breaking Into the Chinese Beer Market Is Almost Impossible | WSJ
Uploaded: 2019-08-28T10:11:13.000Z
Duration: 6 min 51 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

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China is the largest beer market in the world and a particularly hard one to crack.

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Global brands have been desperate to sell more here, but you know what, it's really competitive.

International beer giants, like Heineken, Carlsberg and Annheuser-Beusch, are in an intense competition with the Chinese giants like Tsingtao and Snow.

Last year alone, the country consumed 46 billion liters of beer.

That's about twice as much as in the U.S.

The issue with this market, mostly because it's so competitive, is that it's really hard to make money.

Consumers here can buy beer for about 30 cents a can in supermarkets.

Historically, this is a place with a lot of local business. There's a night market.

Locals will come out here to eat some street food and drink some beer at night.

Chris Wong has been selling beer in the region for the past seven years to wholesale and individual consumers.

So a lot of people they enter into the China market, seeing a lot of people there, they see a pot of gold.

However, there's a lot of difficulties, right?

People are used to drinking very cheap commercial lagers, just as cheap as water.

International beer makers and start-ups alike want people to drink more expensive beer.

Like IPAs, wheat beers or just regular lagers popped in fancy bottles.

These drinks can make up to eleven times more money than the regular beer usually consumed in China.

So how do you convince people to spend more money on beer, especially at a time when the Chinese economy is slowing down?

We do about 1,000 liters per batch every day.

Production has been increasing constantly every month, for the last six years since we've been operating.

Rohit Dugar says that you can't succeed in the market without understanding Chinese consumers.

The Hong Kong based entrepreneur launched a line of craft beers, called Young Master, that sit at the very top end of the market.

His beers sell for up to 20 dollars at bars in large Chinese cities.

He says his rivals don't have a plan like his.

There are small start-up, much larger breweries, they are viewing China as kind of a quick win.

The long-term success will be for people who are on the ground putting in fundamental effort.

So Dugart has developed a clear-cut strategy: make his beers look and taste familiar to Chinese drinkers.

The aesthetics we use, everything is kind of informed by local culture.

We added some salt-cured lime and it's a very common ingredient used locally.

People mix it with sodas and drink it in coffee shops.

Ah that's good. Tastes like something I would drink, like after running a marathon.

But not all Chinese consumers are ready to shell out 20 bucks for a luxurious craft beer.

Who manages sales for Carlsberg in Asia, to explain how his company does the job.

It pairs well with fine dining group experience.

Carlsberg sells a wide range of beers, and each one is marketed to suit different occasions.

So very light, going very well with hot pot and hot cuisine.

Here are some of Carlsberg's beers you can get at a grocery store.

The idea is to get people who've been drinking a Wusu for about a buck to upgrade to a Carlsberg.

The goal would be to gradually move them all the way up to a 3 dollar Brooklyn lager.

Beer makers are doing everything they can to stand out.

Brands put their logo on the tap right here in front of consumer's faces.

Corona has figured out that limes are key to grabbing people's attention, and Chinese consumers see it as a novelty.

It's one of the key reasons why Corona sales, in China, have surged about 25 times over the past four years.

Where beer comes from is important to Chinese drinkers.

Drinking a more premium international brand is a symbol of, first, you can afford it.

Secondly, you know what to drink. And the local brand will play a significant role because there is the pride, habit of,you know, drinking your local beer brand.

An example of super local beer, "Wind, Flower, Snow, Moon."

Carlsberg has been acquiring local craft breweries like this one in Yunnan.

Industry analysts say Chinese consumers are attracted by foreign brands, which has made some, like Budweiser, extremely successful in the region.

Beer makers want to appeal to Chinese palettes.

Remember that fermented lime beer, from that Hong Kong brewery?

Well, there's also pineapple flavored beer, and some brewers say their beers are made with wheat and clean water to give off a healthy impression.

So I didn't have to drink these beers while reporting this story, but I insisted on it.

You know, for the sake of journalistic due diligence.

These sales strategies have been used before in other parts of the world.

"We could've brewed our beer in a town you've never heard of."

But beer makers say it's even more important to get them right in China because if they don't plan properly, there can be consequences.

It's not proceeding with it's announced public offering...

For example, in July, Annheuser-Beusch InBev, the producer of Budweiser...

...dropped its plan for what would've been the year's biggest IPO.

The company says it flopped because of prevailing market conditions.

Investors worried that the strategy would not make enough money in Asia.

The intense competition between Chinese and international beer makers might scare boardrooms and investors across the world, but for Chinese drinkers, that only means one thing, a greater diversity of beers.

So consumers better hope that companies keep up the fight.