Don’t say that social media are changing the way we market products and services, until you have learned about their impact in China. The collectivist nature of Chinese culture has undoubtedly affected the speed in which social media have caught on in China. This particularly applies to beer in China.
Largest beer market in the world
China has been the world’s largest beer consuming and producing nation for a number of years. The competition is murderous and the number of individual players is decreasing almost yearly through mergers and acquisitions. The current number of breweries in China is 460, almost half the number of two decades ago. The top 5 breweries now have a combined market share of 73.7%. Chinese brewers are among the most heavy users of the new social media in China in the battle for the consumers’ attention. I have therefore chosen the Chinese brewing industry to illustrate how Chinese food and beverage companies are using the Internet.
Demand for beer in China was highest in 2013, after which it had to give way somewhat to wine and other fancier drinks like premixed cocktails. However, according to a prognosis made in 2021, the demand will not decline much more in the next few years.
Weibo – China’s Twitter
Not only individuals use Weibo, the Chinese counterpart of Twitter or WeChat, the Chinese WhatsApp, but with many more possibilities, companies have discovered the power of the social media as well. Beer seems like a great product to investigate the way Chinese companies are exploiting the new media.
China’s top domestic brands Tsingdao and Yanjing immediately reflect a very Chinese cultural trait: imitating. The banners of the Weibo accounts of both brands are related to football. in China too, beer is THE drink for couch potatoes, watching football.
The first posts on today’s (26-9-2014) Weibo site for Yanjing mainly inform visitors of the quickest way to get their hands on a can of Yanjing beer. The other posts relate to everyday life issues like ‘the 30 things that are most worth doing in a man’s life’. I am not really excited.
Tsingdao’s site on the other hand gives a much livelier impression, and tells you what you can eat best with a glass of Tsingdao, or leads you to the Weibo site of the Tsingdao Beer Museum. That is 1 – 0 for Tsingdao, at least from my personal point of view.
International players cannot afford to lag behind and are following suit. Heineken’s Weibo home page is all about . . . Heineken, while Budweiser is measuring itself a musical image, both on the site’s banner and in the content of the first posts.
Whether or not a company is active on a social network and if so, with what type of banner is not the most exciting aspect. Much more interesting is the analysis of how and how much netizens discuss a certain brand. In China as well, statisticians have discovered that all that online communication is by no means idle talk, but a true mine of information about the way consumer perceive a certain product, company or brand.
They are referring to this a the koubei (literally: ‘oral stele’) of a brand. Koubei is hard to translate properly. Dictionaries usually give ‘public praise’ as the translation, and I am inclined to go for ‘reputation’, although Chinese usually refers to that concept with another word. However, the figures featuring in statistic reports are not only about praise, but also refer to brand awareness, or the frequency in which a brand pops up in online conversations.
Let’s have a look at the statistics published this week about the way beer brands are discussed in the Chinese online media. The statistics have been compiled by the China Statistical Information Service Centre (CSISC). For each item, I will list the top 3 and Heineken, to see how this top international brand is faring in China.
The first dimension is ‘brand awareness index’.
Pearl River here ranks higher than Snow Flake, which is China’s current top brand according to turnover. Heineken ends up rather low, with two international brands, Budweiser and Carlsberg, before it.
The second dimension is ‘consumer interaction index’; how much netizens mention a brand in online conversations.
This ranking coincides with the ranking using financial indicators. Heineken is quite close, but still lags behind two international brands: Asahi and again Budweiser.
Then we move on to the ‘quality recognition index’.
Not much needs to be added here and Heineken only has, once more, Budweiser before it.
The ‘company praise index’ sounds intriguing. This is not about merely mentioning a brand, but doing so in a positive way.
Can you guess what international brand outranks Heineken in this table?
The following index, ‘brand praise index’, resembles the previous one but concentrates on the brand rather than the producer.
Snow Flake is the big winner here, but Heineken is still behind Budweiser.
The final figure is the ‘brand health index’; how healthy do netizens believe a brand is. This seems odd for beer, and indeed the figures literally turn around the brands.
Qingke Beer is made in Tibet using the local Qingke barley. This has a relatively healthy image, but because this is about an alcoholic beverage, consumers do not really regard it as healthy. The other beers that come out in high position are all smaller local breweries, that apparently gives them more credit in the health department.
Our Heineken now ranks higher that all top domestic brands and its American competitor Budweiser. However, a number of international brands, like Suntory and Carlsberg, still rank slightly higher.
It is not immediately obvious to draw conclusions about these figures. I will leave that to my readers, but am also interesting in learning your reactions. I am sure more figures like this will be published for other product groups. I will make new items for them, or add them to existing items in this blog.
So how much beer does China actually produce? Here is the regional breakdown of the volume during the first 9 months of 2014, with the in- or decrease compared to the same period in 2013.
|Region||Volume (1000 L)||Growth (%)|
More interest in traditiional culture (?)
The revival of interest in traditional culture seems to have returned to the Chinese brewing industry as well. China Resources has launched beer with painted faces from traditional Chinese operas on the labels early 2020.
Eurasia Consult Consulting can help you embed your business in Chinese society.
Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success.