Analysis & Comparison - Baijiu vs Wine Market Potential
According to China Alcoholic Drinks Association (CADA), baijiu producers in China produced 1,358.36 million hectoliters of baijiu (white or clear spirit made from grain) by 1,578 large-scale producers in 2016, which generated a sale of 612.574 billion Chinese Yuan (or approximate US$91.4 billion). The production volume was 7.65 times more than the total aggregate 177.5 million hectoliters of Chinese produced wine (113.7 million hectoliters) and imported wine (63.8 million hectoliters).
The sales and profit (79.715 billion Chinese Yuan) to the baijiu industry grew 10.07% and 9.24% respectively.
The 7 to 1 consumption ratio (baijiu vs wine) provides huge opportunity for wine businesses to grow, while it’s a challenging work to turn more Chinese baijiu drinkers to wine consumption. Demographic shows the majority of baijiu drinkers (high spending power group) are those in their age of 40s and up, when those in their young age wine was yet a popular alcoholic drink to them.
With the popularity of rational drinking and the Chinese hospitality culture (in both business and private relationships), there are more and more baijiu drinkers turning to wine consumption for health concern (as most baijiu is 50% plus ABV). While this group of baijiu drinkers is less informative and has little knowledge to wine, it’s the wine marketers’ major tasks to educate, deliver the true value of wine to this potential customer group so to secure more share of the pie from baijiu to wine consumption.