The Chinese Hot Drinks Market: What Consumers Drink and Why?




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Product Synopsis

This report provides the results for the Hot Drinks market in China from Canadean's unique, highly detailed study of consumers' Consumer Packaged Goods (CPG) consumption habits, and forms part of an overall series covering all CPG product markets. Its coverage includes, but is not limited to, consumption behaviors, the extent to which consumer trends influence their consumption, the value of the market these trends influence, and brand and private label choices as well as organized retailer choices. Much of this information can also be analyzed by specific consumer groups, providing hard and fast data on consumers and markets at the product category level.

Introduction and Landscape

Why was the report written?

Marketers in the Hot Drinks market face a major challenge. Understanding market size and segmentation is valuable, but the key to effective targeting is knowing just how valuable specific consumer groups are, and being able to quantify the impact of consumer trends. This data report solves these problems by providing survey-based data on consumer trends and consumer groups, and market data that shows the exact size of consumer groups, how much of the Hot Drinks market they account for, and which consumer trends drive their behavior.

What is the current market landscape and what is changing?

As consumer confidence increases with the economic recovery, consumer trends will be directly affected. Since the global financial crisis of 2008-2009 the organized retail market has been characterized by an increase in the amount of discounted and own-brand products. While the Chinese economy has maintained positive growth, consumer spending declined. As economic and market recovery continues over 2012, consumption patterns will record a positive trend in both the Medium and Heavy frequency bands and the amount of Non-users should decrease.

What are the key drivers behind recent market changes?

Consumers' uptake of products and the influence of consumer trends are fundamental causes of change in markets - making knowing what these trends are and the extent of their influence crucial. The survey-based data provided in this report examines over 20 consumer trends that affect the market and examines the share of consumption across 26 consumer groups. This data provides a detailed insight into exactly who the consumer is and just how much impact the latest consumer trends are having.

What makes this report unique and essential to read?

The data provided is unique in the market as it tracks consumer behavior through to its actual value impact on a product market. This provides readers with a unique data analysis of the market, allowing marketing tactics and strategy to be updated in line with the very latest consumer behaviors.

Key Features and Benefits

  • Consumer data, based upon proprietary surveys and then consumer group tracking and modeling for the following specific categories: Coffee, Tea, and Other Hot Drinks.
  • Detailed consumer segmentation covering over 26 consumer groups, 20 consumer trends, and consumption frequency for each product category.
  • Consumer penetration for brands and private labels, based upon the original survey and then subsequent consumer tracking and modeling.
  • Unique retailer choice data at the product category level in organized sector, based upon the original survey and then subsequent consumer tracking and modeling.

Key Market Issues

  • The majority of Coffee consumption in China is Light or Medium, with Older Consumers recording the highest proportion of Heavy consumers, 21%.This is in contrast with Tea, where Heavy and Medium consumption is most common across all age groups.
  • Consumer segmentation analysis reveals that the Better Off wealth group accounts for approximately39% of the hot drinks market in value terms, despite accounting for 35% of the country's population. This can be attributed to their greater consumption of premium brands.
  • Consumer analysis reveals that two of the busy lives groups at opposite ends of the spectrum account for approximately60% of hot drinks consumption in value terms. Suppliers may wish to target these groups with different sub-brands as aiming at both with the same product may leave the supplier stranded in a no man's land.

Key Highlights

  • Global organized retailers operating in China such as Carrefour, Walmart, and Tesco have close to 69% volume share in China's hot drinks market. 
  • Brand analysis reveals that private labels have less than 12% volume penetration in the Coffee market in China, with private label penetration highest in the Other Hot Drinks category. Brands are strong in emerging economies such as China as they provide consumers with aspirational products, with brand images strongly related to affluence.
  • Key trends driving Chinese consumers' choices of Hot Drinks include Personal space and time and Changing Life stages. These reflect growing urbanization and migration to cities, as Hot Drinks provide respite in work-heavy office and factory schedules, and urban consumers increasingly delay settling down, marriage, and childbirth.