Japanese beer company Asahi plans to expand in China, targeting major cities like Shanghai and Shenzhen initially before widening its footprint across the country, the world’s largest beer market.
“We want to grow our brand from a regional Japanese brand to a global icon,” said Kinyi Choo, managing director of Asahi Beer Asia, “and to be available across all of China, across all channels.”
The Japanese beer brand, which mainly sells to Japanese restaurants in China, wants to be made available via all channels including grocery stores, restaurants and hotels.
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“Our strategy is very much focused on being the leader in the Japanese channels rather than the whole market, focusing on Asahi Super Dry as our flagship brand, and riding the 2022 success of Asahi 2.0 in Japan,” said Choo in an interview with the Post.
“China is a key market in Asia,” said Choo. “One strategic pillar we’ll be entering is e-commerce, a very critical but also a very challenging channel.”
Asahi plans to tap Chinese e-commerce platforms such as Jing Dong, Taobao, and Douyin, as well as live-streamers.
“We are still at a very early stage, but we see a lot of promise [in e-commerce],” said Choo.
The move comes at a time when the beer market is showing opposing trends in Asia’s two biggest economies.
The beer market in China is currently valued at US$103.1 billion in 2022 and is projected to balloon by 41 per cent to US$145.6 billion by 2027, according to market research agency Euromonitor International.
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China consumption of 43.1 billion litres of beer in 2022 is expected to rise to 49.9 billion litres in 2027. In contrast, Japanese consumption is expected to shrink to 4.4 billion litres in 2027 from last year’s 4.9 billion.
Choo believes the sheer scale and size of China’s beer market is something the firm can’t ignore, being “the biggest market in Asia” and a “huge opportunity” for the brand.
Asahi launched in mainland China in 1994 and bought a 20 per cent stake in Tsingtao in 2009. It later sold its stake to Chinese conglomerate Fosun in 2017 with a view to “restructure business portfolio with a focus on asset efficiency” and shifted its attention to the European and other Asian markets, it said in a statement.
In its expansion plan for this year, the brand wants to strengthen its foothold in the region through Hong Kong and the Greater Bay Area (GBA) markets, which Choo said are central part of its expansion.
“I’m very bullish about the GBA, it’s going to be a significant force going forward, particularly in this part of the world and globally as well,” said Choo.
The GBA has a combined population of 70 million and GDP of US$1.5 trillion (HK$11.77 trillion). That number is about twice the value of the annual contribution made by the San Francisco Bay Area.
While regional local beers such as China Resources Snow Breweries (CR Snow) and Tsingtao Brewery make up over 90 per cent of the market, a noticeable segment for craft beer, premium brands and foreign products has emerged, according to Euromonitor.
“We’re seeing [Chinese] consumers want high quality, premium offerings that you want to be able to enjoy, [although] not in huge quantities,” said Choo.
Asahi positions itself at the premium end of the market and emphasises taste as a strong point of differentiation. A 500ml bottle of Asahi Super Dry costs about 6.6 yuan (HK$7.10) compared with the 4 yuan (HK$4.30) for a local beer brand like Tsingtao or CR Snow.
Choo said Chinese consumers prefer light beers with alcohol levels of 3.5 per cent by volume or less. That makes the taste of Asahi’s brands Super Dry and Peroni match their palettes. In addition, the company plans to attract customers by using Japanese culture.
“Japanese culture and innovation, in fact everything Japan, resonates really well with Asian consumers, and we will ride and use this to strengthen our premium positioning,” he added.
More from South China Morning Post:
- Asahi changes Japan’s bestselling Super Dry beer recipe for first time
- Tokyo 2020: Japan plans to allow some spectators at Olympics, TV Asahi says
- Japanese beer maker Asahi to borrow US$11 billion to complete purchase of AB InBev’s Australian business
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