The Global Baijiu Market Set To Witness High Growth Owing To Rapid Urbanization In China
Baijiu, also known as Chinese liquor or white spirit, is a clear spirit with a alcohol content around 40%-60%. It is the most commonly consumed distilled alcoholic beverage in China. Baijiu is used for drinking, cooking and in traditional Chinese medicine. The variety of styles and grades allows for consumption for any occasion, from daily drinking to business entertaining and celebration drinking.
The global baijiu market is estimated to be valued at US$ 116.31 Bn in 2024 and is expected to exhibit a CAGR of 11% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Rapid urbanization in China has been one of the key drivers for the growth of the baijiu market. As people migrate from rural areas to cities, their purchasing power and exposure to new trends increases. This has boosted the consumption of baijiu in urban settings for social drinking and entertainment purposes. According to the National Bureau of Statistics of China, China's urbanization rate rose from 51.5% in 2010 to 60.6% in 2019. The growing middle class urban population is adopting western drinking habits and increasing their spending on luxury baijiu. Furthermore, the Chinese government's support through initiatives promoting baijiu as a part of Chinese culture is also contributing to the market growth. However, stringent regulations and increasing health awareness related to high alcohol content are some of the challenges faced by the baijiu market.
SWOT Analysis
Strength: Baijiu's long history and tradition in Chinese culture give it brand recognition and popularity among Chinese consumers. It is considered an important part of Chinese dining culture and is regularly consumed during social gatherings and celebrations. The market is dominated by a few very large producers which helps ensure product quality and consistency.
Weakness: Baijiu's strong alcoholic taste often puts off non-Chinese consumers and its reputation is limited primarily to the domestic Chinese market. Despite its popularity at home, it remains relatively unknown globally compared to other spirits. Production processes can be inconsistent between smaller producers.
Opportunity: Expanding overseas export markets as more international consumers develop an interest in Chinese culture and cuisine. Younger, wealthier Chinese consumers are experimenting with premium and artisanal baijiu variants presenting an opportunity to attract new drinkers. E-commerce provides an efficient new sales channel within China.
Threats: Rising health awareness among Chinese consumers could lead to lower consumption rates over time. A slowing Chinese economy may impact discretionary spending on alcohol. Stricter new regulations on alcohol advertising and sales could dent industry revenues. Increasing popularity of imported spirits, beer and wine is adding competition.
Key Takeaways
The global Baijiu Market Size is expected to witness high growth over the forecast period of 2024 to 2031. The global baijiu market is estimated to be valued at US$ 116.31 Bn in 2024 and is expected to exhibit a CAGR of 11% over the forecast period 2024 to 2031.
China dominates the global Baijiu market accounting for over 90% of total revenues. The vast size of the Chinese domestic market coupled with Baijiu's cultural importance ensures strong future demand growth rates above the global average. Neighboring Asian markets like Japan and Southeast Asian countries present opportunities for international expansion given increasing economic ties with China in recent decades.
Key players related content comprises:
Key players operating in the Baijiu market are GE Renewable Energy, Siemens Gamesa Renewable Energy, Vestas Wind Systems A/S, DNV GL, SGS SA, Mistras Group, Inc., UL LLC (Underwriters Laboratories), Intertek Group plc, and SkySpecs.
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