by The global Baijiu Market is estimated to be valued at US$ 900.24 Mn in 2022 and is expected to exhibit a CAGR of 4% over the forecast period 2023-2030.
Market Overview:
Baijiu refers to Chinese liquor which is distilled from sorghum, rice and sometimes other types of grains. It has an alcohol content between 40-60% and is enjoyed for its unique aroma and taste. Baijiu comes in many varieties depending upon the production process used and raw materials involved. It is a very popular alcoholic beverage in China and finds wide usage in Chinese cuisine, social gatherings and ceremonial purposes. With rising disposable incomes and increasing focus on Chinese traditions, the demand for authentic Chinese alcoholic drinks like Baijiu remains strong.
Market key trends:
One of the key trends driving the Baijiu market is the flourishing domestic demand from China. As Chinese economy progresses, people are opting for premium and super premium Baijiu varieties. Major Chinese liquor companies are launching new expensive products to tap this segment. Improved quality, variety in taste profiles and stylish packaging are appealing to younger Chinese population. Strong economic growth and rising prosperity in China will ensure steady demand growth for Baijiu in coming years. Increased export of Chinese liquors as part of cultural diplomacy initiatives is also opening new opportunities. Baijiu companies are now targeting expansion in Western countries to introduce more people to Chinese drinking traditions and culture.
Porter’s Analysis
Threat of new entrants: The threat of new entrants is low in the Baijiu market due to the presence of stringent regulations regarding manufacturing, high costs associated with R&D for product development, and established brand loyalty of existing customers towards premium brands.
Bargaining power of buyers: The bargaining power of buyers is moderate as the industry has many established brands and buyers have distinct preferences. However, buyers cannot switch between products easily due to loyalty.
Bargaining power of suppliers: The bargaining power of suppliers is low as the industry uses basic raw materials that are available from multiple suppliers. Switching costs are also low for suppliers.
Threat of new substitutes: The threat of new substitutes is moderate as other alcoholic beverages can potentially substitute Baijiu. However, distinct Chinese cultural identity associated with Baijiu prevents strong substitution.
Competitive rivalry: Competition in the market is intense as major brands continuously launch new premium and value-added products.
Key Takeaways
The Global Baijiu Market Is expected to witness high growth, exhibiting CAGR of 4% over the forecast period, due to increasing demand for premium Chinese spirits among young consumers. The market size in 2022 is US$ 900.24 Mn.
Regional analysis: The Asia Pacific region dominates the global Baijiu market with over 60% share, led by China. The Chinese market is expected to grow at a CAGR of 3% during the forecast period driven by growing population and urbanization. Rising disposable incomes are also increasing consumer spending on premium Baijiu brands in China.
Key players: Key players operating in the Baijiu market include Kweichow Moutai, Wuliangye, Yanghe Brewery, Daohuaxiang, Luzhou Laojiao. Kweichow Moutai has emerged as the dominant player with over 30% market share owing to its strong brand equity and distribution network across China. Wuliangye is another major player leveraging innovation in flavors and packaging.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
