Market entry study helps European beer brand gain quick access into China
The client in this project is a Finnish beer brewery seeking to enter China market. With a long history of success in its local market, the company strives to continue its momentum and expand into one of the largest beer markets in the world: China.
With that goal in mind, the client turned to ARC Consultings to gather more insights into the beer industry value chain in China. Additionally, ARC Consulting vetted potential partners to help the client access the market shortly after the project concludes.
China consumes 4.6 million tons of beer annually, making it one of the highest global markets. Imported beer represents approximately 3.6% of the total market, growing rapidly at a rate of approximately 40% year-over-year. Premium craft beer is a fast growth sector of the market.
For a foreign brand to enter the Chinese market, careful evaluation and planning is required. New brands do not typically have a high success rate, driven by price competitiveness and the abundance of existing brands already available. As a result, to export into China successfully, selecting a local business partner is critical.
The project report consisted of two parts. First, a market value chain analysis, where the main channels to market were evaluated based on the product-channel fit. Second, a presentation of shortlisted potential brand carriers was provided. The shortlisted brand carriers were recommended based on the information garnered by ARC Consulting during telephone interviews and face-to-face meetings. The potential brand carriers were then evaluated based on their company size, current product portfolio, and most critically, the fit of their distribution channels and their interest in a co-operation with the client.
The potential brand carriers were then evaluated based on their company size, their current product portfolio, and more importantly their distribution channels fit and interest level towards the cooperation.
The final recommendations were given according to a scorecard based on the aforementioned criteria. ARC Consulting accompanied the client on site assessments of the potential brand carriers to provide external support for the visits.
Upon completion of the project, the client’s market entry was more efficient, and their ability to do business in China was greatly improved. ARC Consulting saved valuable time for the client by conducting market research, pre-screening potential partners and providing unbiased and independent assessments of the potential partners based on industry experience and local knowledge.