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 The Market
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China is home to more than one third of the world’s smokers; Over 300 million of them. Chinese smokers consume about 1.8 trillion cigarettes each year, and the majority of the men, about 67 percent,
are regular smokers, with more smoking socially. As the wealth and sophistication of the new rich increases, so does their desire for imported, premium consumable products such as cigars, fine smoking
accessories, and similar. This trend has been demonstrated in the liquor market, which to this day is dominated by cognac and whiskey, both of which have developed premium positioning and maintain an
image as the drinks of the sophisticated business elite.
Tobacco is already a firm part of business culture here, and introducing premium tobacco products will be welcomed by an expanding market base ever anxious to increase its perceived status and
sophistication in business transactions. See Tobacco in China for Chinese tobacco culture in greater depth.
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Whiskey’s Growth in China
But the real story in Asia is, of course, China, [which] has seen massive growth in the sale of blended whiskey. The numbers are barely credible—sales of Scotch in China grew tenfold
from 2002 to 2007, according to IWSR, a London-based research company specializing in the global wines and spirits industry, with the most popular brand, Pernod Ricard's Chivas Regal, growing
from 71,000 to 729,000 cases.
What's interesting about China," says Diageo's Parsons, "is that when we try and go in with ultra-premium offerings in other categories they are not quite sure what to do with them. Scotch
definitely rules the roost in China.
businessweek.com 5 August 2008
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The Government
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The Chinese Government controls the import and distribution of tobacco products through the tobacco monopolies, and is traditionally tobacco friendly. However, it has been introducing increased tobacco
control legislation, and seems poised to extend the legislation’s scope and the impact.
This forum will present unrivaled opportunities to meet the most senior officials of the Chinese tobacco monopolies and related ministries, form constructive relationships and discuss and influence
the future of tobacco legislation in China.
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Tobacco in China
In 2006, the Chinese tobacco industry produced 2.02 trillion cigarettes, 3.5 per cent up on the previous year. 2.03 trillion sticks were sold, up by 3.9 per cent on 2005 and more than 30 percent of
global cigarette sales [. . . .] Between January and June 2007, China’s tobacco industry registered more than RMB 200 billion (US$ 27 billion) in pre-tax profits, up by 26 per cent on the 2006 figure.
Tobacco Journal International 7 January 2008
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Distributors, Consumers and your Brand
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To succeed in China, your brand requires a localized knowledge, social prominence, and a visible and successful brand ambassador. The China market is rich in potential, but poor in education, which
is why Casa de Tabaco focuses on the end-distributors. These are the people who can promote your brand in their local region, driving your sales and fostering the education and awareness needed to turn
a transitory fad into a lasting and important part of Chinese tobacco culture.
They can do this very simply because of the regional nature of China, many brands which have regional market dominance are unknown outside that region. There are few truly national media outlets,
and most consumer awareness starts at the grass-roots level, between the retailer and his consumers. Educate the retailer, develop good relationships, and he will sell your brand far more effectively
than any advertising campaign. Chinese consumers may have no idea about foreign tobacco brands, but will purchase and experiment if they are recommended by a friend.
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Media Partners
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