Countries around the world have indeed shied away from its isolationist tendencies and have embraced wholeheartedly the precepts of globalization, China is not a stranger to this phenomenon. With over a billion people, it has somehow developed into a lucrative market for investment. Owing to its potential, China is considered as the largest beer market in the world.
Breweries worldwide are vying to be part of this huge market, and Molson Coors is in a position to be a major player. But caution is expressed because China is a complex market and product demand would vary from region to region. So if the desire of Molson Coors is to saturate the market at a nationwide level, then they need to be extra judicious in their marketing thrusts.
Part of the government’s protectionist measures is to allow foreign investors to have a manufacturing and marketing agreement with a local counterpart. In so doing, products could reach consumers at all levels of Chinese society. In line with this policy, Molson Coors in August 2001 formed the subsidiary – Coors Beer Beverages (Suzhou) Co., Ltd., the purpose is to distribute Coors Beer products into China. A brewing agreement has also been linked with Lion Nathan Beer and Beverages (Suzhou) Co. Ltd. in October 2001.
As in all potential markets, there will always be threats as interested investors and companies jockey for position and share in the manufacturing and beer distribution business. And since the market is still young and so huge, there will always be room for everybody. Depending on each company’s strategy, the one that can provide consumers the most value for their money will get the lion’s share of the market.
Competition has started to manifest its ugly head as major players in the beer market are now poised to increase its market share. Recently though more breweries are coming into China (50 are reported recently). This is in addition to Budweiser, the current market leader; Carlsberg; Anheuser-Busch’s; SABMiller; Harbin Brewery and Scottish & Newcastle.
Even with the frantic activity now experienced in China, the local beer market remains to be controlled by domestic players. This makes it a fragmented market and totally needs an infusion of massive international capital which could come in the form of joint venture agreements. As a form of encouragement, China’s per capita beer consumption remains to be low – meaning the market has still so much room for development.
“Bear in China 2006 A Market Analysis.” Research and Markets. December 2006. Research and Markets. 24 February 2008. <http://www.researchandmarkets.com/reportinfo.asp?report_id=363785>.
“China’s Beer Market: Still Room for Investment.” AP-Foodtechnology. 6 August 2004. Decision News Media SAS. 24 February 2008. <http://www.ap-foodtechnology.com/news/ng.asp?id=54049-china-s-beer>.
“SABMiller ‘top China beer seller.’”BBC News UK. 6 October 2006. BBC. 24 February 2008. <http://news.bbc.co.uk/2/hi/business/5414688.stm >.
Edgar Online Inc. 11 March 2005. Edgar Online, Inc. 24 February 2008. <http://sec.edgar-online.com/2005/03/11/0001047469-05-006237/Section2.asp>.
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