China Crisis?

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China Crisis?

Postby Simplicio » Mon Mar 20, 2006 11:50 am

I couldn't help noticing the editorial in the most recent issue (#54) of Whisky Magazine (A China Crisis?), and it seems to me that the image of the China bogeyman is being raised yet again; This time it is the imagined giant slurping sound of the Asian hordes drinking all of "our" whisky!

People like to talk about 1.3 billion Chinese and imagine that this means 1.3 billion capitalists, workers, customers, or whatever happens to suit one's fears or imagination.

But I would like to point out that the vast majority of people here, probably about 70%, live in the countryside and have little exposure to Western markets.

Even the middle classes in the cities are far from being able to consume Western products, not simply through lack of income, but also taste and exposure. There is indeed a growing class of very rich here, but there is no guarantee that they will become interested in this or that particular western product among the many available.

Coffee, for instance, is simply not something that is going to be very popular here, unless the tastes of people here change enormously. And it is still too expensive - the cheapest cup of coffee at Starbucks runs around 20 yuan, which is roughly equivalent to around $10 in purchasing power over here. Thus the potential numbers of consumers here are really far less than is usually imagined.

Cognac is luxury drink of choice here; even small corner shops will have at least a bottle of Henessey V.S.O.P, even though they mightn't stock any other Western liquor. But I haven't heard anything about a Cognac shortage.

Icewine is also starting to become popular. Is there a shortage of icewine now in the west?

In general, drinking habits are different here. People (read men; it is generally considered unfeminine for women to drink) don't drink to savour, but to get collectively drunk as quickly as possible at dinners and
banquets. As for Cognac, I get the feeling that it is generally bought to impress others, and tends to sit on the shelf rather than be drunk. So drinking habits themselves would have to change somewhat, before single malt becomes purchaced in large quantities.

And the populations of the large cities such as Beijing, Shanghai, and Guangzhou, where people are most likely to have had some exposure to western products and have large incomes as well, really make up far less of the percentage of total population than is the case in most Western countires. China is by and large still a rural country. As well, the cited population figures for these cities (13 million for Shanghai, for instance) are in fact misleading as they include large areas of countryside. Most large Chinese cities are part of a far larger municipality which carries the same name as the city, but is largely rural.

But what of the possibility that consumers in China could develop a weird fixation with this or that particular brand, as the editorial suggests, and hence lead to shortages or changes of some kind or another (the Cardhu case must surely have been on Mr. Roskrow's mind here)? I think it isn't likely to happen unless the producer has a hand in this, due to the fact that people in this country are only beginning to be exposed to such products, and really lack the knowledge to make informed decisions, and as typical of many nouveaux riches, are more interested in image than in content, and hence are very suceptible to marketing, reputation and trends. And since producers generally want to sell as much of their product as possible, I doubt that companies would deliberately want to permantely exclude any market if the demand exists. Thus any shortages might be temporary.

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Postby greengene13 » Tue Mar 21, 2006 4:31 am

"Icewine is also starting to become popular. Is there a shortage of icewine now in the west? "

Canadian Icewine is very popular in Japan. However, if price is important to the Chinese consumer then perhaps there is a limited market in China as well. 375ml bottles cost about C$45. And the supply is limited. Not only do you need a good growing season but you also need a good freeze. There have been pirates who will push bogus wine in Asia. They may be supplying the growing popularity in China.

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