The soda market in China is Huge because the Chinese Population is becoming Rich and consuming more and more Western Products. Coca-Cola is making a lot of money in China, but in this market, you have a place for a new Brand that can challenge the big Massive Brand.
Even if China is the hometown of tea, the market for soda is increasing rapidly. In the future, soft drinks may become one of the biggest industries in the country thanks to the rapid growth of this market. In 2001, China joined the World Trade Organization making access to the Chinese market easier for international soda brands. The best example of success in the soda market is Coca-Cola, the brand that entered China in the 1920s and it still maintains its leadership in the country’s soft drink market.
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Data on the soft drink market in China 2020
- According to a survey, Sprite, Pepsi, and Coca-Cola are the most popular soda.
- Revenue in the Soft Drinks segment in 2020 amounts to US$39330m
- China has one of the biggest bottled water markets in the world, and it is expected to reach 49 million tons of total annual consumption by 2020.
- The market is expected to grow annually by 8.7% (CAGR 2020-2023).
The market of soda in China: a developing trend
Over the past decades, China’s industrialization and urbanization have been in the process of converting a large population to urban dwellers. Due to that, increased regulations economic growth has continued to soar and develop into a market-based economy.
The rising income and disposable income levels, and a constant improvement of living standards of Chinese people have resulted in modernized, busier lifestyles, which is one of the primary drivers of the increase in demand. The large soft drink market in China also has one of the highest growth rates in the world.
+20% Market Increase per Year
Example of Cobranding with Soda Brand & NBA
In the past few years, the Chinese market of soda increased at a rate of 20% every year. This market is divided into two categories: the household market and the catering market. In order to launch your soda brand in China, you first must define which part of the market you want to develop.
There are many opportunities to launch a soda brand in China. Indeed, domestic brands have taken pace in development and have gained some consumer taste and good fame for, the needs of consumers are diversified ensuring the expand the potential of the market, customers are more and more segmented giving companies more chances to realize an effective target marketing. Moreover, the market’s occupation rate of beverages in the different geographical regions of China is not equal, which gives your company more opportunities to develop your brand across the country.
However, you also have to avoid weakness and pay attention to some risks. Indeed, there are too many different brands on the Chinese market, your brand needs to have something special to be differentiated from other soft drinks. Moreover, the life circle of a soft drink is shortened, and the tastes of consumers are changing quickly. Besides, the most important brands have now the monopoly of the soft drink market.
The competition between foreign and local brands
The main foreign soda companies in China are Coca-Cola, Pepsi, and Cadbury; they bring competition for local brands. Even if Chinese soft drinks have some advantages and market power, foreign brands have more acceptance. Chinese soft drink brands generally do not have their own brand culture.
Local Brand invest in their Branding in China and take Market shares to Coca Group
Both foreign and domestic brands play a leading role because they share most of the Chinese soft drink market. Wahaha and Huiyuan compete with foreign companies, such as Coca-Cola, PepsiCo, or Red Bull. These foreign brands and producers are well established in the country. For example, PepsiCo has 8 farms and 6 plants, and it continues investing in Research and Development to suit its Chinese customers.
China’s soft drink industry is in perfect competition because it is not controlled by state-owned capital as in other industries. Market competition is extremely intense, but vast investment opportunities are also embedded.
However, due to the fast increase of the Chinese soft drink market and China’s demand for foreign beverages, foreign producers become dependent on the sales generated in China
Concerning Chinese soft drink brands, the sales model of different types of beverage companies vary greatly. National beverage manufacturers are capable of distributing products both online and offline because they invest considerably in advertising, promotion, and channel establishment. In comparison, regional beverage manufacturers rely on conventional offline channels to save marketing costs.
Adapt to Chinese habits and tastes
Chinese consumers now favor online shopping to buy their soft drinks due to competitive prices and the convenience of home delivery. Therefore, you must adapt your marketing strategy and be present on Chinese websites, such as Taobao.
In order to meet Chinese demand for personalized tastes, many manufacturers launched exotic products with special tastes.
In the future, it is expected that China’s economy will continue to grow, and Chinese residents’ income will continue to increase, promoting the development of the soft drink industry in China.
The Right Strategy to Enter China?
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