An Average US Brand in the China Market – The Budweiser Story
- Jul 24, 2010
When you think of brand names that represent traditional America to the consumer, I immediately think of Levi’s, Harley-Davidson and Budweiser. How do American brands do in China?
The story of Budweiser in China is fascinating. In 2003, China past the US in total beer volume –which means China is the largest in the world in terms of production volume. China official estimates put the average per capita beer consumption at 5.19 liters(1.4 Gallons) but beer production increased to 43 billion litres in 2009 that translates to a whopping 33 liters( 8.7 gallons) per person.
Enviable position in the Market
In China, the world’s biggest beer market, Anheiser-Busch InBev(A-B InBev) occupies an enviable position. In terms of brand share, Anheiser-Busch InBev is 4th in China. Basically the 2nd, 3rd and 4th spots are separated by only 1.4% (6.1% to 4.7%), so there is plenty of room to play for A-B InBev. In terms of volume, A-B InBev is 3rd in the market where the top 4 in China represent about 54%.
Positioned for Success and Marketed for the Successful
So how does A-B InBev produce and market US beer in the Chinese market? With the strategic investment in Harbin in 2004, A-B InBev has positioned 14 of 15 breweries outside of the US in China-production capacity is not a problem. Getting the beer to the people is not a problem either. By 2012, A-B InBev will provide distribution to 200 cities in China doubling that from 2007 levels.
After looking at a variety of videos and web pages, one part of the brand marketing strategy for A-B InBev in China is much different than the US – appeal to the young and upwardly mobile Chinese. This demographic is more digital savvy, travels often and in the upper end of the median in wealth. Budweiser sells at a price about eight times higher than that of local Chinese beers. There is a video ad that supports the sophistication of the product showing a professional man in a suit coming home and having his significant other bring a Budweiser to him on the penthouse deck.
The US part of the marketing is almost identical. A-B InBev markets athletic, pretty women which appeals to the young male beer consumer. The A-B InBev 2010 FIFA campaign in China was the Bud Babe Campaign where each contestant participated in a talent and beauty competition. A-B InBev also introduced state-of-the-art interactive voice response technology through the phone which allowed fans access to each candidate and to cast votes for each one. The winner becomes the spokesperson for Budwieser China.
The Budweiser Ants are Popular in China Too!
Every one knows of the Budweiser Ants. Well, China has fallen in love with them also. The ants and Budweiser is almost synonymous with Chinese New Year. Each year Budweiser puts together a unique video campaign for Chinese New Year. “The ideas should not only be humorous and impressive, but also reflect the international king of beers brand image of Budweiser. The ants will overcome all kinds of challenges by showing their intelligence, courage, teamwork, spirit and solidarity,” a spokesperson said.
For an average US brand, Budweiser has shown it can play competitively in the Chinese market. For those hot China summers, wouldn’t you crave for the King of Beers?