As all Cognac enthusiasts are most probably aware of, the market for eaux-de-vie in China is booming. In fact, between the years of 2009-2010, the market growth for exports to this region grew by an incredible 71 per cent. I was lucky enough to experience quite a real chinese Yam-Sing experience in Monaco – these people love cognac.
By the way, did you know? We have a Chinese version of the blog
And whilst China lies in third place (behind the US and Singapore) in terms of volume of imports, the difference is that their penchant is for the older Cognacs – in other words, well aged XO Cognacs. In terms of value, China is already the number 1. Compared to other cultures, Chinese perception on quality correlates strongly with high prices – much more than other nations, neighbour Taiwan already has a very different consumer behavior when it comes to high prices.
One of the prime times, and one that accounts for 30 per cent of all Cognac imports, is the Chinese New Year. And this gives the Cognac houses great scope for innovation in both packaging and communication of their brands.
The four major brands that are enjoyed by the Chinese are Hennessy, Martell, Remy Martin and Camus. (It’s interesting that Courvoisier doesn’t make it into the top four list but the simply do not seem to focus on China that much). So what is it that these producers have managed to tap into to be so attractive to the Chinese psyche?
Well, first of all they know the market, and continue to invest into discovering the wants and ideals of their target audience. In China, there are three important groups who are the major purchasers of Cognac. These are:
The Fuerdai – The 18-25 year old market. This group purchases Cognac to show that they’re members of the international higher social classes.
The Baofahu – Nouveau riche who use Cognac to gain social status.
The Connoisseur – The 49 plus age range drink Cognac simply because they love the taste.Hennessy focus on the glamour aspect of the drink. Using communication and partnership with such mediums as the pop world. For instance, Hennessy organised the ‘Artistry Awards,’ a TV reality show that created a new boy band. The show was a tremendous success for the Cognac brand, and now there’s a website totally dedicated to the Hennessy Artistry series.
Martell made the decision in 2005 to go upmarket with its Cognacs, intending to make Martell Cordon Bleu the flagship of the brand in China. Advertising campaigns and displays in Chinese airports helped with this, and one that’s proved extremely successful for Martell.
Another strategy was to introduce Martell Noblige – a Cognac that appeals to entrepreneurs and successful businessmen. In 2006, the house introduced a campaign called ‘Martell; Only a Few Can Tell,’ that was intended to strengthen the relationship between the brand and its consumers.
Another wise move was to create a ‘Martell Business Club.’ After all, how better to appeal to their target market than to have a club of exclusivity… The first club was opened in Shanghai, and members have privileges such as being able to order Martell Cognacs not available on the Chinese domestic market.
Other advantages include members receiving a gift on their birthday, as well as invitations to private parties and tastings. It’s obviously working, as 44 per cent of members purchase more than two bottles of Martell Cognac per month.
Remy Martin is the king of distribution, with their brand to be found in fashionable restaurants, bars and KTV – all places that are ideal to target the three different Cognac drinking markets.
They’ve also cleverly associated the brand with many well-known Chinese chefs by running creative promotions around food and Cognac. The brand has also worked hard to increase its already plentiful point of sale displays in hotels, supermarkets and bars.
And because packaging is so important to the Chinese, with the bottle itself being considered a sign of wealth, Remy Martin has produced many beautiful and ingenious ways of presenting its Cognac.
And let’s not forget the person who Remy Martin have chosen as their brand ambassador in China; Jolin Tsai. A well known Taiwanese actress and singer, she is a perfect fit for both the Chinese and Western market. By designing a red bottle emblazoned with tributes to Ms Tsai, this is a bottle that appeals to wealthy, female consumers.
Camus has been quite clever with their marketing. They didn’t want to have Chinese characters on the packaging of their regular Cognacs, so as to maintain their status as a worldwide brand. So instead, they came up with an emblem known by the Chinese as ‘the golden flower.” Interesting to see that Camus is also very active on the biggest Chinese social network Sina Weibo.
But in addition to this, Camus have co-branded with a premium tobacco brand – Chunghua. And in partnership with them, have created a totally new brand specifically for the Chinese market – a red and gold packaged XO Cognac known as XO Chunghua. By the way, Camus even has a coffee brand that is marketed in China.
Sources: BNIC, Financial Times, IWBS, marketingtochina.com