Monday, June 9, 2014

The Business of Booze

300,000 RMB = 50,000 USD spent in the club WTF




Booze is big business in Shanghai - it's not uncommon to see a table with 100 bottles of Dom Perignon competing with the table next to it with 101 bottles of Dom. These are Champagne wars and they're outstanding. But, the booze business is much different here then what I'm used to in the States and because of that, I don't know how I'll ever operate back in the west in regards to F&B. Like, China - it's just bigger. 

To understand the booze business you need to understand the drinking culture here. I think that it's a big trap that a lot of foreign companies fall into when they're looking to move into the China market. Booze companies see the staggering population numbers and feel like it's an untapped market. The truth is, outside of the major international 1st tier cities like Shanghai, Beijing and even Shenzen the market is pretty much non-existent. I read somewhere that 97% of the population only drinks local brands outside of the 1st and 2nd tier cities. Travel outside of Shanghai for two hours to a place like Mogan Shan (莫干山) and you'll see at the clubs the only bottles to be seen are beer. Cheap, local, plentiful and warm. 

Wait, hold up - this isn't a lesson in economics. For a moment I almost did some research. 
Let me change my train of thought. Here's Hooters Shanghai:








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