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Pernod Ricard eyes opportunities in China’s ‘dual circulation’ strategy

Release time: 2021-06-29 16:22        Source: Global Times

Pernod Ricard China at the 1st CICPE Photo: Courtesy of Pernod Ricard

Pernod Ricard China at the 1st CICPE Photo: Courtesy of Pernod Ricard



As China is pushing a "dual circulation" development paradigm to deepen its domestic market, French wine and spirits group Pernod Ricard China showcased at the first China International Consumer Products Expo (CICPE) its goal of seizing new opportunities arising from the policy to meet the growing diversified needs of Chinese consumers and fulfill its long-term commitment to the China market.

To satisfy increasingly diversified consumer needs for a variety of imported wine and spirits in the Chinese market, Pernod Ricard China showed as many as 92 products from its wine and spirits brands - the most products that Pernod Ricard China has ever brought to an expo.

"We are proposing a lot of new products [in the Chinese market] in order to answer the first part of the dual circulation, which is to increase the local consumption of Chinese consumers," Jean-Etienne Gourgues, Managing Director of Pernod Ricard China, told the Global Times on Friday at the CICPE, held in South China's Hainan Province.

"We are mostly dedicated to this element, bringing new products, new brands, creating new experiences to enhance the consumption of Chinese consumers," he said.

Thanks to the strong resilience and vitality of China's consumer market, the company has posted a large recovery in the market since July 2020, recording 34 percent year-on-year sales growth during the first 9 months of fiscal 2021, data from the company showed. Martell cognac, different brands of single malt whisky portfolio, and Absolut Vodka have also enjoyed the fast growth.

The country's booming e-commerce and livestreaming sector amid the pandemic also contributed to the company's rapid sales recovery.

"The first one [of the change] is that it enables us to reach much more consumers, especially in third-tier and fourth-tier cities that we would have never reached before," Gourgues said. He added that the interactive way to present the product by livestreaming also helps recruit young consumers in order to attract them to Pernod Ricard China brands.

China is a market of huge potential given the small market share of imported wine and spirits, according to Gourgues. "Imported spirits is only today 1.5 percent. But it was 1 percent five years ago, so it's growing pretty rapidly. There is a lot of appetite for Chinese consumers for the drinking culture," he said, pointing to the opening of more cocktail bars and whisky bars, as well as the booming e-commerce industry.

Pernod Ricard China is opening more brick-and-mortar retail stores as a third direction of its investment to better integrate online and offline sales. For instance, for Martell, it opened one store in Shenzhen, South China's Guangdong last year, and opened one more this year in Haitang bay in Sanya. It also opened whisky stores in South and Southeast China cities.

Stronger presence in China

Apart from introducing more brands to meet Chinese consumers' diversified needs, Pernod Ricard China is also building a distillery of single malt whisky in Southwest China's Sichuan Province and launching the brand of the distillery by investing 1 billion yuan in 10 years. It showcases the company's long-term commitment in the market, Gourgues said, noting that the construction of the Free Trade Port reaffirms the company's confidence in China.

Since entering the Chinese market more than 30 years ago, Pernod Ricard has kept a close watch on the developments and opportunities in Hainan, and has also invested in Hainan.

As China continues to push forward with the construction of the Hainan Free Trade Port, Hainan's advantage in terms of its location and policies is becoming increasingly prominent, the firm told the Global Times. Hainan is well-poised to serve both the domestic market as well as broader international consumers, and its business environment is constantly being optimized.

As a major move to further explore the Hainan market, Pernod Ricard opened the Martell Travel Retail Boutique at the CDF Mall in Haitang Bay, Sanya. Pernod Ricard China said that it will continue to step up its presence in Hainan, encouraging more consumers to get to know its brands and the unique value of its products.

"Pernod Ricard China is very confident of Hainan becoming an international tourism consumption center, and Hainan will be one of the key areas for our future development," said Gourgues.

Sustainable development

Pernod Ricard China will continue to follow its 'Créateurs de Convivialité' concept to enable Chinese consumers to enjoy more convivial moments and help empower a sustainable future for China, he said.

Maintaining strong confidence in the business potential of the Chinese market, the company also reiterated its commitment to contributing to China's sustainable development. In addition to its carbon neutral new office, the construction materials of the company's booth at the expo are recyclable, meeting environmental standards, and all the tasting cups and straws are made from biodegradable materials.

According to Gourgues, while sustainable development is not a new topic, Pernod Ricard China is still hoping to further promote public awareness of the eco-friendly concept in China by actively working with local authorities and partners, including the Center for Environmental Education and Communications of the Ministry of Ecology and Environment, and the Institute for Sustainable Development Goals, Tsinghua University.



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