Swiss brands on the way to the Chinese dream

After a period of strict controls and restrictions during the COVID-19 pandemic, China has reopened its doors for business. Despite cautious consumers and a gloomy economic climate, some Swiss companies are targeting growth in the Chinese market, the world's second largest.

In 2019, Aurélie Meyer, CEO of Appenzeller Bier, traveled to China to promote his products. The idea to introduce Swiss whisky to the Chinese market was conceived over a glass with colleagues at the upmarket Jiuyin whisky bar in Hangzhou. Today, Säntis, a malt whisky from Appenzeller Bier, is a success in eight bars of the Jiuyin Hotel Group, becoming the first and only Swiss whisky introduced in these establishments.

Despite the small prominence of Swiss beer and whisky in China, companies such as Appenzeller Bier and Läderach are looking to capture their share of the huge Chinese market.

Before the global pandemic, China was an attractive market for business: huge population, high economic growth, growing middle class. But the pandemic has caused changes in consumer behavior and sentiment.

According to a McKinsey report, the Chinese market favors companies that offer high-quality products and have a premium brand. This creates a favorable environment for Swiss brands such as Läderach and Appenzeller Bier, which target affluent consumers.

Despite the expected slowdown in economic growth in China, the companies are not relenting. Appenzeller Bier continues to expand its operations in major cities, introducing its products in restaurants and bars.

Although the beer market in China is the largest in the world and the country is not even in the top 35 in terms of beer consumption per capita, this creates room for growth and development for companies looking to offer high quality and unique products to this market.

Facing competition

Capturing Chinese market share is a challenge even for large European brands such as AB InBev and Carlsberg, which face stiff competition from local producers including China Resources Holdings, owner of Snow Beer and Tsingtao Brewery.

For smaller international players such as Appenzeller Bier, it is difficult to find a place in an already saturated market. The company's expansion strategy therefore calls for "slow but steady" growth.

Aurel Meyer notes: "On the one hand, as a family business we have a long-term approach. On the other hand, we don't have a marketing budget of CHF 10 million to develop the market. Our production capacity is also limited. While we see growth potential in Switzerland, it would be unwise to invest too many resources abroad at the same time."

On the chocolate trail

Läderach is another Swiss company operating in the Chinese market. Founded in 1962, this family-owned brand specializes in luxury chocolate and employs 1 700 people worldwide.

The company started selling its products online in China in 2020 after increasing inquiries from Chinese tourists, and opened its first retail store in Shanghai in 2021.

According to Danny Qi, managing director of Läderach China, China is an important market for the company and consumer preferences are very similar to those in Switzerland.

Although per capita chocolate consumption in China remains lower than in European countries, this market is growing, especially in the high-end chocolate segment.

A future in waiting

After a surprisingly quiet 2023 and China's post-pandemic reopening, companies are keeping a close eye on signs that the country's economic recovery is accelerating.

Aurel Meyer remains confident and is sticking to the mission set for Appelzeller Bier for the next decade. "Our goal is to go to China, stay in a hotel and eat at a restaurant that serves our products. So I can always get a taste of home."