The allure of overseas origins remains attractive with many Chinese consumers and there are some great case studies of foreign brands backing that up with a smart marketing strategy, yet domestic players still manage a 38% premium per litre for online sales. This is due to slicker marketing and usually a better understanding of the market overall. A recent survey of business in Australia confirmed that exporters are increasingly experiencing that domestic Chinese brands are seen as more of a source of competition than foreign brands - 50.7% versus 49.1%. Domestic brands are also much more likely to have stronger distribution networks and more of an appetite for lower tier cities, which are the fastest growing markets in China. Of the 50 million new households that are expected to enter China's middle and upper classes between 2016-2020, half of them are likely to be located outside of China's top-100 cities according to a BCG-Alibaba study.
*) China Skinny 2 May 2018