---
title: "Tsingtao Brewery Li Xuran: Product Innovation in the Context of Personalized Consumption"
description: "This article is a transcript of Mr. Li Xuran's presentation on \"Product Innovation in the Context of Personalized Consumption\" at the FDIC 2018 China FMCG Digital Innovation Conference, edited by New Distribution. He discusses macro trends, consumer shifts, and Tsingtao's product innovation strategies including customization services and new beer categories."
author: "李续冉"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-09-06"
language: "en"
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# Tsingtao Brewery Li Xuran: Product Innovation in the Context of Personalized Consumption

> This article is a transcript of Mr. Li Xuran's presentation on "Product Innovation in the Context of Personalized Consumption" at the FDIC 2018 China FMCG Digital Innovation Conference, edited by New Distribution. He discusses macro trends, consumer shifts, and Tsingtao's product innovation strategies including customization services and new beer categories.

This article is a transcript of Mr. Li Xuran's presentation on "Product Innovation in the Context of Personalized Consumption" at the FDIC 2018 China FMCG Digital Innovation Conference, edited by New Distribution.
Today, my topic is "Product Innovation in the Context of Personalized Consumption." Ultimately, in the channel module, we must first have products. In the first part, we look at the overall macro trends, macro environment, industry, and consumer demand changes. So, from the first slide, there are four tables showing that from 2017 through the first half of 2018, China's economy has entered a new stage of high-quality development. Macroeconomics is very important; a 0.1% change can translate into multiple times the benefit for enterprises and industries.
With the economic recovery, we are pleased to see that the growth rate of FMCG nationwide is rising, and the growth rate of beer is far faster than the overall FMCG growth rate. This is a positive sign for the beer industry. It also helps support our efforts in product upgrades and structural adjustments to provide consumers with truly good products.
As everyone knows, the beer industry entered a four-year decline in 2014, and in 2018, the decline ended. With the recovery, the beer industry is stabilizing and will show a fluctuating adjustment trend in the future. As beer stabilizes, we can provide consumers with more valuable and effective experiences, so opportunities for revenue, profit, and growth are emerging. This is the greatest technology for us to provide better products.
From the consumer-driven perspective, I believe everyone will find the three charts insightful. When we were young, beer was bitter and a functional consumption. In the past decade, the top five brands' concentration reached 70% to 80%. But now, with imported beers and craft beers, consumers demand personalization, diversity, and experiential value. Especially in first-tier cities like Beijing, Shanghai, and Chengdu, more and more imported beer and craft beer bars are appearing, and people enjoy going in for a drink. Now is the era of consumer sovereignty, and changes in beer demand are the ultimate core driver. From the penetration of imported beers, the choices of craft beer consumers, and the acceleration of fresh beer and beer in plastic bags, the upgrade is evident. Looking at the industry upgrade, the main battlefield is clear: the mid-to-high price range of 8-10 yuan and the high-end price range above 14 yuan.
From four aspects of cognition, the value of the entire beer category is recognized. Furthermore, under the leadership and promotion of craft beer, the category value is being subverted. Tsingtao Brewery is a 115-year-old brand with a brand value of over 140 billion yuan, but we also need to change our values. The future frontier consumers' demand for beer value will be composed of product, brand, experience, and culture, reflecting three core characteristics: social value, class value, and personal value. I believe everyone drinks beer, so you can think about it and compare your own cognition.
Current and future new consumer demands will focus on small but beautiful and small but specialized brands. They need not only value but also values, including personalized customization to provide partners with more exciting products and better satisfy consumer needs. That is Tsingtao Brewery.
Based on the above analysis, I can share with you Tsingtao's product implementation, product cultivation, product cognition, and what we are actually doing. We look forward to more exchanges and sharing opportunities with relevant partners, users, and consumers.
Tsingtao Brewery customizes for you, empowers enterprises, and achieves win-win cooperation with partners. This is the brand value of Tsingtao Brewery with over 140 years of history. Tsingtao is now developing three sets of customization: 1. Enterprise customization, which is very mature for enterprises and social organizations, mainly used for internal entertainment and customer gifts. 2. Channel customization, for cross-border cooperation with emerging and special channels. We will show you the products we have made later. 3. Private customization, which is now in the testing phase, with the preferred scenarios being weddings and parties.
This is our latest order: a high-end product co-developed with Vanke, with joint customization and joint promotion, which will bring greater empowerment value to the enterprise. For cross-border cooperation in emerging channels, we have cooperated with NetEase Yanxuan, and with KFC, Pizza Hut, and Zhou Hei Ya, we are jointly developing products for win-win cooperation. The private customization service is now in the testing phase and is expected to go online around the end of the year. As long as you like it, as long as you have needs, we can satisfy them.
The standard for enterprise customization starts at 5,000 cases, and for canned products, it starts at 10,000 cans. For example, we have done projects with Sunac, Copton, Vanke, and Zhou Hei Ya. Yesterday, we made a "Da Qi" (Cheer Up) product with Mr. Chen to empower and cooperate with Zhou Hei Ya. We also customized a product exclusively for Shangri-La, which is sold in over 40 Shangri-La hotels. In the future, we will provide private customization, with a minimum of 15 cases, and a customization cycle of as fast as 15 days or as slow as one month. These are the changes we have made in personalized scenarios and the product adjustments to empower enterprises and partners.
Let me talk about white beer. This morning, everyone watched the promotional video for white beer. The white beer category has the most potential to become the second largest beer category after pure draft beer. Beer fermentation methods are divided into two types: top fermentation (yeast on top) and bottom fermentation (yeast on bottom). Top-fermented beers include wheat beer (the largest volume) and IPA. Why is wheat beer the second largest beer category after pure draft? Now, as people's understanding of beer deepens, and their understanding of whole wheat deepens, there is no need to add adjuncts like rice or syrup; the ultimate research is on whole wheat. In fact, beer categories are mature abroad, but in China, they are still in the cognition stage.
Our whole wheat white beer's slogan is "Different from the first sip." According to incomplete statistics, it has become the largest single product in the country. We can provide suggestions on product selection and identification. This is our segmentation of products based on different channels and scenarios. On August 11 this year, we solemnly announced in Qingdao that we aim to build the "No.1 brand of Chinese white beer." I believe many customers and distributors here should make good product choices and seize the trend. The era of industrialized beer, which added adjuncts, starch, and syrup for large-scale growth in the past decade, is over. Returning to the true nature of beer is whole wheat fermentation.
The second product is Pilsner, a whole wheat category known as golden beer. People's pursuit of fresh beer is increasing, so Tsingtao's original beer is our largest single product. With current internet and cold chain channels, we can guarantee that the beer you drink is brewed the same day. Now we bring you different product categories for different consumption scenarios, available in 5L, 1L, and 3L sizes. IPA is the king of craft beers, the top product, with extraordinary appearance, craftsmanship, and taste.
Tsingtao 0.00 is a completely non-alcoholic beer. With more and more driving scenarios, many so-called non-alcoholic beers on the market can still be detected. But our product is a truly original lemon-flavored beer-flavored non-alcoholic beverage. Why do we talk about so many products? On one hand, to provide users and channel partners with product choices; more importantly, to bring consumers different experiences in different scenarios.
We are now developing a 3L barrel that can be placed in the refrigerator, called the 3L portable barrel beer. Based on consumer needs, as a century-old brand, Tsingtao is making more and more exciting products to provide users with more needs and create more consumer scenarios. Product is the first priority, and product leadership is an absolute rule. There are many consensus points for cooperation worth discussing.
Tsingtao Brewery is a company that creates happiness. I hope this simple sharing brings you joy and happiness. I hope everyone has needs for exchange, sharing, and win-win cooperation. Thank you!
Click "Read the original" to see more highlights of the 2018 FDIC China FMCG Digital Innovation Conference...
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