China is a priority target for global drinks brands, distributors and importers due to the revenue potential of its immense population. But what about its on trade industry? Speak Low in Shanghai is currently the only bar in mainland China in the list of The World’s 50 Best Bars, but is this likely to change in the near future? Christopher Lowder, general manager at Proof & Company, recently moved to Shanghai and he gives Drinks International his insight into China’s bar and spirits industry.  

In what ways is the Chinese bar industry changing?

The Chinese bar industry is changing in all ways at once. With many cities opening one or more cocktail bars per week on average for the last several years, there is truly breakneck growth in China's bar industry. Originally, these bars were designed and operated in heavy reference to international flagships like PDT, Angel's Share, or their Japanese Ginza counterparts. But over the last few years of rapid expansion, China's bar scene has grown in every direction at once, blending elements of artisan coffee culture, nightclubs, lounges and social clubs into all possible permutations. 

All this free-wheeling expansion has also merged with Chinese cell phone technology, which is much more advanced than what we have in the US or Europe. The result has been a new wave of cocktail bars that is no longer immediately recognisable to the West, sort of like a different species that has grown in the deep ocean or the dark side of the moon. Bright and photogenic, these bars are built around moments of mobile-first lifestyle design. Professionally photographed cocktails are beautifully featured on digital menus accessible via your phone's payment app. Groups of excited young Chinese consumers can browse through vivid menus, being prompted to try new drinks based on last week's selections, scrolling until they find just the right drink for them, then clicking and paying immediately with their phones and earning points onto their cocktail bar membership card. 

Vacuum-clear ice, fresh juice, and even a whole menu of garnish can be cheaply ordered by the bar via similar B2B mobile apps, all with hour delivery so bar prep can be handled from your cell phone within the afternoon of service. China has created a whole ecosystem to support this breakneck cocktail bar expansion, ensuring that the growth can continue sustainably moving forward. It's an amazing time.

Which cities are leading these changes?

Everywhere is changing at once. Shanghai, Beijing, Shenzhen and Chengdu are each the champions of their own respective quadrant of the country, all with a different focus. Shanghai is China's glitzy lifestyle capital with a heavy focus on high-quality, photogenic, beautifully prepared F&B with no expense spared. Taco Bell has a cocktail bar here (Shanghai). Even Red Lobster had to turn fancy before opening a Shanghai outlet. Beijing is king of lounges and community-driven bars. The city has terrible traffic and gets extremely cold in the winter, and so Beijingers have a tendency to find a bar they like and camp there early and often en masse. 

Chengdu is China's nightclub capital, with scouts making frequent trips to Vegas and Dubai to study lighting and sound design. Check out Sichuan for the high energy and gravity-free lifestyle. Shenzhen is easily China's fastest-expanding city, and that applies to cocktails as well. By my count, Shenzhen has opened one serious cocktail bar every five days for the last 2-3 years. Due to its proximity to Hong Kong, the drinks in Shenzhen tend to be the most European/American. Much more straightforward, higher volume and fast-paced, Shenzhen is China's Silicon Valley, and so drinkers in this city start early in the day and don't mind spending the night bar-hopping with friends, snacking on low-abv cocktails as they go.

Do you think China could become a leading destination for global bar culture?

Yes and no. It is certainly true that China is currently the most exciting country in the world for cocktail industry growth and future potential. It's amazing to take it all in. Google, Facebook, Instagram, and most western websites are all blocked, so most of what happens in China stays in China, confined to China's insulated internet servers. This makes outward PR a challenge. Perhaps due to that lack of global interaction, China's bar scene has grown in a way that solely caters to a local audience; if you don't have the Chinese apps and Chinese language skill to download and navigate China's app infrastructure, it's near impossible to find and participate in China's newest and most-exciting bars. 

The best bars in China right now don’t advertise or write about themselves in English at all. As a result, the most internationally famous bars in China aren't necessarily the country's best, but are just the ones that comfortably cater themselves to a western audience. China's more cutting-edge bars, meanwhile, are content to be unknown to the broader global cocktail community.

How has the distribution of international spirits brands changed?

The importation and distribution of craft spirits brands into China has followed the same track that we have seen in most emerging cocktail markets. That is to say that they were originally brought in by smaller companies charging a higher price for smaller volumes of independent products. As a result, the market became saturated by lower price and lower quality big-brand alternatives. Major brand house-pour contracts brought with them house pour deals that coerced bars into plastering brand logos and POSM all over their venues, ushering in an era of low-quality cocktails with little real differentiation between bars. 

Now that Chinese consumers and bars are becoming more savvy, they are demanding higher quality independent spirit alternatives but will not make this trade if it means paying an unfair premium in cost. As a result, we do see a growing group of spirits distributors that are bringing in the products that China wants for prices that it can accept. At the same time, though, there is a budding rise in China of locally produced craft spirits such as the delicious Peddler's Gin. We will have to wait and see how these three spirits brand categories, and the Chinese market, adjust to accommodate one another.

Is there further scope for bigger distribution deals in China?

In China, perhaps more than anywhere else in the world, there is always a bigger fish. Even with all the business that all international spirits importers are doing in China, we collectively don't amount for even 3% of China's overall spirits consumption. The future is going to be a wild ride.

Do you have any predictions for the future of either industry in China?

China will continue to develop in all directions at once, leading to new forms of cocktail experiences that we can't yet imagine or understand. Already, China is ahead of the rest of the world in many segments in the cocktail market, especially in spaces where cocktails interface with the consumer market. 

RTD cocktail delivery kits with vacuum-sealed garnish packs and perfect ice, ordered from your phone and sent to your apartment in 40 minutes or less? That's already here. Order your favorite Spritz from Starbucks via phone app to pick up on your way to the park? Already happening. Scan a code on your bar table and navigate a fully photographed menu with Amazon.com-style upsell suggestions and cocktail user reviews, and then split the bill with your friends and pay with your thumb print? Done and dusted. Robot kiosks in the shopping mall that mix and shake cocktails for you that you order on an app so that you can sip while you shop? Also happening in China already. 

I went to a bar last week that hires all its music performers on full-time contracts and then writes music for the bands to play and sells the music to feature on commercials so that they make royalties. Is that a bar? Is it a record label? Something else? Whatever it is, there are now seven of them across Shanghai and more franchising into surrounding cities. I think the big point here is that whatever China does next is totally unknown to anyone outside of China, especially when it comes to commercial innovations in making cocktails more broadly approachable to a wider consumer audience, or in bringing cocktails into more diverse consumer contexts. 

Movie theaters, shopping malls, subway stations, your home - China is doing it all, and more importantly is not sacrificing on quality when bringing cocktails into any of these new environments. The winner of China's cocktail revolution isn't going to be the bar that succeeds in making the best cocktail. It's going to be the bar that successfully brings cocktails to a billion new drinkers.