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“ASK JERRY” PERNOD RICARD USES A.I. TO TALK TO CHINESE MILLENIALS

By David Ma

11-6-2018




The Paris listed distiller Pernod Ricard, the world’s third largest wine and spirit company by capitalisation after Moutai and Diageo, is banking on a chatting robot called Jerry to woo Chinese millennials away from the traditional baijiu.

In its 2018 capital market day held earlier in Shenzhen, company chairman and chief executive officer Alexander Richard said the Chinese market presented great growth potential for Pernod Ricard.

However, the major challenge is how to get China’s young consumers to drink western spirits instead of the traditional grain-based spirit baijiu.

Baijiu accounts for about 99 per cent of spirits consumption in China, and 60 per cent of consumption in the premium alcohol segment, according to research by J.P. Morgan.

In contrast, imported spirits account for only around 1 per cent of national consumption. The company hopes the penetration rate will double to 2 per cent by 2025.

China currently accounts for around 9 per cent of Pernod Ricard’s global sales of 9 billion euros (USD 10.5 billion).

The distiller is hoping that a chatting robot called Jerry that appears on Chinese social media WeChat can help win young Chinese consumers.

Sporting a black suit and stylishly trimmed beard, Jerry is a virtual representation of a twenty-something bartender. He can recommend bespoke cocktails to suit unique tastes and will disperse information about events happening in town.

The company did not disclose the number of users of the chatbot, but said 62 per cent of its users thought Jerry was a real person, which partly explains its popularity among Chinese youngsters.

Pernod Ricard has also partnered with Tencent, holding company of WeChat, in areas of content production, brand marketing, and market research.

Currently, Pernod Ricard has roughly 40 per cent market share of premium imported spirits sold in China by volume, placing it ahead of its major rivals.

Richard predicted significant growth in China in the years to come, adding that the company would redirect its sales and marketing efforts by “drilling into lower tier cities”.

The company’s China sales have been picking up in the past year, following slack growth since 2012 amid President Xi’s anti-graft campaign.

Pernod Ricard is a French spirit and wine conglomerate, among its portfolio are famous brands like Absolut Vodka, Martell Cognac, Beefeater Gin and Chivas Regal Whisky.

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