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Changing, Changing Chinese Wine Market

Posted: Wednesday, 16 May 2012 11:33

Changing, Changing Chinese Wine Market

The mainland Chinese wine market has been growing fast with the imports rising from 2009 of 10.1 million 9 liter-cases of bottled wine to about 16.3 million cases in 2010, continuing to escalate to 23 million cases last year writes Beijing based educationist and writer, Fongyee Walker who cautions that the diversity of Chinese market presents many challenges.

It is easy to note that the import market is still relatively small, it is growing quickly, but the nature of growth in China is also changing. Firstly, the ratio of domestic to imported wine in mainland China now runs at 85% vs. 15% respectively, showing a swing towards international wines. Moreover, there is a growing awareness of different wine producing countries and different styles of wine, particularly in the coastal cities and the 1st tier cities (Beijing, Shanghai, Guangzhou, etc.), with more imports coming from a more diverse array of origin and wine styles.

However, it must also be kept in mind that many more areas are still in the beginning stages of any degree of knowledgeable consumption. In other words, it is not the ‘Chinese Wine Market’ which is growing, but rather the Chinese wine markets and each of these markets differs in type and amount of consumption.

The challenges of entering this diversity of markets, presents many difficulties for the would-be importing winery. There is often a lack of international awareness as to changing Chinese consumer preferences, not to mention an overall lack of awareness of the growing complexity of the consumers within the country, who are amongst the most changing and dynamic wine consumers in the world. Consumer segmentation is increasingly diverse with increasingly informed buyers being more and more aware of international wine prices and opinions.

The Consumption Mystery

Once the wine is in China, though, where it ends up can be as big a mystery as the end consumer. There is still a lot of wine coming into Chinese which is not sold at all in what many wineries would view as traditional ways (i.e. on-trade, off-trade, supermarkets, etc..) but are purchased –sometimes in huge amounts - to be gifted directly or which are wines which just ‘disappears’ (often into entertainment) without a trace.

Thus many producers who wish to move into China should be aware of over-inflated accounts of how much wine is sold in China: a high proportion of wines still move through such non-traditional channels such as gifting, one-off private importation, etc… thus, the numbers cannot be directly equated to the disbursement that they would see in developed markets.

Added to this, the state of mainland Chinese wine import business has also changed a lot with the emergence of large Chinese drinks companies creating their own import departments, such as COFCO, the state-owned agricultural arm, which now imports many famous wine brands such as Pommery. Of course, although massive in size, these companies often lack good knowledge of wine or relevant brand-building experience but, with their contacts, they can move large volumes.

Wine import companies formed in the 1990s and early 2000s are thus coming under increasing pressure from these Chinese drinks companies and are looking to compete by building ever-expanding distribution relationships across China’s 2nd and 3rd tier cities. Moreover, the smaller, more specialist importers are trying to differentiate themselves from the big players on the grounds of greater in-depth wine knowledge.

Mainland China requires patience, vigour and dedication in terms of building brands in the wine import sector along with a willingness to engage in active research (and that does not include simply reading the articles of reporters who just visit Beijing and Shanghai and who come away with an overly simplistic view of wine in China). It also requires a healthy degree of skepticism and an ability to understand and deal with a market where many of the trade are new to wine and inexperienced with its complexities.

Fongyee Walker

Beijing-based Fongyee Walker is an independent wine consultant who also provides education services. She is a Member of the Institute of Wines & Spirits and is also mainland China’s only MW exam candidate, having passed her theory paper. Walker has been Captain of the Cambridge University Blind Wine Tasting Team and led them to victory as well as winning ‘Best Blind Taster’ in the Oxford-Cambridge wine tasting match. She also designs special trade-targeted wine courses in Mandarin for several trade bodies. She has written articles for Decanter, The World of Fine Wine, Hong Kong Tatler, Drink Magazine (Shanghai), The Beijinger, Caijing Ribao, Wine Review and Fine Wine & Liquor (China). Walker has also been a judge at numerous wine competitions.


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