This article is practical tips to develop your Wine business in China and make your first million RMB of sales. It is not easy… but possible in China.
Let’s see some highlights about the wine market and how to take part in this opportunity.
The Wine Market in China: a Golden Mine in B2C
What does the wine industry represent in China?
- In 2018, Wine importation represented 2.86 billion RMB ($404.4 million)
- Wine represents 49.5% of the total liquor and alcoholic beverage importation
- Imported wine account for around 40% of the Chinese wine market
- Total wine consumption of 1.8 million kiloliters making China the 5th wine consumption market in the world
About consumption habits:
- Wine is now part of people’s daily lives
- Consumers are willing to spend more for better quality wine
- Consumers are more knowledgeable about wine and therefore more selective
- The wine market value rose by 2.1% in 2018 while its volumes fell a bit
About market share:
- France still leads the market, but its share is declining
- Rise of Australian, Chile and Italian wine
New trend: consumers have been expanding their repertories to all types of wines including sparkling wine.
- 46% of wine consumers bought their wine from online stores
- 28% of wine online shoppers spend 400RMB and above in the past 6 months (21% in 2016) source
Further readings about Wine in China
How to Start…. and Then Make Your First Million?
Million of RMB first then USD.
You’ll find many ways to sell your product and make money in China. But many steps will need to be highly considered. Indeed, whether you’ll be choosing a distribution system or an online e-commerce platform, you’ll have to brand your product if aiming to do any sells in China.
Consumers in China mainly care about comments and reviews about your product. You can pretend to be the best wine in the world, but if there isn’t any review or press article talking about it, they’ll consider you just as another brand among others. Nobody lost among thousands of brands.
But luckily for you, here are some tips to follow to help you reach your Chinese opportunity…
Social media in China are VITAL
Weibo is the Chinese twitter. The most popular social media in China, it’s also the favourite platform for KOL. So, if you want to target a large audience and engage with potential customers, having a Weibo account is a must-do.
- Open a certified account
- Communicate with your community
- Advertise your brand through sponsored ads
- Engage your customers (with games and contests for example)
Weibo drives Traffic to Tmall Store because it is the Same Ecosystem.
Baidu: (Google of China)
Having a Chinese website is good, but not enough. They don’t trust companies. If they want to drink a good wine to match their dinner, Chinese people will check for information on Baidu, their Chinese google. Before buying anything, they’ll search for information about the product or the brand. It can be reviews, comments about something specific, forums, or general research to solve a problem they may have such as: “what’s the best wine to please my father-in-law?”
Before purchasing a product, the Chinese will compare different brands and will be influenced by others’ comments and reviews. Here’s how to optimize your online reputation:
- Baidu Zhidao & Zhihu: a good way to deliver information and to get positive feedback from your community
- Forums: it’s important to develop your online presence. The more people talk about you, the better.
- Media: online users have to be able to find information about your product. Whether it’s a press article or any publication on Baidu’s first-page (through strategic keywords).
Wechat (the Chinese Facebook)
Wechat is like Chinese Facebook. Everybody uses it in China. A great messenger APP that also gets a “moment” system allowing people to share content (messages, pictures, videos) and personal feedback. Through this app, people use “Wechat groups” to communicate solutions to their problems and therefore recommend brands or products.
Not very efficient for direct advertisement but is a super tool for community management and building engagement. You can also create your own groups through the APP.
- Open an official account
- Makeup newsletter and brochures
- Community management
Douyin: (Video Empire)
A short video sharing app growing very fast among young generations. So it’s the perfect app to generate content and spread it to a wild audience. More intuitive and fun than WeChat and Weibo, this app is also an amazing tool for KOL.
- Register company account
- Create engaging content
In China, branding is everything. It’s a must-do to gain the trust of your customers. The first step to climbing the success ladder.
The exclusive one.
Pretty complicated to deal with… once they’ll get the certification and authorization to represent your brand, they may start to change the way they deal with you. Cause you won’t be a partner, just a supplier. And their interest will come first.
A good way to proceed is where the brand controls the distribution process. You deal directly with distributors, agents, and resellers. It gives you: your own registration and strong branding.
- Registration: brands need a legal presence in China and certification of the products.
- Branding: good branding lead to easier, shorter, and better negotiation.
Develop your own distribution system.
With this option, you’ll need a lot of investment because setting up stores cost money… sound logic. But the good point is that you’ll see positive results after 1 or 2 years.
Willing to try E-commerce platforms?
That’s a great idea. Probably the easiest way to make money in China.
- Chinese people always look for products to buy online (plus, they LOVE discounts…)
- Easy to buy. They can do it from home/office/their car/everywhere. And they get delivered to home.
- If your clients are satisfied with your products, they’ll buy again.
You have two methodologies here:
- Crossborder E-commerce (Tmall Global, JD Global, etc.)
- Chinese E-commerce platforms (Taobao, Tmall, JD.com, etc.)
Then for crossborder e-commerce platforms, you don’t need to have a Chinese business license or certification from Chinese authorities. But it was expensive…
How to do?
- Pay a deposit
- Build a nice store
- Advertise a lot (at the beginning)
- Pay commission per sales
- Pay daily operation management (high cost)
- Need an active marketing campaign
For Chinese e-commerce platforms, you’ll need a Chinese business license and certification for your products. Costs are generally lower than crossborder and the time to get the products is faster. But you need to understand Chinese or hire someone that can deal with it. Cause the stores are in Chinese. The process to open a store on these platforms remains the same:
- Build a store, design pages
- Advertise it
- Participate in special events (double 11, 618, 12/12, etc.)
- Manage daily operations
- Store supported by your branding
To resume, if you are ready to take place in the Chinese wine market and make money, follow these simple steps:
- Work on your branding
- Think about your distribution channel
- Plan to open a store on an E-commerce platform
It’s simple, but not easy… if you’re brave enough to try it out, you can expect a bright future for your brand.
We are GMA
GMA in 4 sentences
- Experts on the Chinese market & digital marketing specialists.
- We help you to grow your Wine business in China.
- Free advice (and Free Coffee) the Free wine is for you
- Do not hesitate to consult our case study for more information (we have a lot of Case studies on Wines)