The Chinese market of Wine can be described in two words: largeness & dynamicity. Thinking at it in these terms, any sellers would be a little scared of entering China; however, this challenging market can be extremely profitable…
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The development of the imported wine market in China
The history of the imported wine market in China began in the early ’80s when foreign companies could sell their products in the country for the first time.
The Chinese Wine Industry is principally based on rice wine, but this doesn’t mean the grape version isn’t appreciated by the Chinese; on the contrary, the grape is considered the main ingredient of special wines, those destined to wealthy people.
The demand for wine rapidly increases since 1990, when Chinese interest in imported products started to grow. During the 90’ such demand grew at such a rapid rate that the quality of products dramatically lowered because the supply wasn’t enough to satisfy it.
Finally, when China entered the World Trade Organization in 2001, many new foreign players could import their products to China, and this event, together with the rise of the middle class’s demand, made the import of wine grow even more rapidly.
Today, China has the highest wine consumption growth rate in the world, which is mainly related to imported and grapes wines instead that rice wines.
The imported Wine to China at the time of the Coronavirus
The wine sector is one of those sectors that suffer the most in China. In fact, while many categories have incredibly restarted the rise from April, the wine imported market didn’t see any light during the first half of 2020.
In short, almost all the countries suffered a decrease in production and in export to China, especially France that see a 45% fall, followed by Italy, Spain and Australia with a 30%.
The only country that kept growing in the middle of a disaster was Argentina, with a 590% increase.
But economists are positive, China is the country that is reemerging better than any other from the crisis. It is esteemed a fast recovery of the wine market in the near future.
What’s Chinese taste on the matter of imported wine?
The Rise of sparkle wine in China
Even if the Chinese have always preferred still wine to the sparkling kind, the second is gaining market share in the last years, it has seen a steady growth from 2015 but sparkling wines still account for 90% of the imported wine market.
The new leading role of Australian wine in China
Australian wine is at the top of the list of the most imported wines in China, followed by France, which has been the favorite wine for years. The Australian wine took the lead in 2019 probably due to two main reasons: the first was the great effort of Australian companies in educating Chinese consumers, an example is the brand Penfold’s, the other is the China-Australia Free Trade Agreement (CHAFTA) in 2015, thanks to which Australian brands can import product with zero tariffs.
But in 2020, the order was shaken once again, because Chinese authorities accused Australian companies of violating anti-dumping regulations. This decision can turn the tables and makes it climb off the podium soon.
French Wine: the most known in China
Not even two years ago, France was leading undisturbed with the most famous wine in China the Bordeaux. It sounds weird but the Bordeaux is so famous in China that local wine becomes foreigners in comparison with it.
The reason why Bordeaux has no rivals is that French people have been very good in marketing, they have never sold a wine, they have sold an idea. When a Chinese buys this prestigious wine is like buying the symbol of sophistication.
However, with the new role of Australia (and Chile behind both), France has started to change its strategy and no more betting everything on one wine but reinforcing the position of other strong protagonists of its industry, such as the Rosé and the Champagne. The Champagne’s imports to China grew by 9.1% from 2018 to 2019.
The rapid growth of Chilean Wine in China
During the last decade, Chilean companies have been able to triple the yearly export of their wines to China thanks to their capacity to change the consideration of Chinese on Chilean wines. In the beginning, this wine was has a bad reputation, in fact, the Chinese bought it just because of its price; but recently, many Chilean brands have been good to give Chinese a new reason to buy it, which is the particular fruity flavor.
In 2020, Chile sold 154 million liters of wine to China, three times more than those sold in 2010.
The price of Italian wine doubled in 5 years
In the last five years, Italian wine has doubled its price and the amount of wine sold in China has increased of 10 million liters. While the higher price indicates the increase of awareness of Italian wine in China, the amount of wine sold to Chinese consumers is not impressive, especially if compared to the production level of the country: more than a quarter of wine in the world.
Spain plans the road for the success
Up to now, Spain’s growth has been quite irregular, there have been years with a high level of growth and others of sharp decrease. Recently, a solution seems to be found, several wineries have had a confrontation to find a unique way to operate, so in 2019 the Chinese and Spanish association was established with the scope of promoting the culture and the sales of Spanish wine in China.
Together we conquer China
A beautiful alliance was born in June 2020. Chile, Argentina, South Africa, New Zealand, and the US together with a Chinese partner named Shanghai’s Grapea & co., created an online marketing campaign that has the objective of letting the Chinese know about their wine. Free virtual masterclasses and videos about food pairings for wine, history, and winemaking were published on digital platforms like Tiktok, WeChat, and Tmall. Their final scope? Build “new worlds wine” brand awareness.
Here are the top 10 countries that imported more wine to China in 2019 (in terms of value):
- United States
- South Africa
How to sell your wine in China?
- Find an importer
- Find a distributor
- Find a digital marketing agency
What are the main importer and distributors in China?
- Oil and Foodstuffs Corporation (COFCO), was the unique importers during the first years in which China began to import wine and, according to the volume of distributed wine, is still the leader in China. COFCO uses a logistics company called C & D for the bulk of its imports into China.
- ASC Fine Wines: representant of over 100 wineries and more than 1,200 different wines.
- East Meets West (EMW) Fine Wines: representant of more than 600 wine brands from more than 12 different countries.
- Torres China: only sells wine coming from the world’s most renowned wine-producing regions.
- Globus Wine Company: most of its wine comes from boutique producers and it represents around 200 producers.
- Summer Gates: only sells high-quality products of well-known brands.
Where you can find your partner in China?
There are a lot of distributors and importers in the Chinese market, it isn’t easy to find the right one as it isn’t simply that they accept your request for collaboration. This because they want to work with companies already well-known in China, or with an online reputation. They want to sell fast without any be uncharged by doing branding.
However, in short, to answer this question, we can say that you can make a digital search (but can be time-consuming), relying on a partner that can connect you with the online and offline market (as we can), or attend a trade fair. There are many wine trade fair in China and outside China where you can find interesting companies to work with.
Here are some of the most famous wine shows in China:
- China Wine & Food Fair
- China National Food Wine and Spirits Fair
- ProWine China
- Top Wine China
- World Bulk Wine Exhibition
How to build your online reputation?
First of all, you need a Chinese website. The website must be hosted in China, if not consumers would not bear to wait a long time for loading the pages. Also, the content must be adapted to Chinese consumer’s taste.
Chinese are used to be online many hours per day visiting numerous websites; Chinese companies are very competitive, they use many digital channels, beautiful design, good storytelling, and attractive videos and images.
So, you cannot do less, otherwise, your target doesn’t even consider you.
Secondly, you need to be found. You cannot just pretend to have your own place in the huge digital eco-system and become popular in China. In order to be found, you must be present on the different digital platforms. Various channels connected to each other give you more possibilities to be seen as reliable and interesting in your potential customers’ eyes.
What are the main digital platforms to improve your brand awareness in China?
- Baidu: the most important search engine in China (it owns 70% of the market). Doing SEO or SEA is the first thing to do to be found.
- WeChat: the most used social media in China, Chinese use it to pay, doing shopping online, follow KOLs, and receive newsletters, which appears like messages on the home page of WeChat. Read this guide to know how to do WeChat marketing properly.
- Weibo: an open social media, very used by KOLs and very useful to build brand awareness. This social media is a powerful weapon to advertise, company can use keywords, cooperate with KOLs and make creative campaigns to become popular. It also belongs to Alibaba, which also owns Tmall, Taobao, the most popular e-commerce platform in China.
- Douyin: also known as Tiktok, is the most popular Chinese social media outside of China but also very influential inside the country. Chinese love watching short videos made by their favorite influencers or KOCs (Key Opinion Consumers) on it. So, you should also consider doing branding on it.
- Tmall: a very popular e-commerce platform in China. Chinese love to use especially for buying luxury products or high-quality products. It has a very good reputation that makes it one of the best places to sell wine online since Chinese consumers want to buy foreign wine because of its high quality and for what it represents.
- Zhihu: is a Q&A forum (the Chinese version of Quora). If you have chosen to do SEO on Baidu, this will be a fundamental tool of your SEO strategy.
There are many other social media and digital platforms you can take into consideration, just contact us and we tell you what the better strategy for your brand is.
GMA can help your company to make the right decisions in order to be competitive in China, find the right importers and distributors, help you to get a license, build your online and offline marketing strategy.
GMA can be the partner that makes your success in China.