The booming Chinese wine market has grown massively in recent years, and with China’s economic growth rate at 7-8% each year, it shows no sign of slowing down any time soon.
Wine marketing in China has been increasingly dynamic in recent years, as wine brands from around the world look for new ways to access this vitally important market.
This article talks about marketing trends as well as an action plan for you.
CHINA IS THE WORLD’S SECOND LARGEST WINE MARKET
Even though Chinese traditional alcohol – rice wine is still the most popular alcoholic drink in China, grape wine is recently becoming a trendy symbol of social status, luxury, as well as “healthy alcohol”.
With increasing middle-class, disposable income, and globalization, the wine market in China has expanded to become the world’s second-largest in terms of revenue, only after the United States.
The market is expected to grow annually by 5.0% (CAGR 2019-2021).
While the annual per capita wine sales and consumption remains low compared to the rest of the world, the demand is rapidly increasing. Therefore, China relies heavily on wine imports.
In 2017, it was the fourth largest wine importer in the world after the U.S., UK, and Germany.
The biggest volume of imported bottled wine comes from France, yet Georgian, Australian, and Chilean wine imports are growing the fastest.
How are wine consumers in China?
Wine consumers in China are mostly the younger urban population. Red wine is often considered as healthy, especially one with lower alcohol content.
Despite the lower prices of several very popular Chinese wine brands such as Changyu and Great Wall, the majority of wine consumers still prefer foreign brands, particularly French, and are becoming increasingly selective.
Sophisticated drinkers, mostly in first-tier cities are happy to pay premium prices for quality wines as education and awareness help drive up the demand for high-end drinks.
TRENDS TO CAPTURE ON FOR WINE MARKETING
Momentum shifts from the mega-cities to smaller inland cities
Western lifestyle products were first adopted in China’s first tier-cities such as Beijing, Shanghai, Tianjin or Shenzen… But now it looks like the momentum is shifting to Chinese cities such as Chengdu or Xi’an.
While these cities might not have the epic scale of China’s mega-cities, they are still growing extraordinarily fast, and should be targeted by wine businesses now on.
KOLs to endorse wines is seen more and more
KOLs marketing is increasingly utilized by foreign wine brands since they promote effectively the act of drinking wines as something not only sophisticated and trendy but very healthy.
In September 2018, Wine Australia scored great success with Chinese social media stars to showcase Australian wines to Chinese consumers. The two stars, Chufei and Churan, were actually brought to Australia for a two-day series of tastings, events, and of course, glamorous selfies.
There will be more wine brands to embrace KOLs in 2019 as they look for new ways to expand their presence in China.
Live-stream and online video making are content king
Deloitte, a consultant, estimates that China’s live streaming revenue will hit $4.4 U.S billion by the end of 2018, and a report by iResearch shows China’s short video market being valued at $900 U.S million in 2017, a YoY increase of 184%, which means that users prefer this type of dynamic, engaging content.
Wine marketing can be very exciting and creative when brands know how to maximize live-stream and short videos to transfer their messages and engage consumers just like fashion brands.
Wine marketing that emphasizes health and wellness
Wine Intelligence recently looked at the typical motivations of why Chinese consumers drink wine. The No. 1 reason was the health benefits of wine.
In fact, only 32 percent of Chinese wine consumers drink wine because they actually enjoy the taste. Most of them, especially young female consumers, drink wine for health and beauty purposes.
This is properly the most significant difference between the perception of grape wine and that of Chinese traditional rice wine. Considering that the Chinese middle class is increasingly concerned about health and wellness, as well as they are better educated about wines over time, this insight can be a good direction for brand positioning or marketing campaigns, or even content building.
Wine tastings, wine education, and wine tourism
The Chinese government is very keen on developing wine culture in China, and as a result, has dedicated significant resources to wine education.
Being able to talk knowledgeably about wine is also one way for people to demonstrate social cachet. So wine marketers are also embracing this trend, seeing it as a way to establish much closer links with Chinese wine drinkers.
In addition, wine tourism is also growing in popularity, thanks in part to support from the state. The hottest wine region in China right now is Ningxia, which now boasts Bordeaux-style chateaux and internationally recognized wines.
The high-end Market is rising
With the high-speed economic development in China, young people can now afford and adopt the habit of drinking wine.
They appreciate different wine categories, grape varieties, and country products through international exposure gained in their travels abroad or through educational materials received at home.
These consumers are eager to find suitable products to satisfy their tastes and are willing to accept expensive wines.
The high-end wine market will continue to rise, posing an immense opportunity for luxury wine brands.
DIGITAL STRATEGIES FOR WINE BRANDS TO COMPETE
While wine marketing has previously relied on offline techniques such as in-store activity, gifting, wine events, and dinners, digital and social media has become a crucial channel for brands considering that more than 50% of the Chinese population use the Internet and 65% use social media.
Social media for brand awareness and engagement
Check here the most popular social media in China (2019).
In most markets, businesses have come to realize the importance of social media in reaching consumers, but in China, social media has permeated throughout the end-to-end customer journey.
Chinese customers use social media to discover new brands and products, validate the product quality through reviews, comments, and feedback, purchase directly through a social channel, and write a review about their products or experiences.
Therefore, this is an important channel to reach Chinese customers, engage with them, convert them into shoppers as well as maintain relationships with customers.
Wechat started as an instant messaging app but now has developed an ecosystem where users can perform a wide variety of activities such as online payment, online shopping, playing games, booking tickets…
- In Q4 – 2018, WeChat had almost 1.1 billion, monthly active users.
- On average, users spend more than 66 minutes on WeChat daily.
- 60% of WeChat users open the app more than 10 times a day.
- By the end of 2017, the number of WeChat’s Official Accounts surpassed 20M.
Wine brands can maximize Wechat in various ways:
- Official accounts to post branded content or educate followers about wine
- Mini programs or mini games to interact with customers and enhance engagement
- Customer service thanks to the one-on-one chatting function of Wechat
- HTML5 pages for creative campaigns to increase conversion rate
- Wechat ads to reach new users
- Wechat shops: sell directly your wines within WeChat platform
Weibo is a more open social media platform than Wechat where people not only post, share and interact but also get updated on trends and news. This is the place for content to go viral and for KOLs to build their online communities.
- Number of Weibo active users: 465M (2019)
- Number of daily users: 203M (2019)
- There are over 100 million messages posted by users each day
- 50% increase in livestream sessions
- Q&A postings increased by 400% in 2018 compared to 2017
- 82 percent of Weibo users shop online
Wine brands can engage in various ways:
- Verified account for branded/ educational/ entertaining contents
- KOLs marketing: Good content featuring KOLs has the highest chance to go viral on Weibo
- Micro topics: brands can host or join discussions related to wine drinking to show their expertise.
- Weibo ads to reach more customers
- E-commerce: Weibo posts can link to JD platform, allowing followers to shop wines directly online.
KOLs marketing is proven to amplify your brand awareness and sales
KOLs in China are indispensable figures for brand promotion. Prominent figures with millions of followers on Chinese social networks advise the public on what to use and buy.
Chinese consumers, unlike Western ones, do not find direct sales annoying. It is not uncommon to find KOL’s content that has direct links to the e-commerce of the products they endorse.
This is why, for a product still unfamiliar with wine, it is imperative to have a testimonial that tells its values to the general public.
Brands can engage opinion leaders and experts in wines, spirits, and gastronomy, and organize something like wine-tasting events.
The website is your main hub of information
Website is undoubtedly important. It is your information hub where customers always find the most official information about your products and services.
The website should be hosted in China for SEO reasons. Contents should be written in native Mandarin and the design would best combine your origin’s style with Chinese preferences.
Wines can have a lot of stories to tell. Be a good storyteller! You can talk about your history of making wines, the culture of drinking wines, nutrition information… There are multiple angles to explore.
In addition, your website must follow Chinese standards and Chinese trends. In most cases, a homepage consists of a lot of information and is written in small characters. If western consumers prefer a clean aesthetic interface, it’s not what Chinese consumers like.
For e-commerce websites, Chinese consumers are used to having precise information, with prices, product details, reviews from other buyers, and anything to be aware of. Chinese customers hate wasting time looking for information, especially during the payment process.
Without Baidu ranking, your website is a waste!
Chinese consumers often go online to look for information on wine. Consequently, if you are not visible when consumers search for wines on Baidu, you would miss a great deal of potential traffic.
To develop your visibility on Baidu, you can use different solutions:
- Pay Per Click (PPC) or Search Engine Marketing (SEM) refers to ads. This solution can raise your website to top positions immediately but can be quite expensive in the long term.
- SEO is better in the long term, and extremely efficient but requires more effort and patience. The main engine for SEO is tons of articles optimized for relevant keywords in order for the website to be indexed by Baidu, and thus it can appear on Baidu’s search engine result page.
Baidu algorithms definitely have many differences from Google due to cultural differences, governmental control of information, and the browsing habits of the Chinese.
In addition, Baidu has its own websites and redirects 27% of its traffic to these sites: Baidu Zhidao (Q&A), Baidu Baike (Wikipedia), and Baidu Tieba (Forum). This means that, in order to promote your website on the Chinese Internet, you also have to be active on these affiliating websites of Baidu.
Selling online is a must if you are in China market
Under the impact of the Internet and digitalization, Chinese consumers tend to shop online for everything including wines.
Currently, 20 percent of all wine sold in China is sold via e-commerce websites, and some experts expect that figure to be close to 50 percent within a decade.
For both domestic Chinese and foreign wine producers, e-commerce is now the go-to destination for selling wine to Chinese consumers around the nation.
CREATE YOUR SHOP ON E-COMMERCE GIANTS
Without a doubt, Tmall.com is the No. 1 leader in the China wine e-commerce sector.
By some estimates, Tmall.com now has a commanding 50 percent market share of all wine e-commerce sales.
Many of the wine retailers have set up their own storefronts on Tmall.com. It is also a choice for wine brands to set up their flagship stores on Tmall.com.
JingDong launched at the end of 2010 and is now the closest rival to Tmall.com in terms of wine e-commerce dominance.
According to JD.com executives, wine now accounts for nearly 25 percent of all online alcohol sales.
Just like Tmall.com, JD.com operates a mix of direct-to-consumer wine sales (in which wine is stored in a warehouse and shipped directly to consumers) and an online shopping mall made up of smaller merchants looking to sell their wine via storefronts.
Big foreign wine brands with a major presence on JD.com include Penfolds, Yellow Tail, Casilleros del Diablo and Lafite Rothschild.
GAIN MORE EXPOSURE THROUGH NICHE SITES
YesMyWine originally launched as a company selling wine via telephone. But then along came the Internet, and YesMyWine.com shifted to a pure e-commerce model.
Unlike a big e-commerce site like Tmall.com (which sells just about everything imaginable), YesMyWine sells only wine. In 2014, YesMyWine first made headlines by selling 7 million bottles of wine.
Moreover, YesMyWine has made its site much more of a “wine community,” where you can meet other wine enthusiasts across China.
Wangjiu.com serves a unique niche which is offering premium wines; wines customized for the needs of businesses such as banks and media companies; and wines for wealthy private clients.
In 2013, Wangjiu famously ran a promotion in which it essentially “crowdsourced” the idea for wine by polling its 200,000 customers, asking them questions about the perfect wine in terms of color and grape varietal, as well as a wine label, price, closure, and even bottle weight.
The company then cross-referenced all of these characteristics against wines from its product portfolio, before collaborating with Chateau de Birot to create the winner. The wine was named “Coup de Coeur” (“Crush”).
Close behind YesMyWine is Vinehoo.com, which is typically named one of the leading examples of the B2C wine e-commerce model.
When getting published on Tmall or JD can be challenging since they require a rigorous application process to ensure the quality of products, brands can turn to above niche and smaller sites to gain more exposure for their wines.
You can also read our Strategic Guide to Export Food Brands in China
1. MY RED CASTLE
MyRedCastle is a French start-up wine producer and customization brand. They provide a special service: customization of wine from French AOC chateau.
After understanding that the demand is growing for wine in China, they decided to enter in the Chinese market through online approach. So our agency made a careful proposal based on the overview and analysis of the market for them and conducted their marketing in China.
- SEO on Baidu
- Public Relations
- Management of the e-reputation
- Weibo: Community management
- Wine distributor contacts
- Top 1st pages via 20 keywords.
- 200 posts published on forums.
- 30 PRs.
- 30 contacts of wine distributor.
- + 15 000 visitors per month during the program.
2. Fancy Cellar
The French Cellar imports French wines directly from reputable vineyards.
All the wines are delivered with wine-tasting notes, written by their prestigious sommelier for Chinese consumers to learn more about the wines, winemakers, and local culture & geography in France.
- Community Management
- Exposure to 1 million people
- 25 events
- 50% of keywords on 1st page
GET IN TOUCH WITH US!
If you take everything in consideration, the WINE market in China could be the opportunity of a lifetime for your imported brand. Maybe tomorrow you could have many fans and buyers in China and be a real threat to the other competitors.
In this adventure, you will have to make difficult decisions, that could have a significant impact on the long-term. Therefore, it’s needed that you take the right ones. WorkING with specialist of the marketing in China can help you to avoid traps. Only then your brand will be successful.
Carolina Caparros Alvarez
I am looking for a proposal to position some wines of my client´s portfolio in the Chineese market. I would like to knwo how do you work. We would like to sell online, as the traditional path is too slow and crowded. COuld you please extend a proposal of steps, time and prices?
Would you accept any fix and variable (on sales success) scheme?
My client´s brand is a Spanish Winery and they have two different businesses. High end wines. From 50 to 190 euros wines, and the value one that has a wonderful price/quality positioning in Spain. Yllera is the lider in the youth cathegory in Spain with low alcohol, 5.5 wines frizzante in Spain. I look forward to your response. Many thanks in advance