China: we must understand differences or lose out

Wine Intelligence,China News Wine News
  • Thursday 18 February 2010

The opportunity China represents can only be exploited if brand owners truly understand they must cater for a radically different market.

The China Wine Market Landscape Report, a new study from Wine Intelligence, sets out the opportunities in a country that has an estimated 34m ‘upper-middle class consumers’ – a figure that should rise to 82m by 2025.

But exporters will only make headway if they have specific strategies for China and don’t simply see it as another market.

‘Global brand owners must find out what the Chinese really want, explain their products, and understand they must be tailored to Chinese needs,’ Richard Halstead, chief operating officer of Wine Intelligence told decanter.com.

Consumers still find the process of buying imported wine difficult because even in international supermarkets like Carrefour or Tesco there is little information on the label to tell them what the wine is.

'I think most of the wine industry round the world would agree that Asia in general, and China in particular, represent a colossal opportunity for sales growth over the next 20-30 years,' Halstead said.

'Yet the closer you get to the market, the more you see that global brand owners have a lot of work still to do, both in terms of distribution and product positioning, to really engage with Chinese consumers.'

China is already the eighth largest wine market by volume. The report quotes recent data putting it at 72m cases, and growing at 18.5% per annum.

Wine Intelligence considers upper-middle class consumers – those with over RMB50,000 (US$7,300) disposable income per annum – as ‘the key to imported wine’s future in China’.

While 90% of the wine drunk in China is domestically produced, this growing rump of affluent consumers increasingly chooses imported wine.

Halstead said he wanted to explode ‘the 7UP myth’ – referring to the belief that the Chinese mix fine Bordeaux with soft drinks to make it more palatable.

‘There is no doubt that there is a new generation of urban professionals in their 20s and 30s who like drinking wine.’

At the moment, ‘Chinese culture has grown used to thinking wine equals red wine,’ Halstead said, but this is changing.

While white and sparkling wine together represent only about 10% of imported wine consumption, ‘there are growth opportunities for white wine as more people follow their own learning curves.’

It is becoming more usual, for example, for women to choose white wine with fish.

The China Wine Market Landscape Report came out of a research project conducted in partnership with InterRhone, the trade body for Rhone wines, which has ‘identified China as the key growth area for their growers’ products over the next 20 years’, Halstead said.

Follow us on Twitter

Wine News

Wine News

Daily wine news - the latest breaking wine news from around the world

Related Topics