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Chinese wine market still reliant on ‘business purchases’: report

Chinese consumers drinking wine as an everyday social drink are still only a small part of the market, research has found.

‘Social newbies’: young, adventurous, but need to be engaged

In its two-year ‘China Portraits’ study of over 3000 Chinese wine drinkers who drink imported wine at least twice a year, market analyst Wine Intelligence says over 60% of wine purchases are made by the high-spending one-third of the wine-drinking population.

The country’s wine market is ‘heavily reliant’ on purchases made as part of a ‘business obligation’ by a group dubbed ‘Prestige-seeking traditionalists’.

These make up 22% of the wine drinking population but account for 41% of spend, Wine Intelligence says.

‘These individuals are typically purchasing top end Bordeaux and Burgundy for business dinners and gifts, but are unlikely to venture beyond prestige wines to buy more everyday brands for their own consumption.’

Another high-spending group, ‘Adventurous connoisseurs’, make up 9% of the wine-drinking population but account for 21% of total spend. This group has a far wider repertoire than other high-spenders, and is willing to explore the New World and other regions.

The two groups between them account for 62% of wine spend in China.

Two other segments – dubbed ‘Social Newbies’ and ‘Casual-at-Homers’ – account for more than half the wine-drinking population but only a third of sales by volume.

These groups are younger, drink wine regularly and tend to shop in supermarkets such as Carrefour and Walmart, or discount supermarkets such as Lianhua, Vanguard and Family-Mart. They are adventurous, the researchers say, and are more likely to try New World regions such as Chile than other groups.

They have no set buying pattern and respond to a variety of ‘choice cues’: quality indicators such as ‘Reserve’ or ‘chateau’, varietal, country of origin and brand.

The long-term health of the Chinese wine market rests on its ability to engage more of these consumers – groups which tend to dominate wine sales in more mature markets, Wine Intelligence says.

‘Wine as an everyday social drink is still a relatively small part of this market,’ Maria Troein, the report’s author, said.

According to statisticians IWSR (International Wine and Spirit Research), the Chinese drank 155.8 nine-litre cases of wine in 2011, of which 17.4% were imported and 82.6% produced domestically.

In 1990, the total consumption was 11.9m cases, of which 99.8% were produced domestically.

Wine Intelligence estimates that China currently has approximately 19m drinkers of imported wine, a figure arrived at, it says, ‘by calculating the number of consumers likely to be exposed to imported wine (adults aged 18-50, live in urban areas, upper middle class), and then tracking penetration of imported wine drinking among this population.’

Written by Adam Lechmere

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