WINE MARKET IN CHINA AND THE OPPORTUNITIES OF GROWTH IN 2022

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In 2020, the Chinese population consumed approximately 1.24 billion liters of wine, making China the sixth leading wine consumer worldwide. The year 2019 witnessed the highest wine consumption in the country in the past decade.

Chinese wine consumption in China

wine market

In recent years, the Chinese wine consumption has undergone major changes underlying a modern Chinese consumer, who adopts the Western lifestyle, and prefers foreign products. Wine is a drink reflecting the expectations of this new consumer, generally a young consumer. According to the OIV (2018), in 2017 world wine consumption increased with respect to the previous year due to the fact of increased consumption in the United States, China and Australia.

Main countries for wine consumption

wine consumption by countries

With a total consumption of 32.6 million hL of wine in 2017, the United States established itself for the sixth consecutive year as the world's largest consumer of s Even though traditional alcohol beverages such as Baijiu (Chinese liquor of cereals) and beer occupy the traditional alcohol market and it is not normal to drink wines with traditional Chinese food, Chinese people started to learn more about grape wines in the past decade.

China’s robust wine market

wine world

Wine has been produced in China since around the Han dynasty (206 BC–220 AD). Today, grape wine is deemed as a trendy symbol of social status and luxury in China. Chinese consumers tend to spend more for better quality wine, whereas the lower value end of the market is losing traction.

Imported wines account for around 40 percent of the wine market in the country. In 2020, China was the fifth largest global wine importer, with the import value amounting to approximately 1.6 billion euros.

In 2018, China’s retail sales of wine amounted to approximately 73.5 billion U.S. dollars and was forecasted to grow further. Consumers tend to do wine research and purchasing online, on popular e-commerce platforms such as JD.com, Taobao and Tmall.

Wine demands around the world

According to the OIV (2018), in 2017 world wine consumption increased with respect to the previous year due to the fact of increased consumption in the United States, China and Australia. With a total consumption of 32.6 million hL of wine in 2017.

The United States established itself for the sixth consecutive year as the world's largest consumer of wine, followed by France (27 million hL), Italy (22.6 million hL), Germany (20.2 million hL), and China (17.9 million hL).

The United States and China are the two main world economies, and they both drive the upsurge of consumption of wine in the world. However, it will be China that will become the main consumer before the year 2030 (ahead of the United States and France), and will boost world growth in the next 15 years - Figure 1 and Table I.

Statistiche mercato vino

Which wine is the Chinese consumer’s favorite?

Red wine is by far the most popular type of wine among Chinese consumers. Around 80 percent of all the wine consumed in China is red. China surpassed France and Italy as the world’s largest red wine consumer in 2014.

wine category

In 2018, the retail sales of red wine in China amounted to approximately 64.6 billion U.S. dollars and is expected to nearly double by 2022. In comparison, the annual white wine sales totaled around four billion U.S. dollars.

 

Changyu is the most popular domestic red wine brand in China. Yet despite its lower prices, the majority of wine consumers still prefer foreign brands, particularly French, and are becoming increasingly selective.

Important factors related to wine’s demand

The traditional factors of demand are price, income, and price of a substitute good (beer). The price of wine in China is a critical factor when it comes to explaining demand. Usually, consumers prefer to pay low prices for daily consumption, but higher prices for wine bought for gift purposes or special occasions, since it serves as a symbol of social status. Income is another variable to consider.

wine market europe

In China, the increase in wine consumption is associated with the increase of incomes. In fact, higher income is one of the reasons for the expansion of the consumption of wine in China. The price of a substitute good is another traditional factor considered in the theory of demand. Among the alcoholic beverages, the major competitors of wine are beer and spirits , due to cultural and historical traditions.

How to sell wine in China and increase your brand image.

China’s increasing household incomes are allowing consumers to enjoy a wider array of alcoholic beverages, such as wine. This, combined with China’s potential size makes it an attractive export market for wine producers.

WINE MARKET IN CHINA

. A strategy that will make your brand stronger and more unique from the others is strongly related to digital communication. Indeed, being on Wechat and others Chinese platforms, will make you more visible to Chinese consumers.

Long Advisory Chinese digital agency will help you to increase your sales and brand image in China through digital platforms and taylor made marketing strategies.

 

 

 

GO BEYOND THE WALL


 Matteo Buchta