GWS takes in-depth look at Chinese market

The Olympics and the world have come to China, and Global Wine & Spirits is right there at the forefront. We have invested considerable energy over the past few months developing a thorough understanding of the Chinese market. Following close on the heels of the launch of our Shenzhen office and a strong presence at SIAL China, we are now publishing the first in a series of national reports available exclusively to Global Wine & Spirits members. Here is a brief summary of our report on China.

The Chinese wine and spirits market continues to evolve. Moving towards 2010, China will remain the world’s most dynamic market with about 36% growth in consumption, compared with an average of 4.8% for the rest of the world. Although every year sees new records being set, wine sales still represent only 5% of business for the alcoholic beverages industry. With a growing middle class in the major urban areas, the demand for premium goods is also increasing. As a result, wine has become a fashionable product and a major status symbol. One of the key factors driving this trend is the decision of authorities to encourage sector growth by promoting the health benefits of wine. The government now intends to play an active role in providing wine education and making the product more accessible to all consumers. This will enable imported wines to better penetrate a market where domestic products represent about 90% of all sales. Chinese wine imports are still in their infancy but growing annually, with France, Australia and Italy leading the way. This is a market with huge discrepancies in consumption patterns: rural versus urban, East coast versus the interior, and local consumers versus foreigners and expatriates. In short, domestic wines dominate the low-end market with strong sales in rural areas, while imported wines dominate the high-end market, which primarily comprises foreigners along the East coast.