The situation of import wine in China(1)

            Sharing China's market, how should you expand ?
            After China's entry to the WTO, the import tariff was reduced
            gradually. and it is thought that import wine would flood in China's
            market. Most people believe that domestic wine company would face
            high pressure by the import wine with lower price. However, it was
            not true, only the variety of import wine was increased in the
            China's wine market. This article try to explain and discus the
            competitive situation of import wine by SWOT (strength, weakness,
            opportunity and threat) analysis.
            The Analysis of the  advantage of import wine
            1.Countries of good reputation
            At present, the major import wine countries to China are France,
            Spain, Italy, German, USA, Chile, Argentina, Australia, New Zealand
            and South Africa. French wine enjoys good reputation in China and
            around the world. Other countries, such as Australia, Italy, German
            and USA all have good countries' image among Chinese customers. A
            distributor of import wine said that the demand for import wine
            increased dramatically in Beijing. The growth rate maintains 30%-40%
            annually. The most popular import wine countries are France, Italy,
            Spain, Australia and USA. Since the wine from "new world" and "old
            world" own their unique characters, which will help import wine
            enter into China's market more quickly.
            2.Good quality
            Most of wine producing country from 'new world' and 'old world' such
            as France, German, Italy, Canada and USA issued some legal
            regulations to ensure the quality management for wine production.
            There are relatively stable customers for import wine in China,
            which because of their good quality. Though little import inferior
            wine was regarded as the high quality wine, which could not affect
            the main sale situation of the high quality wine, in the same time,
            some marketing conceptions about import wine are spreading, but the
            premium quality of import wine is the basis of marketing in China's
            market.
            3.good prospect of wine industry
            From worldwide aspect, the supply of wine is higher than the demand.
            Since 1980, the world wine consume volume was declining. In 2002,
            there was about 6.2 million over production of wine in the world.
            According to the research result from biggest wine exhibition
            company Vinexpo, there will be 10 million wines over production by
            2005. The major wine producers have to find the new market to
            overcome this problem. China's wine market keeps over 10% growth
            rate in recent years. The low-end, middle-end and high-end wine
            occupied 50%, 40% and 10% market share respectively. The profit rate
            of low and middle end wine only keep 11 %, the profit rate of high
            end wine is from 30% to 50%. The middle and high-end wine are the
            major import wines in China market.
            The Analysis of the disadvantage of import wine
            1.Lack of outstanding brand　　
            In 2003, import bottle wines were 4.605 million liters in China,
            which was increased 7.2% compare with 2002. It concentrate on
            France, the following are Australia, USA, Italy and Spain. At same
            time average import price was increased from $2.4/L to $2.7/L. It
            shows that import high quality bottle wine was increased. Although
            many wine import countries have good reputation, brands from many
            countries are various. There is no single brand that leads in the
            market. Therefore it is hard to build the brand loyalty.
            2.Lack of support for market promotion
            At present, import wine only occupy 10% market share in China's wine
            market. Most of dealer are the distributor of foreign found company,
            joint venture company or small domestic trade company, Just like
            domestic wine company, import wine will not only restricted by high
            cost from market expanding, market cultivation and channel
            operation, but also the cost from high entry fee (hotel,
            supermarket, bar, KTV and club) and all kinds of promotion expense.
            Since import wine chosen high quality and high price pricing
            strategy, and market share is relatively small, plus lack of brand
            loyalty, foreign producers cannot offer strong support for market
            promotion.