Wine market in China
The Chinese market for domestic and imported wine has been developing rapidly, though it is still a small part of the alcoholic drinks market.
The largest market for imported wine is “on-premise”, at top-end hotels, restaurants, bars and nightclubs. Four and five-star hotels, Western restaurants and upscale local chain restaurants generally carry a selection of imported wines, alongside local offerings.
The retail market for imported wines is also growing. Foreign supermarket chains normally have a wine corner at outlets located in middle to high income districts. High-end domestic department stores also carry imported wine, as do independent wine shops.
Knowledge of wine producing countries and varietals at consumer, and in many cases trade, level is limited. France and Italy have enjoyed higher recognition due to their inherent image and higher levels of promotion, but some blind tastings have shown that Chinese consumers often prefer the fruitier and fuller flavours of New World wines.
Some reports suggest however that more than 70 percent of the wine consumed in China is red. Its popularity is linked to perceived health benefits and the fact that red is a colour traditionally linked to festivals and gift giving.
Growth is being driven by continued increases in disposable income among middle-income consumers with a propensity to spend on luxury products such as wine.
Getting your product into market
As with most imported food and beverage products, an importer and distributor or wholesaler are typically involved in the distribution of foreign wine before it reaches retail or hotel, restaurant and institution users. In some cases, the importer will also perform the role of distributor.
Distributors also sell direct to consumers, in some instances through wine clubs or direct mail. It is difficult for a single distributor to manage the entire China market, so it may be appropriate to appoint more than one regional distributor.
There’s a limited number of capable distributors in China. The ones that are will either have foreign ownership or at least strong foreign involvement at a management level in-house. Approximately 40 percent of imported wine enters China through Shanghai, so it is natural that the city has become the base for the majority of the leading distributors.
Leading or capable importers typically only want to deal with companies that have a wide range of wines and good volumes. If they are going to invest money on advertising and promoting a New Zealand label, they normally want at least four wines from that company.
Regulations
There are numerous laws and regulations relating to imported food and beverage products in China and these are updated or revised continuously. When negotiating supply contracts and before beginning actual export, companies are advised to consult closely with their importer or distributor.
Opportunities
Grape wine consumption is growing in contrast to a declining market for traditional grain-based alcohol – a trend that is linked to health awareness and changes in lifestyle.Challenges
Competition is high and good distributors and outlets are limited. Distributors are reluctant to take on additional labels unless they are a “sure bet” and are supported by significant market support (including financial) from wineries.
