Key Facts about the Chinese Wine Market
China is home to 48 million wine lovers, around 40% of these aged 18 to 29 years old. Currently, the country’s market is valued at US$15.24 billion. Top exporters of wine to China are France, Australia, Chile, Spain and Italy. The volume of imported wine consumed by the Chinese continues to grow at a double-digit rate, expecting to reach US$23 billion or around 192 million in the next five years. Per capita consumption is at 1.34 liters and is expected to grow 1.53 liters by 2020.
Wine Consumption in China
China is set to become the second-largest market for wine in the world. The growth rate of the wine market is expected to exceed 30% in 2021. Among the wines sold in off-trade channels and online platforms, those priced between US$5 and US$20 per bottle are the dominant choices of consumers. Meanwhile, the premium and super-premium sectors see year-on-year growth of around 11 % and 2%, respectively.
The southern Guangdong province bordering Hong Kong and Macau is the biggest market for wine in China, with US$909 million imports in 2017. Shanghai is second at US$735.5 million, followed by Zhejiang province with US$189 million and Fujian province with US$136.3 million. Other provinces and municipalities with over US$100 million worth of wine imports are Beijing, Tianjin and Shandong.
Wine Preference per Region
Wine preferences vary by region within China. Those from the North (Beijing, Shenyang and Zhengzhou) prefer their vintages dry and full-bodied, while those from the South (Guangzhou and Shenzhen) like them fresh, oaky and smooth. Meanwhile, consumers from the East (Shanghai and Hangzhou) choose rich and earthy vintages, while those from the West (Chengdu, Chongqing, Guiyang) prefer their wines light, sweet and fruity.
The Chinese also tend to pick their wines depending on the food they eat. When dining, they often pair red wine with oily food. Varietals with high acidity and tannin level match well with Shanghai cuisine. White wine, on the other hand, enhances the fresh taste of seafood and white meat in Cantonese cuisine. Champagne is a safe choice for the undecided, as it goes well with any Chinese food.
Purchasing Channels for Wine
Supermarkets and hypermarkets are the primary channels for buying wine in China. They mainly target the mass market or those consumers whose monthly household income is between RMB 8,000 to 14,999 (US$ 1,200 to US$ 2,200). Around 68% of the Chinese purchase their wines in bricks-and-mortar stores. Meanwhile, wines sold in at wine merchants and specialist outlets are more expensive and higher in grade.
As China embraces the convenience of online shopping, more consumers are buying their wines via online platforms. The country is home to online market giants like JD.com and Alibaba. In Q2 of 2018, 59 million wine bottles worth RMB 5.25 billion (US$ 775 million) were sold through JD.com, Tmall and Taobao. Growth in sales value was recorded across all price brands, with the biggest sales happening during major events in China.
Parting Thoughts on the Chinese Wine Market
Increased consumption has primarily led to the growth of the Chinese wine market. Many wine producers see the Chinese’s continued interest in imported vintages as an encouraging sign that the hype will not wane anytime soon. It is important to note, however, that a market as large as China’s means competition is high. For companies planning to sell in the country, it is best to study the market thoroughly and plan accordingly to avoid loses.