Source: Alex Sampson, The Weekly Times
Friday 7th July, 2017
Chinese Wine Market: Shift in Consumption
The Chinese wine market is “dynamic” and “always changing” as consumers learn to drink wine for enjoyment, rather than status or health.
Wine Intelligence senior research manager Chuan Zhou told delegates at a Wine Australia lunch in Melbourne yesterday that Chinese consumers were shifting away from drinking expensive wines served at business lunches and bought as status symbol gifts, toward cheaper wines bought to drink and enjoy at home.
As part of the shift, they have moved away from “old world” European wines toward lighter Australian wines with low acidity and minimal tannins, that taste of cherry, blueberry, blackcurrant and blackberry.
According to Mr Zhou, as this happens, Chinese consumer are beginning to drink wine on its own, rather than mixing it with coke, juice and ice.
Mr Zhou said Chinese consumers that had previously never heard of white wine were now thirsty for riesling, sauvingnon blanc, chardonnay, chenin blanc and moscato.
Over the past six months 48 per cent of Chinese imported wine drinkers bought wine online, with eCommerce “vital” to Chinese wine trade, driven by recommendation and supported by lower prices.
Walmart facilitated 35 per cent of online wine sales and Amazon 24 per cent.
Mr Zhou said the market was often faulted for being hard to predict.
“Everyone is always saying that the Chinese market is ever changing and it’s difficult to know what’s going on,” Mr Zhou said.
“We’re seeing some new trends and it’s a really positive outlook for Australian wine in China, in terms of recognition and reputation.
“There are close ties between Australia and China in terms of tourism, trade and education and that helps shape the perception of Australian wine in China.”
Mr Zhou said while penetration had been driven by brands such as Penfolds and Yellow Tail, consumers now knew a lot of Australian brands.
“I don’t know where it comes from but a lot of people say they drink Australian wine because they hear it is more suitable for a Chinese palate,” Mr Zhou
“They have got this stereotype already about Australian wine being fruity and not oak driven, so they try it and validate that they prefer it.
“When I drink Australian wine I feel it’s so different from the old world, so I can see why it’s appealing to Chinese people — it’s easier to understand, easier drinking and also the branding is more straightforward and the labels are modern and contemporary.
“You can look at a label for Australia wine and easily see what grape it is, where’s it’s grown, what flavour to expect — it represents new world wine.”
In the 12 months to March 2017, Australian wine exports to mainland China grew 43 per cent in value to $568 million, driven by bottled wine exports.
Mainland China is Australia’s number one export market by value.
12 KEY TRENDS IN THE EVOLVING CHINESE WINE MARKET, ACCORDING TO WINE INTELLIGENCE:
1. EXPANDING market — despite Chinese GDP growth slowing, the wine market is still expanding rapidly.
2. ACCELERATION of personal wine consumption — a continuing shift away from wine purchased for the benefit of others, to wine purchased for personal, everyday consumption.
3. YOUNGER and diversifying wine drinker population — becoming younger, more experimental and open-minded.
4. WINE flavour becoming key driver in wine choice — consumers looking for wines that are suited to the Chinese palate.
5. STRONG growth in fruit-driven, lower tannin styled red wines.
6. STRONG potential for aromatic white wines.
7. GROWTH potential for sparkling wines — primarily driven by sweeter styles.
8. WINE preferences vary by region within China.
9. CONTINUED shift to online purchasing.
10. NORMALISATION of retail prices — driven by increasing consumer knowledge and ability of online retailers to offer lower prices and price transparency.
11. BROADER availability of wines in on-trade, increasingly with lowered prices.
12. INCREASING acceptance of screw cap closures.