Wine In China: Growing In Popularity But Still A Hard Sell

Importers, Wine Stores Contend With Uneducated Consumers, But See Opportunity In Growing Number Of Enthusiastic Wine Drinkers

Wine imports have surged in China, especially following the country's accession to the WTO in 2001

Wine imports have surged in China, especially following the country's accession to the WTO in 2001

One of the more interesting luxury niches in China (to us, anyway) is wine. From Hong Kong wine auctions, where mainland collectors are increasingly turning out in force to get their hands on rare and valuable (predominantly French) bottles to the growing number of wine stores and wine events taking place in Beijing and other cities, China has become one of the world’s fastest-growing wine markets.

However, just because the market is lucrative doesn’t mean it’s a cakewalk for wine producers. At the moment,  many Chinese purchase wine either as a gift for others rather than for home consumption, and often wine is consumed at large social functions mainly as a status symbol (and because its alcohol content is lower than the traditional social tipple, baijiu). However, as poor consumer education is increasingly displaced by greater wine appreciation, many major wine producers (both Chinese and foreign) are optimistic about their continued prospects in mainland China.

As an interesting editorial in China’s Global Times illustrates, though it will likely take quite some time for a significant number of people in China to actually enjoy wine (rather than simply drinking it at social events to save face) and choose their favorite wines based on personal taste rather than TV shows or movies, just like everything in China the market is maturing quickly:

“I’d like to see Chinese people drink wine because they actually enjoy it,” said Fongyee Walker, founder of Dragon Phoenix Fine Wine Consulting in Beijing. “Red wine is largely still just a status symbol, something people drink in social situations, to preserve face, but not because they actually like the taste.”

Reasons for how Chinese people select their wines range from standard tropes of grape variety, country of origin and word-of-mouth, to the fact that “they saw it in a Hong Kong gangster movie,” according to Tomaz Hladnik, manager of a Enoteca Wine Bar, Lounge, and Boutique in Beijing. “The mafia boss in some movie would always drink Château Lafite, and it became wildly popular after that.”

As the article notes, despite the huge growth in imports of wine from around the world, most Chinese wine drinkers remain fixated on French reds, particularly Bourdeaux. Indeed, at recent auctions, among mainland Chinese buyers bottles of Chateau Lafite (the nearly undisputed king of wines in China) — not to be confused with Chateau Laffite, as wine blog Grape Wall of China pointed out — have been among the most sought-after by New Chinese [Wine] Collectors. While much of the success of French wines boils down to brilliant French marketing (also a factor in the huge success of their luxury brands in China), it also speaks to the importance of history, pedigree and reputation in the minds of sophisticated Chinese consumers. From the article:

“Seventy percent of our wine is French,” said Zhou Yan, general manager of the Beijing Assai Import and Export Trading Company. “Merlot is our most popular variety, but only because it’s the most expensive and fragrant. The Chinese don’t really understand the nuances of wine.”

Walker chalks up the dominance of French wine to marketing acumen.

“The French are great at selling this romantic vision of French wine,” said Walker, citing the example of Sopexa, the French Ministry of Agriculture’s international food and beverage consulting agency.

As Chinese wine buyers mature and become more confident about buying wines based on personal taste and preference, and drink more wine for pleasure rather than “saving face,” wine importers and sellers in China feel the market will become increasingly vibrant, especially for non-French wineries. No matter how long that takes, the market is expected to keep growing for the foreseeable future, and much like what we’ve seen in areas like the arts and luxury management, more young people are starting to become more interested in wine not only as a beverage but also as a career option:

As the Chinese wine market matures and the average Chinese consumer opens his or her palate (and wallet) to the prospects of wine from countries other than France, many foreign wine importers see nothing but opportunity.

“Chinese wine culture is like a young teenager, while the European market is like a man over 60,” said Ramos. “I’m always so pleasantly surprised by the number of young people here who want to dedicate their lives to wine.”

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