Posted on March 21, 2017 by China Briefing
By Harry Handley
China’s taste for wine is growing rapidly, and the country is set to overtake the UK to become the world’s second largest wine market by 2020, reaching a value of US$21 billion. According to VINEXPO research, the market is anticipated to grow by an average of seven percent each year over the next four years, with 6.1 billion liters of wine expected to be sold in 2020. Each year a growing percentage of the wine sold in China is being imported from abroad; last year this figure passed 10 percent for the first time.
Customs data shows that in 2016, 638 million liters of wine were imported into China, with a total value of US$2.4 billion – a year-on-year increase of 15 percent in volume and 16 percent in value. This growth is expected to continue, as popularity for imported wine filters down to China’s lower tier cities and wine consumption becomes a more common pastime.
As such, a number of opportunities are presented for both online and offline wine importers. The supply and demand side trends, as well as key considerations for the differing distribution channels and challenges in the market, are all aspects that should be considered by potential entrants.
Demand side – the consumers
In recent years, there has been a significant shift away from the traditional Chinese alcohol baijiu towards wine, and increasingly imported wine. Until now, wines from famous vineyard regions such as Bordeaux have been the favorites of Chinese consumers due to their renowned heritage and prestige.
However, as the market matures, importers are beginning to see a shift in demand towards wines from less well-known regions. Tom Morris, co-founder of Shanghai-based wine importer LaoWines, predicts that increased Chinese tourism to places like South Africa, Australia, and New Zealand, and the subsequent sampling of local wines, will lead to growing demand for these countries’ wines within China.