The Chinese alcoholic beverages market shows an increase in imports
In China the alcoholic beverages market includes all alcoholic beverages that are produced by fermentation or distillation, which means 4 segments:
- Beer,
- Spirits,
- Wine,
- Cider, Perry and rice wine.
China alcoholic drinks market is showing an increased interest in imported alcohol beverages. According to Statista, revenue in the alcoholic drinks market amounts to US$220,085m in 2020 and the market is expected to grow annually by 7.4% (CAGR 2020-2023).
- Revenue in the Beer segment amounts to US$61,269m in 2020. The market is expected to grow annually by 9.4% (CAGR 2020-2023).
- The market’s largest segment is the segment Spirits with a market volume of US$125,531m in 2020.
- China Revenue in the Wine segment amounts to US$22,054m in 2020 and the market is expected to grow annually by 12.7% (CAGR 2020-2023).
- Revenue in the Cider, Perry & Rice Wine segment amounts to US$11,231m in 2020. The market is expected to grow annually by 3.6% (CAGR 2020-2023).
China’s ice wine is having considerable success
What is Ice wine?
Ice wine is a type of dessert wine produced from grapes that have been frozen while still on the vine. For a wine to be designated as ice wine, the grapes must be picked at around -8 C.
The sugars and other dissolved solids do not freeze, but the water does, allowing for a more concentrated grape juice to develop.
The grape must is then pressed from the frozen grapes, obtaining a smaller quantity of more concentrated and very sweet wine.
The first ice wine is believed to have been made in Germany in the late 1700s when freezing weather struck before the grape crop could be harvested. The winemaker persisted, harvesting and pressing the frozen grapes and fermenting the juice into a sweet wine.
Because of the strict climate requirements, ice wine production bases can only be found in a few places such as Canada, Germany, and Austria. However, recently, China has also started its own ice wine production in specific areas.
Ice wine in China: From imported products to domestic production
China was the biggest export market for Canada’s ice wine, with over 157,879 liters exported in 2016 with a value of US$6.5 million. Subsequently, the country began to increase its domestic production to meet the growing demand for ice wine from Chinese consumers.
China’s growing taste for ice wine has led to an increase in the number of winemakers producing sweet wine in:
- Heilongjiang, the country’s northernmost province,
- Liaoning province in northern China,
- Yunnan province in southwestern China,
- Xinjiang and Gansu in northwestern China,
- Jilin in northern China,
- Hutai in Shaanxi province.
Ice wine from Jilin province accounts for one-sixth of the world’s total
Ji’an city, in northeastern Jilin province, produces high-quality ice wine, whose production represents one-sixth of the world’s total. The city has the perfect climate for growing wine grapes as the Changbai Mountains protect the area from the cold north wind and the Yalu River brings warm air.
Over the past five years, Ji’an wineries have won more than 36 awards around the world, and their mid-range products now sell for around 1,000 yuan ($ 143) per bottle.
Some local farmers who previously sold wine now sell their homemade ice wine online, as compared to growing grapes, the ice wine business is much more profitable.
Ji’an is now home to 20 wineries and more than 2,500 families are engaged in growing the local grape called Amur, with an annual yield of 20,000 tons. Grapes are supplied to local wineries, as well as famous national wine brands such as Zhang Yu and Great Wall.
Ji’an high-quality ice wine
The grapes grown in this area are called beibinghong, a local variety of Amur grape that can ferment in ice-cold wine without the need for maceration of the skins.
This variety was developed by experts from the Chinese Academy of Agricultural Sciences in 2008 and Ji’an has since developed a complete chain of the ice wine industry covering grape growing, processing, logistics, and sales.
To ensure a sweet taste, local farmers must harvest the grapes in mid-December, when the temperature is neither too high nor too low.
Also, harvesting must be done before the sun rises, as the sun will melt frozen grapes as well.
Since 2016, Kong Qingsen, who operates a local winery, has seen all of the 50,000 to 60,000 bottles of ice wine produced by his winery every year sell out.
There are great opportunities in China for foreign wine producers
With around 40% of Chinese wine imported, there is a huge opportunity for expansion for foreign wineries and distributors.
The market appears to be mature now, which marks the end of more experimental purchases in lower quality products and a shift in the market’s focus toward high-quality wines that serve a more luxury-oriented consumer mindset.
The potential of the Chinese wine market is undeniable. The catchment area on the Chinese continent is so vast that being able to export wine to China allows wineries to significantly expand their business.
However, it should be noted that various producers have tried to enter this market but with poor results or far below expectations. In most cases, this was the result of an incorrect and unsuitable market entry strategy for the Chinese market.
In this article, we will talk about how to promote and sell wine in China, which is the result of our experience in assisting many wine producers and exporters to establish and consolidate their presence in China.
How to promote Wines in China?
The Chinese population is renowned for its love of new technologies. In fact, many can’t do without their smartphones and are constantly using social media. Of the 904 million Chinese who now use the Internet, 897 million people use a mobile device.
What makes this phenomenon even more interesting is the fact that China has banned numerous western social media, including Facebook, Twitter, YouTube, and Instagram. In fact, China has its own social networks:
- Wechat – The main Chinese social network with 1.2 billion monthly active users,
- Weibo – A micro-blogging platform with 520 million monthly active users,
- Douyin – The most used short-video app with 475 million monthly active users,
- Xiaohongshu – The social e-commerce app with 100 million monthly active users.
Promote your wine through Chinese social media
Around 90% of the Chinese population use the internet and Chinese social media not only serves as a way to communicate online, but also as one of the main sources of news and entertainment, shopping advisors, dating channels, and e-payments.
In China, social media as a channel wins more trust from consumers. Consumers believe more in the message they directly communicate on social media, whether via WeChat, Weibo, or Little Red Book posts.
People get a more solid connection to the brand via social media and at the same time brands can reach Chinese consumers and interact with them.
As a matter of fact, companies should develop a good digital marketing strategy on these platforms.
What is the best strategy to promote wines in China?
Consumer awareness and education for the wine brand
Through social media networks like these, wine brands and products can be effectively promoted in China.
Brands should focus on consumer awareness and education for the wine brand. Since the Chinese spend a lot of time on the internet, it will benefit wineries to introduce their brands to them through social media.
In order to amplify the brand’s impact in the Chinese market, companies should involve Key Opinion Leaders and wine and gastronomy experts and organize wine-tasting events.
These experts typically have millions of followers, and thus allow companies to advertise that generates a viral marketing effect.
Influencer and KOL to reach a wide range of wine consumers in China
To stand out in the Chinese wine market, you need to position yourself as a true wine expert. Indeed,
in China, 10% of people influence 90% of the population, so it’s important to partner with influencers or KOLs, who are able to increase your sales by putting you in front of millions of people online.
If influencers don’t fit into your budget, you can demonstrate your expertise by partnering with a wine expert by using him as a spokesperson to tell the story of your brand and wine to appeal to Chinese consumers.
One way to get the most out of your content marketing efforts is to use video, Chinese people are more open to multimedia and more responsive than many other people.
If you want to know more about our digital marketing strategy to promote your wine in the Chinese market, contact us, GMA is a digital marketing agency, specializing in the Chinese digital market.
How to sell wines in China?
The first important step in entering the Chinese market is to decide how to export wine to China. There are several channels and you need to evaluate which is the most suitable for your company.
Companies can:
Rely on a local distributor
It is considered a simple way to sell wine in China as it does not require an upfront investment, exempts the producer from knowing the local market and leaves the responsibility of managing operations in China to the distributor.
However, it is necessary to take into account the disadvantages of this solution which, despite being simple to implement, can easily lead to limited results in the Chinese market.
- Local Sales Representative or Brand Ambassador
Having your own local representative has several advantages:
- Reduced investment,
- Benefit from the network of knowledge and distribution channels already available to the local representative.
- Opening a company in China
Setting up a company in China (WFOE) allows you to operate on the Chinese market with complete freedom by managing imports, sales, and all marketing activities to expand your market. It is not a recommended solution for companies that are entering the Chinese market for the first time or that do not have an established presence in the country. The time and costs for setting up a company can easily be disproportionate to the type of business you intend to carry out.
- E-commerce platforms are now the go-to destination for selling wines in China
E-commerce for wine is developing rapidly in China and with excellent results. Under the impact of the Internet and digitalization, Chinese consumers tend to shop online for everything including wines.
For both domestic Chinese and foreign wine producers, e-commerce is now the go-to destination for selling wine to Chinese consumers.
It is therefore important for wine producers to also explore this distribution channel or establish relationships with the most important platforms for selling wine online.
Learn more about how to sell your wine via e-commerce platforms in China, contact us!
In order to promote your brand and if you have any questions related to how to market your wines by using Chinese platforms, contact GMA now!
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