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China world’s new wine hot spot

shanghaidaily.com by shanghaidaily23/06/2017  

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WITH a middle-class increasingly thirsty for reds, whites and Italian bubbly, China is the hot ticket for wine traders looking for opportunities at this year’s Vinexpo industry extravaganza.

The world’s most populous nation has for years been seen as an El Dorado for foreign winemakers — but those hoping to cash in need to keep up with continuing rapid transformations in the market, including the rise of online sales, say analysts at the four-day global wine gathering in Bordeaux.

“Just forget everything you knew about this market,” influential Chinese wine blogger Terry Xu told an event at Vinexpo in the southwestern city that is the capital of France’s wine industry.

Chinese buyers previously saw wine primarily as a prestigious gift to give to others, experts say — but that’s changing, with personal consumption growing at break-neck speed.

“Today we’re dealing with the final consumer. People are buying wine to drink themselves,” said Gregory Perret, marketing director of importer French Wine Paradox, which specializes in mass distribution in China.

The number of Chinese drinkers consuming imported wine more than doubled from 19 million to 48 million between 2011 and 2017, according to a study by consultants Wine Intelligence.

And by 2020, China — already the world’s fifth-largest consumer of wine and fourth-largest importer — is set to represent 70 percent of growth in the market by volume, according to another study by Vinexpo and industry analysts International Wine and Spirit Research.

Chinese wine professionals make up the biggest foreign contingent at this year’s Vinexpo, which alternates every year between Bordeaux and Hong Kong.

And wheeling and dealing at the fair, which generates 50 million euros (US$56 million) in direct business and twice that in knock-on benefits, got off to a high-profile start on Sunday with the signing of a partnership between Vinexpo and Tmall, the online sales platform of Chinese e-commerce giant Alibaba.

Youngsters in the upper middle-class are among those driving changes in Chinese attitudes.

“Younger consumers are really changing, and they change the behavior of the market,” said Chuan Zhou, a researcher at Wine Intelligence.

Among the cultural factors boosting consumption, he pointed to Chinese millennials’ growing travels abroad to wine-producing regions — in France and Italy, for example — as well as their insatiable need “to put the most amazing photos on social networks.”

The market is not only booming, but diversifying, with Chinese drinkers increasingly keen to sample new varieties from different countries.

“Georgia, which arrived on the market four years ago, now ranks tenth,” notes American wine journalist and consultant Debra Meiburg, who has been based in Hong Kong for decades.

Aline Bao, director of fine wine purchasing and e-commerce at Chinese state-owned food giant COFCO, said there was “more and more demand for white wines, especially top wines.”

“Two or three years ago, people bought cheap wines or bigger brands,” she said. But over the past two years Chinese drinkers have flocked to mid-range labels.

Terry Xu, for his part, noted that sparkling Italian muscat has been a big hit in the Middle Kingdom lately.