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Australian wine exporters taking on French rivals in China

www.globaltimes.cn by Wang Jian18/01/2018  

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Illustration: Luo Xuan/GT

In recent years, the performance of Australian wine in the Chinese market has been impressive, competing strongly with traditional wine suppliers such as France. According to China's customs data, a total of 482 million liters of bottled wine were imported in 2016, with a total value of $2 billion. Australian wine took a large share, with exports of Australian wine to China in 2016 increasing by 40 percent year-on-year in terms of volume. 

In 2016, the market share of Australian wine in the Chinese mainland reached 25 percent, ranking second only to the figure of 45 percent for French wine, according to industry data. And the situation could soon improve further given that import tariffs for wine are set to be reduced to zero in 2019 under the China-Australia Free Trade Agreement (ChAFTA). With the rapid expansion and development of China's wine market, Australia could soon surpass France to become China's wine market leader.

As most Chinese customers are relatively new to wine, the taste of Australian imports is perhaps more suitable than that of distinctive and subtle French wine. Like other New World wines, Australian wine has a pleasant fruity fragrance, with strong aromas of cherry, blueberry, blackcurrant and blackberry, and it also has only moderate acidity.

With the rapid development of logistics, e-commerce and the national economy, the wine market in China has been growing quickly. In the first half of 2017, China imported about 254 million liters of bottled wine, a year-on-year increase of 13.9 percent. 

In addition to the quantitative growth, changes can be seen in consumption habits, as drinking wine is no longer just a label for a high-end lifestyle in China. It has gradually become something genuinely desired for personal consumption, as well as an item for business banquets and the giving of gifts.

And there are other favorable conditions for Australian wine compared to more traditional producers like France. For instance, people in China are inclined to buy wine from chain stores or through the internet, and Australia has well established distribution channels in these areas. Also, large-scale wineries in Australia are integrated in production and marketing. Compared with the Old World wineries, Australian companies have advantages in terms of scale and larger budgets for marketing.

European countries still hold a large share of the Chinese wine market. Their charming historical traditions, elegant brand culture and near-perfect brewing process are still attractive to some of the high-income population in China. But Australian wine is undoubtedly a coming force.

At present, the wine market in China is showing diversified and rapid development. For international wine brands all over the world, there are opportunities in China that are worthy of exploration.