China’s e-commerce giants are selling some of Bordeaux’s most prestigious wines at prices traditional merchants say they simply cannot match.

Alibaba’s Tmall and JD.com are offering classified growths at prices approaching – and in some cases potentially below – merchants’ sourcing costs, adding fresh pressure to a Bordeaux market already struggling with weak demand and excess inventory.

The consequences are beginning to show. Some Chinese wine merchants are walking away from classified Bordeaux altogether, saying razor-thin margins no longer justify stocking or promoting the wines.

What looks like a bargain for consumers is exposing a deeper problem for Bordeaux: when everyone can see the lowest price, who still has an incentive to sell the wine?

How Low Can Bordeaux Go? 

A review by Vino Joy News found a number of Bordeaux classified growths being offered at unusually low prices through Tmall Global, Alibaba’s cross-border e-commerce platform, including its self-operated store and Tmall Global wine shop.

Several importers with offline distribution businesses said the prices were already close to cost – and, in some cases, below what they themselves could pay to source the same wines.

Take Chateau Lafite Rothschild, arguably the most recognizable Bordeaux First Growth in China.

The 2011, 2021 and 2023 vintages were each listed on Tmall Global at RMB 3,967 (US$590) a bottle. Wine-Searcher puts their international average pre-tax prices at US$654, US$770 and US$560, respectively.

Other classified growths showed similarly aggressive pricing.

Chateau La Tour Carnet, a Fourth Growth popular in China, was offered at RMB 195 (US$29) for the 2022 vintage, compared with an international average pre-tax price of US$35 on Wine-Searcher. Third Growth Chateau Lagrange was listed at RMB 249 (US$37.03), versus an international average of US$62.

The pattern was also visible on JD.com.

At JD.com’s self-operated cross-border store, Chateau Cantemerle 2023 was priced at RMB 178 (US$26.47), compared with Wine-Searcher’s international pre-tax average of US$30. Chateau Langoa Barton 2017 was offered at RMB 259 (US$38.53), versus an average of US$57.

For traditional importers operating through conventional distribution channels, competing with such prices is becoming increasingly difficult.

Why Cross-Border E-Commerce Can Sell So Cheaply

There is an important common denominator behind these listings: all were sold through cross-border e-commerce.

The channel enjoys preferential tax treatment in China, giving wines imported this way a cost advantage over those entering through conventional general trade.

Under existing regulations, wine sold through cross-border e-commerce retail channels is subject to a lower overall tax burden of just 17%, much lower than the 42% taxes imposed on wines imported through general trade.

There is a trade-off. Cross-border e-commerce is designed for direct sales to individual consumers, meaning products imported through the channel cannot subsequently be moved into the general-trade system for further distribution.

For platforms such as Tmall and JD.com, however, that limitation matters less. Both have access to enormous pools of consumers and can sell directly to them, bypassing many of the layers found in traditional wine distribution.

Their scale also gives them another advantage: purchasing power. Large orders can allow the platforms to negotiate more competitive prices from upstream suppliers.

But tax and scale explain only part of what is happening.

Passerbys walking by a poster featuring top Bordeaux estates (pic: Getty Image)

Bordeaux Merchants Are Also Dumping Stock

The unusually low prices appearing online are also a symptom of a much broader problem confronting Bordeaux: too much wine chasing too little demand.

A prolonged downturn in the global wine market has left merchants under pressure to reduce inventories and generate cash, prompting some to sell wines at deep discounts.

Vino Joy News shared the Tmall and JD.com listings with Wu Xianghua, CEO of Fine West, a Chinese fine wine importer that has developed a system to track Bordeaux release and secondary-market prices in real time.

After reviewing the prices, Wu said that even where the wines were not technically being sold below cost, some were already extremely close to it.

Wu Yunping, president of the Shenzhen Wine Association and a wine merchant who also operates in the cross-border e-commerce market for Bordeaux classified growths, said several forces are driving the discounts.

Some platforms are subsidizing products, he said, while merchants facing inventory and cash-flow pressure are willing to sell at steep discounts simply to move stock.

That means finding Bordeaux on cross-border platforms below prevailing market prices – or even below cost – is no longer particularly unusual.

Wu Xianghua cautioned that the Bordeaux market has become so disorderly that “cost” itself is increasingly difficult to use as a meaningful pricing benchmark.

When cash flow becomes the priority, merchants may willingly take a loss. In that environment, even prices that appear unsustainably low can emerge for periods of time.

Offline Merchants Are Walking Away

For traditional merchants, the consequences are becoming increasingly apparent.

Bordeaux classified growths were never necessarily high-margin products. Their prices are widely known, their distribution is broad and the market is relatively transparent, leaving limited room for markups.

The rise of cross-border e-commerce has intensified those pressures.

Platforms such as Tmall and JD.com can combine streamlined distribution, purchasing scale, preferential tax treatment and aggressive pricing in a way that traditional B2B importers struggle to match.

Fine West has already stopped buying Bordeaux en primeur over the past two years.

Wu Xianghua argues that the economics are becoming increasingly difficult for traditional importers that rely on selling through distributors and retailers.

Every additional layer in a conventional distribution chain needs a margin. By contrast, cross-border platforms can buy at competitive prices and sell almost directly to consumers while benefiting from a lower tax burden.

“The platforms benefit, while everyone else suffers,” Wu said. “It’s a case of bad money driving out good.”

He warned that the consequences could ultimately rebound on Bordeaux itself.

“There are clearly fewer importers and distributors dealing in Bordeaux classified growths now,” Wu said. “That means Bordeaux merchants have fewer sales channels, leaving them increasingly at the mercy of platform pricing.”

“When en primeur can’t be sold and wineries begin running into financial difficulties, that becomes the starting point for further price cuts.”

The retreat is already visible among offline retailers.

Changsha Puyi Fine Wine, one of Central China’s more established fine wine merchants, has largely stopped actively promoting Bordeaux classified growths.

“A few years ago, if a customer came to me looking for wine, Bordeaux classified growths might have been the first thing I recommended,” CEO Fang Yi said. “Now, unless a customer specifically asks for one by name, we won’t sell it. We won’t even bring it up.”

For Fang, the calculation is straightforward.

“There’s no reason to sell a product that doesn’t make money.”

The company still carries a small selection of Bordeaux classified growths because some restaurant clients have regular demand, but inventories are deliberately kept low.

“For some wines, we might keep one or two cases,” Fang said. “For the expensive ones, perhaps just one or two bottles.”

Is Bordeaux’s Distribution Model Part of the Problem?

For Fang, today’s pricing crisis is not simply the result of weak demand or aggressive e-commerce platforms. It also exposes a structural weakness in the way Bordeaux has traditionally sold its wines.

The same wine can be supplied to numerous merchants, each competing to sell an essentially identical product.

That model was workable when pricing information was harder to obtain, Fang argues. In today’s hyper-transparent market, it can become self-defeating.

“A distribution system where the same bottle can be sold to many different merchants worked when information wasn’t so transparent,” he said. “But in today’s environment, that system makes everything too transparent – and when it becomes too transparent, serious problems emerge.”

The danger, he argues, is that merchants simply lose the incentive to sell Bordeaux.

“Wine still needs the trade to push it,” Fang said. “If everything is so transparent that merchants have no incentive to promote the wines, how are you going to sell them? You can’t expect consumers simply to go out and buy everything themselves.”

In other words, the very transparency that benefits consumers may be eroding the commercial incentive for merchants to stock, recommend and promote the wines.

Combined with weak demand, that structural problem is adding another layer of pressure to Bordeaux prices.

Does Bordeaux Need a Reset?

Wu Xianghua believes the current model needs to change.

At the heart of the problem, he argues, is a fundamental imbalance between supply and demand. One solution would be to reduce production, tightening supply and helping restore stability to prices.

“The pricing disorder we see today is fundamentally a supply-and-demand imbalance,” Wu said.

“Bordeaux merchants helped expand Bordeaux wines into markets around the world, which encouraged production capacity to keep growing. Once cracks emerge in the market — whether because consumer attitudes change, economic problems arise or prices become too high — the system breaks at its peak and a new order has to be established.”

Wu Yunping takes a less structural view.

He believes much of the current pricing pressure reflects weak economic conditions and subdued consumption rather than a permanent breakdown of the Bordeaux model.

“This is only a transitional period,” he said. “Because the market is weak, we’re seeing special prices in cross-border e-commerce mainly because merchants want to clear inventory and recover some cash flow.”

As demand eventually recovers, he believes more normal commercial conditions – and healthier margins – could return.

“As long as the market remains weak, this situation could continue,” Wu said. “But as conditions gradually improve and business returns to normal, reasonable margins should return as well.”

China’s wine trade itself may also be undergoing a shakeout.

Wu noted that relatively low barriers to entry attracted large numbers of operators to the wine business during stronger market cycles. As more discover there is little money to be made and leave the industry, he expects competition to become more rational and pricing to gradually stabilize.

For Bordeaux, however, the immediate dilemma remains: lower prices may help move bottles today, but if they leave merchants with no incentive to sell them tomorrow, the long-term cost could be much greater.