How to face local competition in wine market in China?
Already being the biggest wine market in the world, China will also be the world’s biggest wine producer in four years, according to a withe paper from France’s National Center for Scientific Research (CNRS). Historically speaking, the long existence of Chinese wine such as Moutai or Wu Liang Ye has shown a stable passion for wine in China. However, it is when the foreign wine came into Chinese market during the urbanization of this country that a large variety of wine emerged on the China market. Then, for few years, the interest of Chinese consumer for wine consumption has been growing in a spectacular way and both foreign and local producer try to take advantage of trend.
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Strong consuming power of wine market in China
The most evident growth among all factors is the consuming growth of 290% in the last decade from 246,9 ML to 946 ML. The export of foreign wine to China increased from 12,5 ML to 162 ML (1196%), nearly doubles the number once a year. Due to the large population, the consumption per capita is still low (1,12L) compared to that of France (54L) and Spain (49L). Thus, the foreign wine companies are still convinced to further export wines to China.
Strong producing competition in wine market in China
However, the foreign producers will have to face fierce competition from the local market. Such an amazing consuming power needs an equivalent producing power to balance. The annual production of wine increased from 85 ML in 1970s to 1450 ML in 2011, and is expected to have an over 200% from 2011 to this year. In effect, the vineyard investment in China is also growing rapidly, in accord with the tremendous need. China will, by no doubt, double its vineyard land over the next five years. Most of China’s emerging vineyards are located in the country’s western regions, in places like Ningxia, Sichuan, Xinjiang where the economy is poor compared to coastal regions, it is economically driven because the climates are drier and with low precipitation. Besides the economic factor, there exists also government project such as the one in Xiaojin County in Sichuan Province, transforming it into a vineyard to rival Bordeaux in France.
Tips for foreign wine companies entering Chinese market
Competition in wine market in China are quite fierce. However, for foreign producer, there is still some opening to etablish their wine in China market. Chinese are more likely to buy a brand with good reputation; therefore their willingness to pay is quite high. The gift-giving culture makes Chinese to purchase wine of higher reputation to gain face. Thus, brand recognition is very important in Chinese market. More than half of Chinese get access to the information of foreign wine through Internet, the online promotion in cooperation with local social network sites and local retailers should also be considered seriously.
Generally speaking, branding strategy is crucial when it comes to enter China market, even for wine selling. As Wine culture is still very young in China, most of consumers do not have strong knowledge of this consumption. To establish your production has a reference and a high-end gift will insure you to reach many consumer. Also, educative program such as wine testing is a great way to develop your brand awareness in China, as well as the loyalty of your prospects.
To conclude, cause of the rising trend for wine, China has a lot of wine exhibition where you can introduce your production and extend your network to sell in China. See more information here.
See more about wine consumption in China