Suppliers must educate Chinese wine drinkers to achieve full market potential, says IWSR
Wine suppliers looking to capitalise on the staggering growth of wine imports into China face a major challenge in educating Chinese consumers if the full potential of the market is to be achieved.
This was the conclusion of José Luis Hermoso, head of research at International Wine & Spirit Research, who was speaking at a seminar looking at the future of the Chinese wine market up to 2020 at this week’s Vinexpo.
He said importers in China have made some attempts at educating Chinese customers about wine, but it needs a more concerted effort. “Part of the success of wine as a product can be seen as a result of the success in wine education by these importers,” he said.
The other key challenges facing wine suppliers in China include: managing their expectations in what is a difficult country to do business; keeping up to date with changing regulations; and hiring and then retaining local skills and talent.
“People with knowledge of the wine trade tend to change companies often,” said Hermoso, who added the companies who succeed in China will be those that are able to keep hold of the key local people.
Imported wine made up 17% of the Chinese market in 2012, up 55% since 2003, according to IWSR. China’s share of wine imports across Asia is now 46%, overtaking Japan as the number-one country for imported wine.
But the majority of wine importers and distributors are not working as efficiently as they could in China. In 2011, for example, 85% of importers brought in less than 10,000 cases of wine. The market has been plagued with “inexperienced wine distributors looking for short-term profit strategies”, said Hermoso.
France is the lead country for wine imports in China, followed by Australia and Spain. In 2012, 48% of wine imports in China were French, while only 10% were Spanish.
Hermoso said it was “a nearly impossible task” to predict the future in China, but estimated wine imports would continue to increase with low double-digit growth, offset by a a slight decrease in domestic growth.