In China there are 38 million wine buyers, and most of them prefer French wine. One third of wine purchases are made via Alibaba through its Tmall platform, a B2C (business-to-customer) site that hosts around ten thousand different brands.
The Wine Market in China
The development potential of the wine market in China is considerable, since 2016, French wine exports to China increased by +8.9% in volume and +9.9% in value.
Including Hong Kong, China is now and since 2014 France’s third largest wine customer, ahead of Germany and after the United States and the United Kingdom.
In the same year, France exported €1.39 billion worth of alcoholic beverages to China and Hong Kong: €942 million worth of wine and €450 million worth of spirits, according to the French customs and Business France.
Due to the increasing wealth of the middle class, Chinese consumers have increased their purchasing power and want to buy new and better-quality beverages.
This is why foreign brands are becoming more and more popular.
The Chinese middle class shows a pronounced taste for imported wine and especially French wine, which is very popular, supported by specialized sales networks (supermarkets, online shops and specialized distribution) that encourage home consumption, and by out-of-home catering, a very dynamic segment that has always been in China.
The current situation of the wine market in China
In 2018, wine exports to China fell by 14.4% to €1 billion after a 24.5% growth the year before.
This decrease was offset by an increase in exports to Singapore with €901 million and to Hong Kong with €556 million (+12.3% growth). These two cities are considered as the logistics hubs to supply the Chinese market. So when taking into account exports to Hong Kong and Singapore, the Chinese market remains almost stable.
In China, nearly one third of the imported wine bottles are French.
Today, the consumption of imported wines is no longer limited to large Chinese cities such as Shanghai, Beijing, Canton or Shenzhen.
The Home Consumption
The key to increasing the level of consumption will be to monitor and support the growth of home consumption in so-called secondary and tertiary cities, particularly through online sales.
Selling in second-rate cities
Despite strong demand for China’s 4 main cities, second-tier cities are not insignificant.
More than 150 cities in central China have more than one million inhabitants, and competitiveness in second-tier cities is still relatively low. Therefore, second tier cities offer good export opportunities.
The most popular wines in China:
– Fruity wines are the most consumed
– Aromatized white wines have great growth potential
– Sparkling wines (especially sweet wines) have become very popular
How to export wine to China?
The middle class and part of the young population (18-30 years old) have begun to appreciate foreign products and wine is no exception, which gives great opportunities to foreign exporters.
But it should be noted that wine is considered as one of the most regulated food products in China. Therefore, it is important to be aware of the local standards that apply and understand the export process before exporting these products to China.
Basic and cheap wines with modern labelling have become very popular. That being said, expensive wines will also be in high demand as more and more Chinese people become interested in the art of wine, using it as a way to improve their social life and expand their professional network with the “right” people.
Follow these processes to export wine to China:
1) Ensure that the product complies with Chinese standards
2) Sign an agreement with a Chinese importer
3) Register your company at AQSIQ
4) Register your trademark
5) Information to be specified on the label
6) Choose the right distribution channels (physical and / or online)
The online purchase
According to a report on online beverage consumption data jointly published by CBNData and Tmall in 2018: “From the perspective of the online alcoholic and other beverage consumption group, post-90 and post-95 youth consumer groups are gradually becoming the main driver of online beverage consumption and have characteristics of diversification, personalization and convenience.
In China, about 20% of the wine sold in the country is sold online and 55% of Chinese buyers say they plan to buy their wine online. In addition, also it will be necessary to take into account young consumers who have planned to buy more alcoholic products on the Internet.
Therefore, e-commerce platforms are the best way to market your wine in China. Online shopping is easy and cross-border e-commerce platforms offer a wide range of alcohol varieties: this is what Chinese consumers are looking for.
Wine consumers can now easily obtain wine through their smartphones but also enjoy a very good shopping experience on applications.
For many wine consumers, it is difficult to choose among the wines on offer because of the language barrier or simply because of their limited knowledge of wine.
But since in China there is an application for every problem: the Kaola application has appeared. With its image recognition technology, the application allows users to scan a barcode or the brand of the bottle and all information about the bottle appears on their phone. The application also allows you to compare the price of the bottle in all available stores to get the best prices.
Unlike Western consumers, Chinese consumers are not reluctant to buy one or more bottles from sites such as Ele.me or Tmall, even if they have not tasted it before. A modern bottle with a pleasant description is enough to convince them.
The largest e-commerce platforms are JD and Tmall but they are closely followed by smaller but very popular sites such as Yihaodian and Kaola.
JD.com: The largest online wine sales platform
The e-commerce platform held its 3rd International Wine Festival in early May in Beijing.
JD.com is the leading online wine buying platform, in addition to its next-day home delivery services, the platform extends its official partnerships with leading wine brands, which guarantees consumers authentic and good quality wines.
Tmall is the BtoC e-commerce platform of the Alibaba group, which hosts around ten thousand different brands. The development potential is considerable for wine exporters who wish to market their products in China.
In 2017, at the Vinexpo international wine and spirits exhibition in Bordeaux, a 4-year collaboration was signed between Tmall and Guillaume Deglise (Vinexpo’s Managing Director).
Wine Exhibition in China
This collaboration includes the development of marketing and communication actions, and the promotion of biennial exhibitions on all Alibaba platforms (e-commerce and social networks). This collaboration to boost wine sales in China is proof that this market is increasingly flourishing and that many opportunities remain to be seized.
Sébastien Badault, Director of Alibaba in France, says that on some events “up to 17 billion dollars of sales were recorded in one day and last year, 500 cases of Lafite were sold in five minutes”.
Yihaodian: Online grocery shopping
Yihaodian is a Chinese online grocery store founded by Gang Yu and Junling Liu in July 2008.
Yihaodian is a BtoC e-commerce site that offers consumers the opportunity to purchase all kinds of food products directly online.
Yihaodian has virtual stores that display images of grocery store shelves stored on walls and other surfaces in urban public areas in China, where passers-by can scan codes under the images with a mobile device to purchase the corresponding food products. Retail giant Walmart invested in Yihaodian in 2011, before announcing an additional investment in 2012. Three years later Walmart bought the entire application.
The online sales portal Kaola.com, has become one of the most dynamic websites in China where Chinese consumers can purchase foreign branded products.
Kaola.com’s main objective is to sell a large number of high-quality foreign products to nearly 150 million middle-class Chinese consumers through an e-commerce site that is in direct contact with consumers.
Unlike its competitors Alibaba and JD.com, the site focuses on high-end products.
Since 2016, Kaola has presented more than 3,000 brands, with more than 2,000 products from nearly 70 countries and regions to Chinese buyers.
Need help to integrating one of these e-Commerce platforms?
Entering the Chinese market through social networks remains the most effective way to promote it (Weibo, WeChat, Tmall, JD.com).
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