Riding the Aussie wave in China
Imported wine consumption continues to rise in China with strong-performing Australian wine, according to the Wine Intelligence China Landscapes 2018 report
2017 marked another year of success for imported wine in China. Although the total volume of still wine consumed in China dropped by 2%, the volume of imported wine grew by 15% compared to 2016, with most wine-producing countries significantly increasing their exports to China. By contrast, domestic wine volumes continued to decline, with market share dropping from 80% in 2013 to only 61% in 2017 (source: The IWSR).
Amongst these imports, wines from Australia seem to be making a particular mark in China. Consumer feedback obtained from Vinitrac® China has confirmed Australia’s position as a leading imported wine source country – it has the second highest awareness and consumption levels after France. More specifically, 53% of urban upper-middle class imported wine drinkers in China are aware of Australia as a wine-producing country while 36% have drunk wine from Australia in the past six months.
The report reveals the list of the most powerful wine brands in China. Domestic brands Changyu and Great Wall have the highest overall scores among all the brands tested in 2018, thanks to their highest “awareness” and “purchase” Index among all the brands. Brands from Bordeaux might have been more prominent six years ago when imported wine was primarily associated with gifting and business occasions, however as the market is shifting towards personal consumption, more imported wine brands from different countries are building their presence in China and connect with their audiences.
Based on a combination of consumer reported brand health measures, Lafite, Yellow Tail and Penfolds have the highest Brand Power scores among all the imported wine brands tested in 2018. Yellow Tail is the only brand tested that has improved significantly on all the brand health measures since 2015. Penfolds has the highest “connection” index among all brands tested, reflecting the fact that it has the highest affinity rating of all brands in China and the second highest recommendation level. The positive performance of Australia’s brand champions certainly helps improve the country’s overall image as a source of quality wine.
The retail landscape has seen the continuing shift to online wine purchasing. Although the proportion of consumers who shop for wine online (48%) has not increased in the past year, the declining use of bricks-and-mortar channels such as hypermarkets and department stores show e-commerce is continuing to gather momentum. The retailer usage confirms this trend with JD.COM (42%) surpassing Walmart (35%) to become the retailer with the highest proportion of wine drinkers to purchase wine from for the first time in the Chinese market. Its rival, Alibaba’s Tmall (33%), ranks third.
In contrast to established wine markets, China hasn’t seen the prevalence of certain drinks trends with sparkling and rosé wines remaining minority categories. The return on investment potential for organic wine, lower-alcohol wine, and wine in smaller packaging formats is also currently marginal in China.
Author: Chuan Zou