China’s relationship with wine during the coronavirus lockdown appears to have changed – for the better. Now that the country is easing restrictions, might this be a breakout moment for the wine category?
China was the first market to experience the coronavirus crisis and consequent dramatic changes to lives and lifestyles. This market is therefore more interesting than normal. Our recent research there tells us something about the prospects for wine producers selling into this important and growing market; it also gives us some sense of the future for other markets who experienced the coronavirus later (or as in the US and Brazil, are experiencing it very much in the present as I write this).
China’s 50 million or so upper middle class imported wine drinkers, largely based in Tier 1 cities but increasingly found in Tier 2 and 3 cities as well, have broadly responded to lockdown and associated restrictions by doing similar things as other markets. They have been buying a bit more still wine on the whole, while cutting back on other beverages, chiefly spirits and to a lesser extent sparkling wine (which isn’t a big drink in China to begin with).
However, China is showing some crucial differences. While in other global markets consumer wine purchases have gone up but spend per bottle has fallen, Chinese drinkers said they increased their buying frequency overall for informal non-food occasions, and also spent a bit more per bottle for this type of occasion. The online retail channel appears to have taken the lion’s share of these new purchases, with over half of respondents saying they have bought wine via an online retailer more often during this period.
As with other markets, the drinkers leading the charge into wine have been those more connected to the category to begin with. In China’s case, the consumer segment at the heart of the positive move into wine are the more affluent, Millennial, urban types who are culturally very international in their outlook. Encouraging for major production countries who sell to China, these individuals have not really cut back on spending either, and many have connected with some new wine drinking occasions. Our data suggests that approximately 30 million Chinese caught up with friends online with a glass of wine in hand during the past week, with this affluent Millennial segment leading the way.
When asked about their intentions once the virus lockdown ended, sentiment seems to be against going on vacations abroad and attending crowded events. However, while some respondents expressed caution about going out to bars and restaurants immediately after restrictions were eased, on balance more said they would be more likely to go out to eat (38%) than less likely (34%). In all other markets polled by Wine Intelligence, the balance of sentiment among consumers has been against visiting restaurants after lockdown.
When comparing the responses from China’s imported wine drinkers with other markets, one is struck by the more optimistic attitudes exhibited by the Chinese respondents. They are more willing, and keen, to resume their pre-lockdown lives and lifestyles than, say, Americans or Australians, and do not seem as cautious about getting on a plane or going to a restaurant.
Part of this difference may be cultural: over the past decade or so of our research work in China, we have noticed that consumers tend to be more positive and enthusiastic than their western counterparts. However, it could also be one of timing. Unlike other markets, where our surveys were collecting interviews during the peak of the lockdown, in China’s case the restrictions were easing significantly as we were doing our fieldwork.
As other markets slowly emerge from this initial virus wave, the world wine industry will be encouraged to see more of this kind of optimism from other markets.