There is no Chinese wine market
When first entering the Chinese market 5 years ago, my thinking was how big it is. After lots of events, consulting and education around China, I changed my thinking: There is no Chinese wine market. Before now many people of the wine business climb the barricades and make wild posts on social media platforms about this story, let me describe what I experienced over the last years.
First time to visit China it was Guangdong. Most of the wines on events and tastings I never saw before. Having a closer look at the labels not always gave me a clearer information about which winery was responsible for this. The first thought was small individual wineries. Everybody was talking about the biggest winery in the region, country or the world. Like this, I realized the major goal of a wine for the south Chinese market: Global players with the potential to create own brands and not making them comparable. Some wines had after evaluation a possible exwork price of under 3 euros. Nevertheless, the importer sold the wine for 800 RMB and the next vintage theyscheduled at over 1,000 RMB. Relation to the quality of the wine? Not existing!
Next careful steps led me to arrive in Beijing and having great dinners with wine importers drinking spirits rather than wine. The first feeling was a clearer structure, as well in business style and in traffic. Coming from a clearly structured country, I am German, to traffic in China, was a shock. In Beijing, crossing the road did not give me the feeling to lose my life within the next seconds, like in the south. Nevertheless, how about the importers and distributors? Great people looking for high-class wines, famous brands and good quality price ratio. Confusing to me was everybody always telling me that I did not understand the Chinese market. Completely being aware of this, I wondered why this was so frequent. Having this situation again and again and again slowly I figured out what it meant: The price is too high and the marketing support too low. Instead of getting a clear indication of the business partners, they talked around the topic. Common situation in China and the way to make conversation. Main goal I found at the beginning was to use famous wines and add in blind tastings pirates. Much cheaper, absolutely not comparable, but impressing clients because of “beating” well known wineries in expression. Like this it was easily possible to sell wines for example from Chile, at a relatively high price, as they tasted more intensive as for example first growth of Bordeaux.Now to work in China without any Chinese language skills means to work with a translator. As we do in Europe translations for the wine business, I was looking for someone to know the terms and specific language. The person travelling with me as support to cover the language gapwas from South China.This showed me that even within China there are big differences. In conversation both using Mandarin; they were still not speaking the same language. However, at the end we solved my missing understanding of the Chinese market.
Next stop was Shanghai. Wow, this is like Hollywood for the wine business. Famous people of the Chinese wine scene heading from wine presentations to wine dinners in famous restaurants. It seems that wineries and official representations of winegrowing countries and regions head to Shanghai to feed opinion leaders and wine media. If the opinion leaders are not on official presentations and dinners, they might give a Master Class about important winegrowing regions like Bordeaux, Burgundy or famous wineries. Alternatively, traveling around the world invited by official organizations to visit famous places of wine making. In addition, this is the next big difference in Shanghai: An outstanding amount of wine schools and event locations. Education is a big market covered by few education systems and many cooperation partners offering them. At the same time, this is my biggest concern: Mostly this kind of education generate wine professionals and wine experts. Important for increasing wine knowledge and working in the wine business. How about the ones to buy wine and spread enthusiasm for this culture?
The impressions I collected over a period of, as mentioned above, 5 years. Is it still like this? Yes. Is it changing? Yes. On one hand travelling through China I still face this situations and business behaviors. At the same time, I find more and more wine lovers and people interested in wine coming from other sectors than the wine business. An increasing amount of people wants to enjoy wine and gain experience. At the end, it is about finding their own enjoyment and share it with friends. Theyarein my opinion the target for the near future. Many wine distributing companies are still focusing on selling wine to big clients and officials, which got more and more complicated due to changes in politics. These clients are the ones to consume big amounts of wine in short period and pay high prices. The ones to generate a stable market over a long period are wine lovers and wine drinkers, enjoying wine. Focusing on these clients will create an increasing wine market but also request trained people with passion for what they are selling or describing on wine selling apps.
China is big, colorful and continuously changing. Heading the wine market in China means to be open minded, listen to people and find the right clients for what I am producing. Not everybody in China might like the same wine, as the taste is changing from North to South. To find the right partners means to invest time, try different regions and listen to final consumers.
One thing is for sure: Entering the Chinese market is a big adventure with many new impressions and many things to experience. Do not miss it!
-Jörg Philipp, Degustar International Wine Consultants-