10 Trends in the Chinese Wine Market for 2013 www.chinawinesolutions.com
10 Trends for the Chinese Wine Industry in 2013
10 Trends in the Chinese Wine Market for 2013 www.chinawinesolutions.com
Introduction China Wine
Solutions
Now officially in the Chinese New Year, we take 5me to recap our predic5ons for
the Chinese Wine Industry in 2013.
In the following presenta;on we briefly outline 10 trends we believe will shape the
Chinese wine industry over the next 12 months.
To con;nue the discussion join us on TwiDer (ChinaWineViews) and LinkedIn
(China Wine Insight).
10 Trends in the Chinese Wine Market for 2013 www.chinawinesolutions.com
1. Market Consolidation China Wine
Solutions
The current number of wine sellers in the Chinese market is unsustainable. 2013 will see see hard
trading 5mes for most and many will exit the industry en5rely.
According to Radobank, there were 3,863 wine importers in 2011 (and that doesn’t account for the 100’s of unofficial
ones), up 73% from 2010 and up 200% in 5 years. Even in a market the size of China, this number is unsustainable.
Just in the last few weeks, Dynasty, one of China’s largest domes;c wine companies, posted a profit warning amongst
difficult trading condi;ons. The take away from writer Doug Young of the South China Morning Post was ‘A new profit
warning from Dynasty reflects a burs;ng bubble in China’s overheated wine industry, with a major consolida;on likely
to start in the second half of this year’.
10 Trends in the Chinese Wine Market for 2013 www.chinawinesolutions.com
2. Changing Expectations China Wine
Solutions
China will no longer be seen as a quick win market.
As compe;;on becomes increasingly fierce, the ;me for easy sales and high margins is rapidly becoming
a thing of the past. In recent years, China has been seen by many as the answer to falling margins in
more mature markets.
However, biDer experience is teaching many wineries that doing business here involves a significant
learning curve, high costs and o_en lower than expected volumes.
10 Trends in the Chinese Wine Market for 2013 www.chinawinesolutions.com
3. Increased Commitments China Wine
Solutions
As expecta5ons change and compe55on increases, wineries will move to take a more ac5ve approach
in the market.
ADemp;ng to beDer understand market trends, establishing a local presence and increasing ways in
which they can engage and influence key stakeholders are already becoming increasingly common.
As part of this, 2013 will see more foreign wineries move to create a presence on Chinese social media.
Companies across various industries are finding social media to be an effec;ve channel to find and
engage their target audience; the wine industry is no excep;on.
10 Trends in the Chinese Wine Market for 2013 www.chinawinesolutions.com
4. Online Coming of Age China Wine
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Online wine retailors will con5nue to increase their influence as a major sales channel.
According to Wine Intelligence, the two major online wine retailors are currently Yesmywine.com and
Tmall. They point to two reasons behind the growth of online sales; improving technology and the ability
for trusted online retailors to reduce concerns about fake wines.
We’d add a third; the closeness of the online world to consumers. The future wine market in China rests
with the younger popula;on, a popula;on whose day-‐to-‐day life is seamlessly integrated into the online
world. For these consumers, buying online not only allows for quick price comparison, access to
informa;on and user generated reviews but represents a natural and convenient solu;on that fits with
their busy lifestyles.
10 Trends in the Chinese Wine Market for 2013 www.chinawinesolutions.com
China Wine
Solutions
2013 will see con5nued diversifica5on in the tastes of consumers in core markets such as Beijing,
Shanghai and Guangzhou.
Last summer saw a surge in sales of white and sparkling wines fueled mainly by the increasingly
important female segment. 2013 will see this trend con;nue as well as increasing aDen;on paid to
bou;que wines from non-‐mainstream regions. The Chinese wine lover, especially those aged under 35,
love to experiment with wines and are increasingly looking to less mainstream op;ons.
5. A More Sophisticated Consumer
10 Trends in the Chinese Wine Market for 2013 www.chinawinesolutions.com
6. Tier 2 & 3 Cities China Wine
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Following the trend in Tier 1 ci5es, the wine market in China’s 5er 2 ci5es will begin to evolve.
Whilst the situa;on in regional ci;es is currently in a chao;c state, 2013 will see the first signs of an
increasingly professional industry emerge. Before that happens however, many sellers in these ci;es will
go bust before a more professional trade appears.
On the consumer front, more inhabitants in Tier 2 ci;es will start to move towards consuming wine
opposed to just gi_ing it. Wine Intelligence says there are currently around 20 million consumers of
imported wine in China – just 1.5% of the popula;on. They believe this will increase to around 80 million
by 2020, with consumers from Tier 2 ci;es making up the bulk.
10 Trends in the Chinese Wine Market for 2013 www.chinawinesolutions.com
Trends Continued
7. Trading Down
Streamlining of distribu;on models, increasing
wine knowledge, a changing demographic and
a more transparent pricing environment will
lead to an increasing willingness for
consumers to trade down.
8. Miniaturiza5on
As wine moves to become enjoyed on a more
regular basis, single serving boDles will
become increasingly popular. This will be
especially true in the city-‐based convenience
store format.
China Wine
Solutions
10 Trends in the Chinese Wine Market for 2013 www.chinawinesolutions.com
9. A Focus on Fake 10. Chinese Wine to Go Global
While the focus of the Chinese wine industry
is firmly on imported wines into China, 2013
will see more Chinese wineries seek lis;ngs in
overseas markets, form strategic joint
ventures and purchase foreign wineries..
China Wine
Solutions
The Chinese government has iden;fied solving
the issue of fake wine as a priority for the
industry. 2013 will see increased pressure
from government, industry and consumers to
work together to improve this problem.
Furthermore, wineries that make an ac;ve
effort to employ ac;ve an;-‐counterfeit
measures will benefit from posi;ve consumer
sen;ment.
Trends Continued
10 Trends in the Chinese Wine Market for 2013 www.chinawinesolutions.com
Contact Us Contact us to discuss more about any of the points raised in this presenta;on or to inquire about how our flexible and cost effec;ve solu;ons to help wine business succeed in the Chinese market.
Contact Details
Winterless Center B-‐1201, 1 West Dawang Rd, Chaoyang District, Beijing,
China, 100026.
E: nick@chinawinesolu;ons.com M: +86 18210211487
W: www.chinawinesolu;ons.com
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