With China’s flourishing economy soon to become the biggest in the world, its expanding middle class is acquiring a growing taste for foreign alcohol. Currently, it is the third largest market for imported red wine in the world – and the Australians sending wine to China make up a good quarter of the number.
Over 2016 to 2017, exports to China increased by 38%, and were valued at AUD $543 million. This presents an exciting opportunity for Australian brands and businesses to tap into this previously unexplored market.
Let’s look at why this trend of sending wine to China has been on an upward curve.
1. China’s growing middle class
Since their economic reform in 1979, China’s economy has taken the world by surprise with its rapidly flourishing economy which has lifted millions out of poverty and into the urban middle class.
Such middle class consumers have gained a stable purchasing power and are acquiring a taste for foreign beverages. With an estimated 48 million urban upper-middle class drinkers sipping on these drinks in China, it is no wonder why businesses and private owners are sending wine to China.
With China’s regional diversity comes its range in consumption habits, also increasing the market diversity. Overall, northern Chinese consumers prefer higher alcohol content beverages with fuller bodies, whilst southern consumers prefer lighter tastes. Nonetheless, the variety of tastes ensures that multiplicities of alcohol sellers are sending wine to China.
In addition, these consumers are increasing in product awareness and have acquired an expensive taste for prestigious brands.This trend is only set to increase in the future, as China’s economy stabilizes to set itself as one of the most influential in the world.
2. Market perception
As China becomes wealthier, private consumers are choosing reds as their choice beverage due to its market perception as sophisticated and healthy. Its rich, vermillion colour is widely romanticized and associated with warm, ambient settings with loved ones.
At business functions and weddings, the Chinese are also choosing such drinks over traditional hard liquor. The beverage is ideal for celebratory toasts and events, and has become a hallmark of festivity. Importers are hence sending wine to China in bulk volumes, gaining considerable profits in the process.
3. Gifting and personal reasons
Reds are increasingly becoming a lifestyle drink for pleasure, as well as symbols of status and wealth in China. Especially with the emerging new generation who are more experimental, they have become popularized at home as well as corporate functions or weddings.
Although there is an expanding field of alcohol produce in local China, consumers still prefer imported tastes. In particular, Chinese tastes have been researched to be more suitable towards the lighter Australian flavours, which have low acidity and fruity undertones, rather than the heavier, traditional European tastes.
In addition to red, the Chinese market is now becoming expanding to chardonnay, moscato and other white or sparkling flavours. These trends reflect an untapped into market, which is ideal for businesses and brands to send wine to China.
4. Legislations and logistics
With China’s next door neighbor, Hong Kong, as a duty-free trade port on wine, it has become a gateway for people sending wine into China. Furthermore, ever since the China Australia Free Trade Agreement in December 2015, Australia has become China’s second largest supplier, second to France. Such ideal conditions only encourage the trade of sending wine to China.
The increase of online purchasing platforms has also aided businesses sending wine to China. WeChat deserves an honourable mention – the social media app which has swept across China is a major promoter and seller of this alcoholic beverage. The cheaper prices associated with eCommerce has also accelerated its importation.
Businesses and alcohol brands are sending wine to China more than ever. In particular, Australians should take advantage of this relatively untapped into market, for China’s middle class is only going to grow bigger and wealthier in the future.