Chinese Market Experiencing Strong Growth in Imported Wine

The Chinese wine industry has entered the high-speed growth stage in recent years, according to a recent report on the Chinese wine industry from Research and Markets.
Though the international financial crisis broke out in 2008, it did not place severe influence on the Chinese wine industry. In 2008, Chinese wine production totalled 698,300 kiloliters, a 5 percent increase over 2007. In 2009, Chinese wine production amounted to 960,000 kiloliters, rising by 37.48 percent year-on-year.
Wine belongs to the fast moving consumer goods market. Competition in the Chinese wine market concentrates on market capacity and channels rather than product function, attributes and technology. Channels have become the key successful factor for competition. In China, the consumption channels for wine mainly include two categories restaurants and hotels; retail channels such as shops and supermarkets. According to statistics, restaurants and hotels account for over a 50 percent share in the Chinese wine market while retail channels occupy less than 50 percent. Among those retail channels, supermarkets and general merchandise stores take up over 50 percent while the rest are shared by convenience stores, exclusive stores and independent food stores, etc.
The concentration in the Chinese wine industry is much higher than that in the beer and liquor industries. The sales volume of ChangYu, Great Wall and Dynasty has occupied over 40 percent on Chinese wine market.
China enjoys the highest wine consumption growth rate in the world. Since the 21st century, wine consumption in those traditional wine consumption countries has not seen an obvious increase while the Chinese wine market has achieved a prominent growth in wine sales volume. With the improvement of living standards, more consumers in China will choose imported wine, attracting the entry of many international wine enterprises into the Chinese market.
In 2009, the Chinese wine import volume and value amounted to 171,231,332 litres and USD441,697,229, increasing by 4.93 percent YOY and 22.91 percent YOY respectively. In 2009, the import volume and value of bottled wine (no more than 2 litres each) reached 91,025 kiloliters and USD 377.11 million, rising by 58.3 percent YOY and 36.7 percent YOY separately. In the previous four months of 2010, the Chinese import volume and value of bottled wine came up to 41,809.10 kiloliters and USD 177.51 million, growing by 76.5 percent YOY and 91.1 percent YOY respectively.
Imported wine in the Chinese market mainly includes imported bottled wine with original packaging, foreign bottled wine filled in China and the import base wine blended and filled by domestic wine enterprises and labelled with domestic brand (blending of foreign and domestic wine, Chinese domestic brand). Presently, the sales of import bottled wine account for over 5 percent in the Chinese wine market, which is mainly provided in high-end markets such as star hotels and high-end clubs. In China, imported wine is mainly distributed by wholly foreign-funded or joint venture sales companies and domestic small traders or distributors. Plus the imported base wine blended and filled by domestic wine enterprises and labelled with domestic brands, the import wine takes up over 15 percent shares on Chinese wine market.
With superior advantages in raw material quality and cultural content, imported wine has dominated the Chinese high-end wine market. Import wine brands on the Chinese market are mainly from France, Italy, Spain, Portugal, Germany, USA, Canada, Chile, Argentina and Australia, etc. The imported wine volumes from France, Australia, Chile, USA, Italy and Spain, etc rank amongst the top in China.
The Chinese wine market is mainly occupied by medium-end and low-end domestic wines. Imported wines impact home-made wines in price, quality and variety as well as encourage the improvement in the overall consumption level and volume of the Chinese wine market.
In 2009, the Chinese wine market was mainly dominated by the full grape juice wine. The dry and semi-dry wines accounted for over 50 percent of the market. Among dry wines, dry red wines occupied 80 percent while the remaining 20 percent were taken up by dry white wines.
Chinese grape wine enterprises represented by ChangYu, Dynasty and Great Wall have become the leaders in their own regional markets. ChangYu occupies a prominent position in Shandong, Guangdong; Great Wall leads the wine market in North China; Dynasty has realized the high market share in Shanghai.
Many regional wine brands in China also enjoy high-speed development, including Weilong and Harvest in Central and South China, Suntime and Yunnan Red in West China and Tonghua dry red wine in Northeast China.
Chinese wine prices are on an upward trend generally. With the popularization of the wine culture and the improvement in the consumption concept and capacity, the prices of mainstream wines in China have been raised from 20-40 CNY/bottle (750ml) to 30-60 CNY/bottle (750ml) by 2010. The healthy and fashionable wine drinking culture has gradually been accepted by Chinese consumers. The demand for wine in China is increasing continuously.
Copyright Business Wire 2010