mardi 16 décembre 2014

Case Study for Wine market in China

Case Study for Wine market in China

This case study is divided into 3 parts. The first part focuses on the overall wine market size in China. Closely followed is the part 2 which analyses the development of customer behavior and consumer composition. Part 3 mainly deals with the comparison between domestic wines and imported wines.

Introduction of the overall market size:

As the gradual release of consumption capability of Chinese people, wine market in China has been greatly expanded in the past 30 years. However, it currently enters the downturn due to a number of objective and subjective factors, such as the slowdown of China’s economic growth, the intensified and unordered competition in wine market and the policy limiting public consumption enacted by Chinese government. In 2014, industry data shows that the total wine market has reached RMB 30-50 billion, which is nearly equally shared by domestic and imported wines. Although compared with liquor market, which totals RMB hundreds of billions, wine market in China at present has a lot to explore, however, the popularization of wine knowledge and wine promotions through new media will help China's wine market rapidly grow over the next three to five years, as experts predict.

Analysis of Customer Behavior and Consumer Composition:

At the very early stage of wine market development, wine was mainly imported from abroad. For a long time, Chinese consumers has lacked professional knowledge about imported wine and always held the view “expensive is good”. Many speculators took scrambled up the high-end imported wine, which gradually blew up the market bubble. At the same time, fakes appeared unavoidably. Chinese government’s constant fight against fakes pricked this big bubble in wine market. Later, as medium-grade wines have enter Chinese market, early-days’ crazy irrational consumption has grown mature and rational. Chinese customers now no longer blindly chase after high-end imported wine. Instead, they pay more attention to cost performance and take actual situation into consideration when purchasing wine.
In a sense, wine entered China as one luxury industry in the very beginning. Wine consumers at that time were mainly made up of the rich. However, with the gradual market change, the composition of wine customer appears new trend. New consumer group has emerged. Particularly due to the consumption limit policy posed by government, personal consumption, replacingpublic consumption, highlights itself in wine market. Accordingly, young people, as the main force of personal consumption,have become and will be the major consumer group in wine market for a very long period in future.

Comparison between Domestic and Imported Wines:


At present, domestic wine products are leading by Changyu, the Great Wall, Dynasty ---the three major brands, or the so-called first camp of wine industry. The second camp includesWeilong, Huadong and so on. The third camp mainly consists of such local brands as Hansen, Tongtian, Huangxuan, Grace Moga, etc. Actually, China's wine industry is facing three development difficulties:
1.      Just like liquor market, state-run system exerts great impact on the development of wine market.
2.      Wine has a relatively short history in China, say, slightly over 30 years. Therefore, domestic wine industry lack cultural base to increase its brand added value.
3.      Due to the limitation of terrior and weather condition, the production cost is relatively high, which raises its market price and shortens its market advantage at both home and abroad.
On the other hand, imported wines comparatively have the following 4 advantages:
1.      The diversity of products:
a.       With the maturation of Chinese market, wines are imported not only from France, Spain and Italy, but also from the New World like Australia, New Zealand, America and Chilly.
b.      The product range is expanded by white wine, rose wine, sweet wine, sparking and etc.
2.      The optimized marketing mode:
 In the past 10 years, five marketing patterns of imported wine have gradually taken shape in China, namely, 1) selling imported wines through domestic wine companies 2)group purchase 3)chain-store operation 4) branding operation and 5) new media marketing.
3.      The deep cultural base:
Wine has developed more than thousands of years in European countries, which forms a complete and classic system of tasting culture. Imported wines enter Chinese market with their brilliant traditions and sophisticated technology.
4.      The quick corresponsive ability for market change which is indicated by:
a.       The developmental market structure: When imported wine saturated the market in first-tier cities, foreign wine marketers have now been ready to expand the market into smaller cities across China.
b.      During the downturn in wine market, foreign wine industries have strengthened the promotion of low and medium-grade products.


mardi 9 décembre 2014

Set up a WFOE to sell Wine in China


Set up a WFOE to sell Wine in China

Macro level:

 Market size

According to statistics of the International Wine Association , in 2013, red wine sales in China was ahead of France and Italy, ranked the first in the world. If conversing to bottle number, Chinese yearly consumption of wine was 1865 million bottles in 2013, which has a consumption increase of 136% in the last 5 years. In comparison, white wine sales were much worse than red wine. In experts’ opinions, red is the lucky color in Chinese culture, but white represents death. However, as the consumer market becoming mature, the white wine sales are expected to be better.
WFOE Wine China

Today, to set up a WFOE in China, more and more people value health, and this might make wine to replace some spirits and beers, becoming the major part of alcohol beverage consumption. And as the income level of residents in second and third tier cities has been increasing, the consumption of wine in these cities would probably increase. Besides, in China, more and more foreigners and overseas returnees has become the main force of wine consumption. Overall, the wine market size in China would be promising in the future.

WFOE Competitor comparison

Competitors of wine include beers and spirits. Wine has been being accepted by consumers. Although its market orientation is not the same as beers and spirits, the competition is still intense.
Spirits has been going through a slow growth in the recent years, but it still has the strongest market position. Spirits has changed its development strategy from yield increase to price raise, making the gross profit increase a lot. Although its sales has been negatively influenced by overly increased price and some government policies, the government leading role and Chinese traditional spirits culture make spirits keep a sound and strong market position.
Beers has a big market share of low-end mass market. It has strength of low price, low alcohol and good taste. But I don’t think beers’ sales could has too much increase in the near future, because its market orientation ——low-end alcohol consumers would not change. However, in the price of 2~20 interval, beers would still be the leader.
It is hard to say which kind of market orientation wine has. Wine has no clear target consumers. When spirits’ price was relatively low, wine also had a competitive strategy of low price. As spirits increased its price, wine changed its strategy to brand strategy. Currently, wine’s main target market is the middle/high-end market.


Wine selling china

Chinese policies

Chinese public expensed dinner has been strictly oversight these years, particularly all forms of bribe behavior has been forbidden. These policies negatively affect some high-end alcohol beverage sales such as wine sales to some extent. However, set up a WFOE in China has became more easy task.


Micro level:

Customer behavior

For individuals, wine consumption is for social activity and personal drinking. The former values the social information of wine more . Therefore they attach more importance of wine’s brand, level and package. However, the latter values taste and performance price ratio more. Moreover, for famous brand wine, consumers are not so sensitive about price. But for ordinary brand wine, customers are more sensitive about price because they do not have other standards to distinguish the quality of wine.
We also noticed that in social activities, reputation and public praise has been important. In some situation like high-end conferences, business meetings and private parties, seniors recommend to their inferiors, people recommend to their friends. This kind of channel is cost-saving and high-profit, and has become a valuable part of sales.

Profitability

The domestic wine’s rapid growth has been a shining point in alcohol industry even in the society. In recent years, imported wines have low barriers of entry, and they also have quality advantage and low costs. The competition among the various wines has ended the windfall profit era of wines. Some consumers has found that there are many kinds of wine whose prices are under 100 in supermarkets, franchised stores and department stores. Because of the healthy competition and Chinese government  policies, wine market has been squeezing out of the market bubble and getting back to rational price level.

New sales channel

Electronic business development in China cannot be ignored by all industries, especially wine industry. As we all know, women are the main consumers of online shopping, and main consumers of wine consumption. Therefore, it is necessary to sell wine through online stores. According to some wine online shopping search and comparison platforms, it would be a trend that women would become the main force of online wine shopping. Either online platforms or B2C malls would have to attach more importance to women online shopping needs, so that they could stimulate the online wine market. 
See also:

mardi 2 décembre 2014

How are wine sales in China?

How are wine sales in China?


While white wine and rose are growing in popularity, red vines are still the most popular grape in China, particularly Cabernet Sauvignon. Generally, red wine is more well-known, and considered healthier than local rice-based alcohols. One of the most important factors for its prominence in comparison to white wines is the Chinese cultural association of the colour red with good luck and wealth.

wines sales china


Imports have grown to nearly 20% of all wine consumption (up 7% from 6 years ago), with French wines comprising 48% of wine imports last year. Bordeaux is known as the wine of the political elite, but Australian and American wines have been gaining in market share; Californian wine, especially, seems to be growing in popularity. Foreign importers avoid selling anything in the low- to medium-price ranges, marketing only high-end vintages that go for anything between 300 and 1,500 yuan.

Local vintages dominate the market. Shandong, Yunnan and Ningxia provinces are producing some of the highest quality Chinese wines, and have even begun to appear on European shelves. These wines are fighting an uphill battle against stigma abroad, a fight the government is weighing into by labelling Changyu a “famous brand” or national product, but in China they are popular for their relatively low price and huge presence on store shelves. On average, local vintages between 20 and 80 yuan are the most popular.
Find in your leadership of the visit, 10, an article by temptation art buyers in the online wine. You will find a particular gre gory bressolles analysis of e-consumer and organization in a strategic marketing 
The vinexpo gre gory bressolles 2013, professor of marketing, Bem - kedge business schools, international research presented his website on sale of wine. For each of the 32 estimated web site - English, French, German, Spanish, Italian, the United States, Australia and China - 100 Internet user to respond to a questionnaire.



jeudi 2 octobre 2014

Ningxia wants to become a leading region for Wine in China

Ningxia wants to become a leading region for Wine in China

Beijing welcomed on Thursday, September 25th a competition of tasting of about fifty vineyards of this widely dry northern territory, in the icy winters, which registers nevertheless lightning progress in the quality of its production.

"There is decade, if you enjoyed 60 Chinese wines, you were happy to be able to recommend 5 or 10 ", underlines Marcus Ford, one of the members of the jury.» This morning, we enjoyed 47 wines of Ningxia and more or less 60 70 % were certainly wines which you could recommend ".

" There is from now on a much better understanding of the sharpness(delicacy), the way of using the fruit and of keeping it in oak barrel ", pursues this trader, expert of the Chinese market.
Shortly populated and accommodating Muslims' Hui important community, the autonomous region of Ningxia lived for a long time far from the priorities of investment of the central government. Its GDP(GROSS DOMESTIC PRODUCT) remains one of the lowest of China, but the authorities included that the grape could become a last hope, even a takeoff runway for the local economy.  Geographically, Ningxia offers many assets for the vine growing.

«You find mountains there on the West which block winds, Yellow River for the irrigation, the adapted grounds, a lot of period of sunshine and a difference of temperature between in daytime and harms it which favors the ripening of the clusters ", details Jim Boyce, founder of the site grapewallofchina.com and besides one of the organizers of the tasting.

In July, 2012, Ningxia, where most of the vineyards were planted only at the beginning of 2000s, thus came to look for advice to producing countries. The region selected seven wine growers among 50 - a Frenchman, a Spaniard, two Australians, a Chilean, a South African, an American-, asking them to benefit from their experience.



vendredi 11 juillet 2014

Stores of wine in China

Stores of wine in China

In 2011, Rabobank estimates at 3 000 the total number of stores of wines in China. 156,19 million cases were sold the same year. The consumption increases by 25 % / year. The potential of the Chinese market is enormous and the competition became formidable... Moreover, certain distributors of Chinese wine saw their figure of affair falling these last five years with the massive arrival of imported wines.

Good image for stores in China

stores of wine in China

The GMS stores possess a good image in China contrary to France. The sold products are considered as not being of the forgery and the practiced prices are cheap in big cities. Local wines represent 90 % of sales. Besides, the promotions are aggressive and the packagings are adapted to the Chinese culture (gift boxes, design). But, the Chinese stores included that foreign wines brought a smart and positive image. Even if this shelf space brings back only 1 to 2 total percentage of sales of the store, sales increase every year a little more.
These stores settled down in districts rich in large cities. Consequently, imported wines are represented well, such Jinying, Parkson, Wangfujung, NWDS...

Wines in specialized stores in China

The number of specialized stores quickly increases. They are among others situated, in shopping malls, in corners of supermarkets. They are also stores (Links for Links Concept, very powerful Chinese distributing Aussino, Jointek, ZWMJ, Somso), wine bars (Wine Must for Wines Selection; Everwines for Torres), Clubs of tasting (The Wine residence for Fine ASC Wine) bodies of events... These stores belong to importers, distributing, or to investors. They are their "Showrooms" to expose their range and convey a positive image. Their activity rests mainly on it B to B and on the sale to the private individuals with a strong purchasing power (Chinese of middle class in easy and exiled).


vendredi 20 juin 2014

Wine in China : Chinese buy French vineyard

Wine in China : Chinese buy French vineyard

While the purchases of French vineyards by Chinese private individuals and while the installations of French vineyards in China became frequent, here is an event which could well start a new wave: a Chinese domain has just acquired(bought back) the majority of the capital of the Castle Trianon to Saint-Emilion.
The year Enda, owner of the Castle Kinschab and Jin Sha Winery in Inner Mongolia (in China, as its name does not indicate it) has just taken control the Castle Trianon.
The former owner, Dominique Hébrard, keeps however parts in the castle. He had been consultant for the Year Enda in China. He was also a co-owner of the Castle Bellefont-Belcier, who was sold to the Chinese company Juxin Wine and Spirit in November, 2012.
Marc Castagnet, a French hotelkeeper based in Hong-Kong also bought parts of the castle to install a luxury hotel there.
Three co-owners, Hebrard, Enda and Castagnet wish to obtain the classification of the Castle of Trianon as Grand Cru Classé during the next revision of vineyards of Saint-Emilion.




mercredi 21 mai 2014

Chinese are going to taste wine in Africa

The group Perfect China, the partner in 51 % of a joint venture called Perfect Wines of Africa, went buyer of Val de Vie Estate, a wine-making exploitation in Africa. The amount of the deal was not revealed.

China extend its domain of Wine


With Val De Vie Estate's repurchase, China realizes its first raid in the Africa’s wine. The group Perfect China, the partner in 51 % of a joint venture with Leopard's African Leap Wines called Perfect Wines of Africa (PWSA) acquired the parts of this producer, a wine-making exploitation situated to Paarl, in the region of the Course, in Africa. For the moment, the amount of the transaction was not revealed. The vineyard includes a 25 hectare exploitation (among which 21 hectares of vineyards) as well as a manor house and a cellar. The exploitation will be managed by PWSA.
Eh Koegelenberg, president of PWSA, wished to acquire a base of permanent production for a brand of African wine intended exclusively for the Chinese market, The Huguenot. Distributed since 2011, the brand represents 25 % of the total of the African exports towards the Middle Kingdom. Hoping to sell around 1,5 million bottles by 2014, Perfect China waits for many of this new vineyard, mixture of Syrah and Pinot noir.

China wine market to develop all the African industry

According to Eh Koegelenberg, «the wine market is very important for the development of the African industry; this first investment of the Chinese is thus the proof of their interest for our vineyards and will open maybe the way to other partnerships. »
Indeed, Wine is one of the most important markets for development in Africa, along with technology, tablets, education, medical applications and all related to healthcare and education. China has a huge role to play in all these sector; mainly, about the market of Wine, China, which is a country still learning a new culture of drinking wine, can share its experience of emerging force in the next one, Africa.

mercredi 23 avril 2014

Chinese wine market in France

In Saint-Emilion, nobody forgot the ceremony of the Proclamation of the grape harvests 2012. This day, a very attractive Asian, smiling and a little intimidated young woman, was inaugurated in the domain of Saint-Emilion. Unknown in the region, Vicki Zhao Wei is a singer and a comedienne as rich as famous in China. «In 2011, she bought the holy castle Monlot, 7 hectares in naming - émilion Grand Cru (vintage wine), then, shortly after, the castle Patarabet and its 9 hectares ", one of her collaborators reveals. The star being retained in Beijing by her brilliant career, its vineyards are exploited by a company specialized in the management of castles acquired by Chinese. "

Retail of French wine in China

This compulsive shopping should get out of breath, and not only because there are 8.000 vineyards in the Bordelais. Seen by China, these properties are not very expensive (from 2 to 20 million by counting the works). They allow these groups to invite itself on the Chinese market of luxury wines, because even Bordeaux of second category becomes over there high-end nectar. And if its name calls back closely or remotely those of the rare famous castles of Bordeaux in China (Latour, Lafite), it is the tumble. A bottle which would have been sold with difficulty 3 euros in France becomes a precious flask proposed between 15 and 100 euros in Beijing. «Today, we sell 60 % of our production in China, shows Yang Cheng, director of the castle Grande Mouëys.

A positive experience for Wine Market

After more than five years of Chinese investments, «the balance sheet is very positive ", congratulates himself Bernard Farges, president of the inter-professional Committee of wines of Bordeaux. In the first place, «wines of Bordeaux made a success of a historic breakthrough on the Chinese market in a few years [China became the first importer of wines of Bordeaux] ". Secondly, «it allowed several families to sell properties which did not find buyers ", indicates Jean-Luc Coupet, of the cabinet Wine Bankers, reference in the wine-making deals.

jeudi 3 avril 2014

Europe and China reach an agreement on Wine importation

The Chinese and European wine-making organizations reached «a mutual agreement «to solve "disputes" related to an investigation antidumping started by Beijing in June, 2012.

The market of wine in China


The good news has just fallen and will be celebrated during the visit in France of president Xi Jinping: China ends about forty in which it held French wines for one year. After seven "rounds" of negotiations during the last four months, the wine professionals of the EU and China reached finally a draft agreement.
China had opened at the beginning of July an investigation antidumping on the wine which it imports of the European Union, in answer to the institution by the European Commission of temporary taxes on the Chinese photovoltaic panels. Planned to last on one year, the investigation also had to deal with subsidies in the wine-making sector in the EU and their impact on the production of wine in China.

Worried of avoiding a commercial war, the European Commission and the Chinese authorities had reached at the end of July a temporary agreement in the case of the solar energy. THE EU had so agreed to end taxes antidumping temporary, provided that the Chinese exporters of photovoltaic signs respect a minimum price.

China first market for european red wine


The exports of European wines in China represented 1billion dollars in 2013, which is nearly 70 % of the Chinese imports of wines.
This battle on the European wine had indeed been launched in June, 2013. A few weeks later, the Commission had given up these taxes, and had reached an amicable mutual agreement with the Chinese solar producers on their export sales. Beijing had not given up for all that its attack against the French wine, as to show that we do not play with its industrial interests.


The European producers thus made a commitment for coming two years to supply a technical support (techniques of vine growing, quality control of wine making) to the producers of Chinese wine. In exchange, the latter are supposed to help to promote more the culture of the wine on the rapidly growing Chinese market. According to a study Vinexpo published at the end of January, China became the first consumer of red wine to the world.



jeudi 20 mars 2014

How to develop your branding in China?

The wine market in China is very carrier with 25 % of consumption a year since 2010.
White and pinkish wines find little by little their way, with a consumption dominated by the red wine. In 2012, the imports of white wines increased by 39 %. The wine market in China should increase by 53 % between 2012 and 2015 for red wines and by 69 % for white wines
What are best practices to develop its wine branding on the Chinese market?

The best branding tips in chinese market


Chinese are fond of explanations to know how to appreciate wines. Wine Testing is more and more numerous in China. It is advisable to associate the culture of the wine and the Guanxi (network).
The wine has very positive connotations: refinement, internationalism and voucher for the health!
Numerous companies launched into this raising awareness and it is the Anglo-Saxons who dominate this world of the training in the wine. A French start-up Vinosensia, suggests in Chinese discovering the wine in a playful way. See their interview about branding in China.
To win in credibility, the wine needs an expert who reassures the Chinese customers. An expert in the wine can be a wine steward, a branding consultant, or simply French working in the sector of the wine.
Certain sites of on-line sale use wine stewards to present wines by video.
We can also note the more recent initiative of an on-line wine steward: Your Wine Video. Your Wine Video will be the virtual wine steward of Red Panda, chain of wine bars the first store of which will open its doors to Global Center to Chengdu in China, by the end of 2013.

Objective: inform and seduce the consumer of Chinese wine, to develop the branding strategy, with simple information and in Chinese while bringing the prestige of the presence of a wine steward in wine-bars Red Panda.

The videos of the virtual wine steward YWV will be accessible thanks to a simple flash of the QR code of the bottle bought at Red panda with a smartphone. A simple flash and you are redirected towards the video corresponding to your purchase of the virtual wine steward.

jeudi 13 mars 2014

Technology and wine in Africa

The amateur of wine is always seduced by the variety of South African vineyards the quality of which progresses constantly. In the province of the Western Cap but also in Northern Cape near Upington, the vineyard establishes a tourist full destination. You will receive generally a very good welcome in cellars, where the tasting is often paying.

Wine from Africa are apprecieted

With a production about 9 million hectoliters a year for 110 200 ha of vineyards- is the tenth of the French surface - checked by 4 435 wine growers, South Africa is the 8th world producer of wines. We develop approximately 3 % of the wine produced in the world there. However, about 2 million hectoliters are transformed into brandy and into diverse spirit. Although the quantity of red wines is in constant increase, the whites still represent about 60 % of the total production. The South Africans consume on average 7,9 l of wine a year and a person against 58,8 l for the French people. Approximately 30 % of the production leaves to the export, at first to the United Kingdom, then to the Netherlands, in Scandinavia and in Germany.
Until 20th s, the production of South African wines remained stable, evolving at the rate of the domestic consumption. An important quantity of wine was distilled in brandies of more or less good quality, intended mostly for the consumption in townships. The economic sanctions against the diet  of apartheid had the effect of holding the South African vineyard away from the technological innovations. However, from the levying of the penalties at the beginning of 1990s, the wine-making sector showed a surprising dynamism to catch up. Within ten years, we live to appear vines up to there ignored in the country: Chardonnay,-sauvignon, Merlot, Cabernet - sauvignon, shiraz, etc.

China has a role to play in Africa with its technology

Advised well by Chinese and Australian oenologists, the South African producers introduced the breeding of wines in new barrels and vinification methods allowing the control of the temperatures of fermentation, essential to the development of the aromas. Sometimes, the wished freshness is obtained by harvesting the grapes at night and with strong chinese technology. But the oenological innovation can have its lapel. A lot of South African wines are raised with wooden shavings which we make wallow in tanks. Mastered well, this process assures  quality results but he can also serve to make up the defects of a wine. Chinese really appreciate this Wine




vendredi 21 février 2014

China wine market development

Threat for Wine market in China

For which reasons of the rich people are few ones not to be able to distinguish so much a truth of a Castle false Lafite? Lu Jiang indicated that in China, still(yet) few people knew well the wine. It is easy for the manufacturers of adulterated wine to cheat the consumers. In addition, opposite to a bottle of wine Lafite, the immense majority of the people they prefer guarding silence not to lose prestige.

" The Chinese market of the wine is not very developed, and generally the knowledge of the consumers on the wine is limited. This probably induces a blind consumption, the people who throws herself on a brand of wine ", made clear Lu Jiang.



Openings for Wine market in China

Every market must know this process of development. In the United States as(like) in Japan, this phenomenon also took place(was produced). It(he,she) does a score of years, to Japanese it liked to drink wine mixing it in Sprite as the Chinese (it) they do nowadays and consider this to the mode, indicated Mr Lu Jiang, counselor in chief in Wineonline Culture's wines.
The Chinese wine market knew rapid progresses the latter years. In the big cities and the coastal provinces, the number of illuminated consumers increases rapidly. They can choose the wine according to his(her,your) taste. " The diversity of the demand(lawsuit) is a sign of a market developed ", indicated Lu Jiang, who thinks that the increasing number of illuminated consumers should stimulate the healthy development of the market of the wine.

http://www.weeklytimesnow.com.au/news/breaking-news/twe-appoints-new-chief-executive/story-fnjbnvtd-1226832429830
http://www.ibtimes.com/why-china-surpassed-france-worlds-biggest-red-wine-consumer-1552185