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.
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.
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:
Aucun commentaire:
Enregistrer un commentaire