China will be world’s second largest wine market by 2020
Chinese wine retail market value is estimated US$11.3 billion currently, where export takes about one third with a rapid growth. Chinese wine consumption in 2016 has reached 1.72 billion liters, with an increase of 6.9%, which grows fastest in the world.
Customs data shows that in 2016, 638 million liters of wine were imported into China, with a total value of US$2.364 billion – a year-on-year increase of 15 percent in volume and 16 percent in value. China has already been the largest export wine market for Chile, Australia, Bordeaux and European Union. Imported wine has been more popular these years. Despite overall consumption increases, local wine decreases by 8.7% in sales.
In terms of bottled wine, 481 million liters of bottled wine were imported into China in 2016, with a total value of US$2.194 billion with a yearly increase of 21.8 percent in volume and 17.12 percent in value.
Research estimates that China will be the world’s second largest wine market after the United States by 2020, and will grow 39.8% in the following three years. The overall turnover of Chinese wine market will reach 21.7 billion dollars by 2020.
Italian wines grow fastest in China among top 5 by 39% in 2015
Among the top five countries of wine export to China, namely France, Australia, Chile, Spain and Italy (in order of volume), Italy has the biggest increase of 39% in value since 2015 (29 million litres in volume and US$100 million in value). Italy is the only country of the top five whose average bottle price went up from last year, by almost 22%. Italy is the second largest country in wine volume and value, but in China it ranks only as the 5th volume. France is still the most welcomed wine export country in Chinese market, but the difference between France and other countries is decreasing.
Individual wine consumption is still low
The individual wine consumption per year is 1.34 liters in 2013, ranking as the 34th in the world, while France ranks the first with 47.19 liters annually per person. Average volume of alcohol consumption by Chinese customers is 11.6 liters annually, where wine takes only a small proportion of 11.6%.
From luxury to rational consuming
Wine consumption becomes more commonplace, there will be a shift to higher volume, lower price purchases, with average wine price of US$3.71/liter in 2016. As mentioned above, Italy is only one among top 5 which sees an increase in average price.
Potential consumers of wine in China are expected to pass over 580 million, of which aged from 19 to 40 are about 84%. Young generation is curious about new lifestyle with a rational consuming habit different from older generation who consume wine for showing off richness in Chinese “Mianzi” culture, as anti-corruption policy carried out in 2012, forbidding luxury and expensive gift giving during public affairs. Young customers are shifting their preference from traditional French luxury wine to more varied brands. Circa 73% of the total heavy wine consumers are aged under 45. More than 48 million people aged 20 to 30 consume wine more than twice a year in China.
Red wine dominates Chinese wine market
Red wine occupies 71% of all the wine products on online shopping malls and white wine follows as 16%. According to the data analysis from Baidu, Chinese largest search engine, red wine is searched by 80% among all wine types.
Sparkling wine, however, has been back to normal after a sharp increase in 2014. Although sparkling wine was surging in 2014 with an annual growth of 59.1%, The volume of imported sparkling wine is 12.35 million liters and the overall value is US$56.58 million dollar with average price of 4.52 dollar per liter, decreasing 0.63% in volume and 6.14 in value.
E-commerce, a big opportunity for wine
China now boasts 21 million online wine buyers who look for imported wine. Of all Chinese imported wine customers, 62% view news and information online and 47% buy wine via online channels. Wine is the most purchased among all the online alcohol customers with a robust growth compared to other alcohols. According to previous survey, Chinese consumers use social media with high engagement. On social media, Chinese wine consumers like to follow their favorite brands, publish and share interesting topic about wine, learn knowledge on wine, read and share their comments and follow promotion or events information.
Source: China Customs Statistics Information, Xinhua, Tmall, Decanter, China Wine News, China Briefing, 9Kacha, chyxx.com, The Drinks Business, Wine Intelligence
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