China’s Wine Market Outlook: Trends and Opportunities

Despite challenges such as declining consumption and import figures, China’s wine market remains resilient and promising. Strategic adaptation to evolving consumer preferences, emphasis on quality and sustainability, and leveraging digital platforms for sales are pivotal strategies for success in this dynamic and competitive landscape.

In recent years, China’s wine market has faced significant challenges marked by declines in key metrics such as consumption, imports, and domestic production. These difficulties were further compounded by the disruptions brought about by the COVID-19 pandemic. Despite these setbacks, the market retains its allure, presenting opportunities for foreign wine producers and exporters who are willing to adapt and strategically engage.

As consumer preferences evolve and government policies increasingly emphasize quality and sustainability, understanding these complexities becomes crucial for stakeholders navigating China’s evolving wine landscape. By staying attuned to shifting trends and regulatory developments, stakeholders can position themselves effectively to capitalize on the market’s enduring potential.

This article explores current trends and potential strategies for success in China’s dynamic wine market.

China’s wine market outlook

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Industry Trend and Sizing Analysis

The wine sector in China has experienced dramatic shifts over the last two decades, initially reflecting rapid growth and then gradually declining. In the early 2000s, China emerged as a lucrative market for global wineries seeking expansion due to soaring wine imports driven by rising consumer wealth and the perception of wine as a symbol of sophistication. However, per capita consumption peaked around 2012, and imports have since plateaued, with recent years showing significant market contraction. The COVID-19 pandemic exacerbated these challenges, particularly affecting wine sales due to its association with social gatherings, which were restricted during lockdowns.

Following this trend, in 2023, China saw a significant decline in wine consumption, with a 24.7 percent decrease compared to 2022. According to the International Organization of Vine and Wine (OIV), China’s wine consumption has been falling since 2018, averaging a loss of 2 million hectoliters annually.

Nevertheless, China remains the ninth-largest wine-consuming nation worldwide.

Looking forward to 2024, China’s wine market is poised for dynamic activity, delineated primarily by consumption settings: at-home and out-of-home. According to Statista, revenue from wine sales in supermarkets and convenience stores (at-home) is forecast to reach US$9.7 billion. In contrast, revenue generated from wine consumed in restaurants and bars (out-of-home) is expected to be substantially higher, totaling US$17.2 billion. This projects the total revenue from the wine market to reach US$26.8 billion by the end of 2024.

In terms of volume, the Chinese wine market exhibits a notable divide between in-home and out-of-home consumption. It is anticipated that 913.9 million liters of wine will be consumed at home in 2024, while out-of-home consumption is expected to amount to 739.3 million liters. Together, these figures indicate a total projected wine consumption volume of 1,653.0 million liters in 2024.

Overall, these figures highlight the changing nature of the wine market in China, with significant differences in how wine is consumed at home versus in social settings. As such, the market’s future will be highly influenced by consumer preferences, economic conditions, and regulatory changes in the coming years.

Wine consumption preferences

In China, red wine maintains its dominant position among consumers, despite increasing interest in diverse wine varieties. Cabernet Sauvignon emerges as the clear favorite. This preference for red wine is driven by its perceived health benefits and deep cultural significance, firmly establishing it as the preferred choice among Chinese wine enthusiasts.

Meanwhile, rosé wine holds a smaller yet noteworthy market share of 3.5 percent, while other wine types collectively capture 2.3 percent. These figures underscore the enduring popularity of red wine relative to its counterparts, highlighting its entrenched status in the preferences of Chinese wine consumers.

Import dynamics

From 2019 to 2023, China’s wine market import landscape underwent significant changes influenced by escalating trade tensions with the US and the COVID-19 pandemic. Throughout this period, baijiu remained dominant in China’s alcoholic beverages market, followed by beer, with wine playing a smaller but increasingly intricate role. The import of bottled wine notably saw consistent declines during this period, contrasting with occasional growth seen in sparkling wines, wine coolers, and bulk wine categories.

In 2023, the import value of brandy surged to US$1.76 billion, surpassing the total of all wine imports since 2018. This shift highlights a rising preference for spirits over wine among Chinese consumers, a trend perhaps influencing the market’s imports downward trajectory.

Despite these challenges, the overall Chinese economy remains robust, with a five percent GDP growth target set for 2024 and initiatives stimulating consumer spending, offering positive prospects for the wine industry.

In 2023, France emerged as China’s top wine supplier, exporting wine valued at approximately US$559.73 million annually. Following France, Chile held the second position in terms of wine export value to China.

Now, after nearly six years of adjustments, the market is showing early signs of stabilization. If imported wines recover, they could gain ground in a sector where Chinese consumers increasingly prioritize value and quality. Stakeholders in the wine sector cautiously anticipate potential revitalization with the resurgence of Australian wine brands, especially following the lifting of import tariffs on March 29, 2024.

Case study: The “Made-in-Italy” effect

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Italian wines have steadily carved out a niche for themselves in the dynamic Chinese market, propelled by strategic branding and targeted marketing efforts, notwithstanding their relatively late entry. VM Fine Wines, for instance, serves as the exclusive importer and distributor of approximately 250 Italian wine labels across China, showcasing the country’s diverse regional offerings.

This approach highlights Italy’s renowned quality-to-price ratio and extensive grape variety selection, resonating strongly with Chinese consumers who value authenticity and craftsmanship.

The success of Italian wines in China is precisely underscored by their ability to leverage storytelling and cultural appeal. By emphasizing the unique terroir, traditions, and meticulous winemaking processes, Italian wineries have captivated Chinese enthusiasts.

For example, Italian wines like those from the Asti DOCG, such as Asti Spumante and Moscato d’Asti, showcased at the Global Geographical Indication Products Expo in Sichuan, have demonstrated the effectiveness of highlighting cultural heritage and quality.

Moreover, Italian wines’ strategic use of awards and recognition further enhances their reputation, solidifying their appeal among affluent Chinese consumers seeking both quality and heritage.

The Consorzio Franciacorta‘s strategy in China exemplifies this meticulous and strategic approach tailored for long-term success in a complex market. Initially, they conducted extensive on-the-ground research to deeply understand the dynamics of the Chinese sparkling wine market, specifically focusing on Franciacorta.

A crucial aspect of their approach was the careful selection and registration of a Chinese brand name that resonated authentically with local consumers. This step is often overlooked but essential for effective market penetration in China.

Moreover, recognizing the importance of education and engagement, the Consorzio developed a specialized course delivered in Chinese. This initiative not only aimed to cultivate a deeper understanding of Franciacorta among Chinese wine professionals but also underscored their commitment to nurturing a sustainable market presence.

Overall, the Consorzio Franciacorta’s meticulous planning, cultural sensitivity, and focus on education have positioned them strategically for long-term success in China.

Key distribution channels: The rise of e-commerce

The Chinese wine market is increasingly embracing online sales as a primary distribution channel. In the post-COVID-19 era, buying wine online has become a major trend. China’s wine e-commerce market is experiencing significant growth, standing out as the world’s largest and fastest-growing market for online alcohol sales.

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According to the International Wine and Spirits Research (IWSR), China’s alcohol e-commerce market is projected to grow at a compound annual growth rate (CAGR) of 6 percent from 2022 to 2027, increasing its global market share to 40 percent. This growth is driven by key factors such as the development of direct-to-consumer (D2C) and on-demand customization services, further bolstered by the lifting of pandemic restrictions in late 2022.

The majority of Chinese consumers now prefer to purchase their alcohol online, with over 53 percent of alcohol buyers using e-commerce platforms, nearly double that of other major markets. This trend is largely fueled by younger generations, particularly Gen Z, who frequently shop online for convenience and variety. Platforms like Tmall and JD.com dominate the market, but the rise of niche platforms like Douyin and social commerce sites such as Pinduoduo are introducing new dynamics and opportunities for brands to engage with tech-savvy consumers.

Wine is leading the growth among alcoholic beverages sold online. IWSR forecasts an 8 percent CAGR for online wine sales from 2022 to 2027, outperforming other categories like spirits and beer.

In 2020, Tmall led China’s online wine market with a 50 percent share, followed by JD.com with nearly 25 percent of all online alcohol sales. However, the distribution channels for online wine sales are increasingly diversifying with the rise of specialized platforms such as Pinshanghongjiu and Jiubaowang. These niche platforms focus exclusively on alcohol and wine, attracting consumers with detailed product descriptions and robust customer reviews.

Meanwhile, despite the dominance of online sales, many competitors in the wine market are adopting a hybrid approach, combining online and offline retail strategies to enhance product availability for consumers. This dual presence allows retailers to reach a broader audience. Additionally, a growing trend involves retailers offering educational programs for new wine drinkers and hosting wine tastings. These initiatives enable Chinese consumers to engage directly with wine retailers and distributors, fostering customer loyalty and building “guanxi”—a crucial concept in Chinese culture that emphasizes the importance of relationships and networks in business.

Emerging trends in China’s wine market

Creating memorable experiences

Chinese consumers love to celebrate special occasions, and wine consumption is no exception. A notable example is the rising popularity of mulled wine during the winter holiday season. Both homemade and restaurant-served mulled wines have generated considerable interest on social media.

The appeal of mulled wine lies in its association with Christmas, the ease of creating DIY variations, and its visual appeal. Wine brands can harness these elements to create engaging and shareable experiences that resonate with younger consumers.

Focus on health and low-alcohol options

Health consciousness among Chinese consumers has been on the rise, especially after the pandemic. Many now prefer wine over other beverages for health reasons and are becoming more discerning about what makes a wine healthy. Organic and health-focused wines, as well as low-alcohol and alcohol-free options, are gaining popularity.

This trend is particularly strong among women, with “low-alcohol wine” and “girly wine” being popular choices. Brands should note that while “sweet wine” is favored among this demographic, it can sometimes conflict with this health-focused priority.

Desire for unique flavors

Chinese consumers have a growing appetite for unique and novel products across various categories, including wine. Beyond traditional varieties like Cabernet Sauvignon and Merlot, there is increasing interest in wines made from niche grape varieties and innovative winemaking techniques. These unique flavors and textures cater to consumers’ desire for individuality and distinctiveness.

Wine tourism and cultural experiences

With the resurgence of travel enthusiasm post-pandemic, Chinese consumers are increasingly combining their trips with culinary experiences, including wine tourism. This trend has led to tourism booms in major wine-producing regions within China, especially during holiday periods.

As international travel resumes, well-marketed, China-ready wineries overseas are likely to become popular destinations. This not only boosts sales but also generates word-of-mouth publicity and opportunities for Chinese-specific innovations.

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