Wine to China

Trends and opportunities

The Market

China is the world’s third largest market for imported wine behind the United States and Germany.

Following several years of weak sales growth following a clampdown on corruption, a consumption-led recovery has seen sales volumes recover substantially since 2015.

Australia is China’s second largest supplier behind France. Australian exports have performed strongly since the conclusion of the China Australia Free Trade Agreement in December 2015.

Exports to China in FY 2016-17 were valued at A$543 million, a 38 per cent increase over the previous year. During the same period, one out of every four glasses of imported wine consumed in China was from Australia (Source: UN Comtrade).

china_wine_imports

Trends and Opportunities

Chinese middle class consumers are the main market for higher value Australian wines. Their importance lies in their long-term, stable purchasing power, brand awareness and as opinion leaders.

Wine benefits from a market perception as being both sophisticated and healthy– particularly as a substitute for hard liquor when consumed at weddings and business functions. Consumption habits differ from region to region. Generally speaking, consumers in north China prefer full-bodied and higher alcohol content wines, while in south China lighter wines are preferred.

Red varieties continue to dominate both sales and exports. More than 96 per cent of Australian table wine exported to China is red. Consumers in coastal areas have a better palate for white wines to complement seafood consumption. Total imports of sparkling wine declined between 2015 and 2016.

value_australian_table_wine

Market entry

Sales channels

Two-thirds of wine in China is purchased on premise. In addition to fine dining restaurants, premium imported wine is consumed in banquet halls, hotels, VIP clubs and company canteens.

Shanghai has approximately 300 wine bars which feature extensive lists of imported wine. Most second and third tier cities have networks of informal wine clubs centred on the wines marketed by key local distributors.

Off trade channels include wine sold through social acquaintances, wine stores, wine clubs, online retail and supermarkets. The best supermarket sales for imported wines are priced between RMB60-180.

Online sales are popular among sophisticated wine consumers, especially for well-known brands. Austrade estimates the online retail value of Australian wine to exceed $67 million in 2016.

WeChat is a social media platforms used to promote and sell bottled wine. Other major online platforms for wines and spirits include:

  • www.yesmywine.com
  • www.jiuxian.com
  • www.wine-world.com
  • www.1919.com
  • www.jd.com
  • www.tmall.com

Competition is strong across all channels in China’s first tier cities (Beijing, Shanghai, Guangzhou and Shenzhen). By comparison, China’s smaller and regional cities offer more untapped opportunities.

Successful wineries demonstrate patience and professional service (particularly through the hiring of a local business development manager to support appointed distributors), while building brand awareness and a long term strategy to develop the market with their Chinese partners.

Further useful information and events on marketing Australian wine in China can be found on the Wine Australia website.

Tariffs, regulations and customs

Before considering any market entry strategy, an exporter is strongly advised to register their trademark in China. IP Australia has published a report on IP protection in China which can be downloaded here.

The China Australia Free Trade Agreement (ChAFTA) came into effect on 20 December 2015, and the existing tariffs on wine of 14 to 20 per cent will be eliminated by 1 January 2019.

Value added tax and consumption tax also applies to the sale of wine in China.

For a full explanation of China’s import regulations, please visit Wine Australia.

Contact details

The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:

  • develop international markets
  • win productive foreign direct investment
  • promote international education
  • strengthen Australia's tourism industry
  • seek consular and passport services.

Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.