Chinese Wine Market Insights, Strategies, and Recommendations

The Chinese wine market is complex and competitive but offers huge potential for the international wine trade. In this article, we summarize its characteristics and provide expert recommendations for your business strategy in China.

Table of Contents

  • Introduction
  • Understanding the Chinese Market
  • Getting to Know Chinese Wine Consumers
  • Domestic Wine Production
  • Who Are the Key Players in China’s Imported Wine Market
  • How to Enter the Chinese Market
  • Using Digital Platforms & E-commerce to Boost Your Sales and Build Your Brand Awareness
  • How to Connect with Chinese Consumers
  • Conclusion

Introduction 

China is the world’s fifth-largest market for wine consumption by total volume, and as more mature wine markets become saturated and highly competitive, it is now considered by wine producers to be the world’s most promising market for future growth. Despite the huge size of the Chinese market, wine consumption volume per capita in China is 40 times less than in France. Indeed, the market still has huge potential when considering the growing incomes and wine consumption habits of Chinese consumers. However, finding success in the Chinese wine market is far from a sure bet, and requires a comprehensive and well-researched strategy. 

Following right alongside the country’s fast-growing economy, the wine market in China has been changing rapidly. In the late 1990s, when pioneering wine importers such as ASC Fine Wines were founded, imported wine began appearing in the country’s larger cities. In the 20 years since, Chinese wine consumers went from adding Sprite to mass-produced domestic wine to being much more selective about the quality and the taste of their wines. The wine market in China had its first peak over the period from 2010 to 2012, but this was soon followed by a sharp decline resulting from the anti-corruption policy that was introduced in 2013. Starting in 2014, wine consumption in China shifted from catering, entertainment, and extravagant gifting for government officials towards personal consumption. Now recovered from the decline caused by the anti-corruption policy, the market enjoyed its second peak from 2015 to 2017, during which Australian wines, especially Penfolds, found great success in China. In late 2018, the Chinese wine market began a slow decline as a result of a stagnant economy and was then hit by the pandemic in early 2020, resulting in a drop of 17.4% compared to the wine consumption in 2019. However, the pandemic drove many new trends in addition to these negative impacts, as it pushed e-commerce and social commerce to a whole new level. 

Uncertainty is a key feature of the Chinese wine market that should not be overlooked. Aside from the drastic decline, it suffered during the pandemic – while other major wine consumer markets like the United States, the EU, the UK, and Russia remained stable – the punitive tariff imposed by the Chinese government on Australian wines will reshape the country’s wine market for years to come. New challenges are inevitable due to the complicated nature of the Chinese wine market, as it remains largely influenced by political and socio-economic factors, but new opportunities are presenting themselves every day as the consumer base is growing and the market is maturing. 

China CRM by Asia Beverage Media Group

Understanding the Chinese Market

For a market containing 1.4 billion people and huge regional differences, it is impractical to look at the Chinese market as a whole. Culturally speaking, the coastal regions and big cities in the eastern part of China are important to international trade and have been influenced by the Western lifestyle. Big cities and affluent regions also have higher income levels and more disposable income. According to data from the China Alcoholic Drinks Association (CADA), the country’s bottled wine consumers are concentrated in coastal cities and provinces like Guangdong, Zhejiang, Shanghai, and Beijing. The province of Guangdong alone accounts for roughly 30% of the country’s total import value of bottled wine. 

The differences in economic development among regions are directly reflected in their distribution structure and consumption patterns. Economists and marketers often divide the cities in China into tier groups to aid in planning and analysis. First-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen tend to have the features of mature wine markets. Second-tier cities, including affluent cities near the first tiers and provincial capitals, are quickly catching up. Smaller cities in inland regions have great potential as they are reached by the rapid development of the economy and income increases. 

Middle and affluent urban households as a percentage of total urban households

Middle and affluent urban households as a percentage of total urban households
Source: Center for Consumer and Customer Insight, Boston Consulting Group

In first-tier cities, most notably Shanghai, the wine market is highly competitive. Thousands of wine importers of varying operational sizes and product mixes are based in first-tier cities. The distribution structure in these cities is complete and comprehensive, covering on-trade, off-trade, e-commerce, corporate purchasing, and private club channels. The level of sophistication of wine consumers in first-tier cities is much higher than in other regions. Wine consumers in first-