Wine - China - December 2012
“China’s wine retail market expanded at a compound annual growth rate (CAGR) of 22.3% from 2008-12 to reach an estimated market volume of 842.4 million litres, while value CAGR rose at 25.6% from 2008-12, growing to an estimated RMB46.3 billion. The share of wine in the Chinese alcoholic drinks retail market is rising despite the market being largely dominated by beer and spirits, driven by the growing allure of wine which is perceived as a more refined and healthier alternative to other alcoholic drinks.”
– Tan Heng Hong – Senior Research Analyst
In this report we answer the key questions:
- What are the prospects for currently niche wine varieties such as white, rosé, ice and sparkling wines given the domination of red wine?
- Will imports continue to capture a rising share of the Chinese wine market and what are the opportunities for lesser-known wine-producing countries?
- What are the implications of the rampant counterfeiting of wines on consumer engagement and distribution channels?
- Is there demand for low-alcohol wines and single-serve wines?
China’s wine retail market expanded at a compound annual growth rate (CAGR) of 22.3% from 2008-12 to reach an estimated market volume of 842.4 million litres, while value CAGR rose at 25.6% from 2008-12, growing to an estimated RMB46.3 billion. The share of wine in the Chinese alcoholic drinks retail market is rising despite the market being largely dominated by beer and spirits, driven by the growing allure of wine which is perceived as a more refined and healthier alternative to other alcoholic drinks.
“China’s domestic wine companies dominate the market, but are struggling to compete with imported wines, which enjoy a stronger image than domestic wines in areas including brand image, quality and heritage with the exception of price and promotion activities. As domestic wine companies improve their product mix towards more expensive wines to move beyond the ‘cheap’ wine image, they are confronted with the growing affordability of imported wines, which are making their presence felt in the mid- to low-end market.
“Consumers’ growing confidence in trusting their own taste coupled with rising income means they will become more adventurous in their tastes and will no longer restrict themselves to just red wine, also opening up opportunities for wines from less well-known countries. The rise in wine consumption has seen the problem of fake wine grow, which underscores the lack of understanding about wine. Consumers are interested to equip themselves with wine knowledge and this will help to open up numerous consumer engagement opportunities. The demand for low-alcohol wines is an indication that consumers want something that will not make them too easily drunk, especially as Chinese people are prone to alcohol intolerance and alcohol is important to lubricate business dealings and friendships. The shift towards responsible drinking opens up opportunities for single-serve wines and low-alcohol wines as tools for controlling alcohol intake
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