They are All Known for Wines?-What Other Country is Emerging? - Bold Business

China, a country unafraid of partaking in bold moves, is diving into interesting territory: wines. For the past few years, they have been importing an impressive amount of wine and have invested in wineries all over the country.

China’s market for Italian and other import wines is surprisingly high. Since 2013, they have become the main consumer of wine in the entire world, surpassing even France and Italy in worldwide rankings. As early as 2014, their red wine consumption rose to 1.85 billion, a stark difference from France’s 150 million and Italy’s 141 million.

Just past the first half of 2017 alone, their total wine imports amounted to $1.475 billion – about 407.37 million liters. That is a 15.49% increase by volume, and a 7.65% increase by value, based on information from China Association of Imports and Export of Wine & Spirits.

While Italy still remains the highest producer of wine in the world, they are struggling to penetrate China’s market. France currently leads China’s wine market, occupying about 45% of their imported wines, while Australia comes at a far second at 14%. Close behind are Chile, Italy, and Spain, at 9%, 9%, and 8% respectively.

Wine-Consuming Tiers in China

China is one of the largest countries in the world, both in size and in population. With an area of 9.597 square kilometers (3.7 million square miles) and a population of 1.379 billion as of 2016, it’s easier to understand their economy by dividing cities into three tiers. 

Tier 1 includes the economically advanced cities such as Beijing, Guangzhou, Shanghai, and Shenzhen. The wine market here are well-developed, albeit saturated. People who reside in these areas are well educated, aware of wine brands and characteristics, and are on the lookout for new flavors to try.

Tier 2 includes what are essentially satellite cities of those that belong to the first tier. Cities like Dalian, Dongguang, Nanjing, Suzhou, Tianjin, and Yantai are less known and often less populous, but have growing economies as years pass. People who live here typically know mostly Italian and French wines, but still need awareness of these products and brands, and the wine market in general.

Tier 3 includes cities and areas that have people who have little to zero brand awareness, as they are in a vastly different economic situation. Often, their residents cannot even afford the cost of wines imported from all over the world.

A Rising Wine Economy

Experts project China to become the world’s second most valuable wine market within the next few years. By 2020, they are estimated to consume 94 million cases of wine – that’s 72% of worldwide wine growth based on a report by IWSR and Vinexpo. In addition to this influx of imported wines, local wines in mainland China have fallen to about 30% due to an increasing interest in wines coming in from various parts of the globe.

China’s top 10 wine sources and prices as of July 2017 are the following:

  1. France – 98.237 million liters, averaging $4.97 per liter
  2. Australia – 46.095 million liters, averaging $6.14 per liter
  3. Chile – 28.593 million liters, averaging $3.34 per liter
  4. Spain – 33.24 million liters, averaging $2.15 per liter
  5. Italy – 14.962 million liters, averaging $4.5 per liter
  6. United States of America – 4.866 million liters, averaging $6.42 per liter
  7. New Zealand – 1.261 million liters, averaging $9.83 per liter
  8. South Africa – 4.072 million liters, averaging $2.91 per liter
  9. Argentina – 2.547 million liters, averaging $4.1 per liter
  10. Portugal – 3.652 million liters, averaging $2.68 per liter

Overall, China experienced a 25% bulk wine increase in 2017 compared to the previous year. However, there was also a 12.2% increase in the average price, mainly due to the demand for quality. Sparkling wine also increased 27.2% in average price, amounting to $5.74 per liter (about $4.3 a bottle).

It’s not just imported wines disrupting the industry either. This growing demand for quality wine also prompted an increase in domestic production, turning China into the seventh-largest wine producer in the world, and coming only second to Spain in the amount of space devoted to vineyards.

The most significant area for Chinese wine is Ningxia, with about a hundred wineries spread across approximately 100 miles, and producing 120 million bottles of wine in 2016. Their brands of Cabernet blends, Cabernet Sauvignons, and Chardonnays are close to French wines, and experts saying the Chinese wines have good potential to age, allowing China’s bold wine market to be one of the most disruptive and influential today.

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