China is one of the emerging markets for the wine business. I already mentioned on that blog that Chinese people are fond of wine and especially French wines.
A recent study conducted by VisaCard Worldwide and based on a survey of 1,800 respondents with an annual income exceeding $16,000 in Beijing, Shanghai and Guangzhou, identified the top brands of affluent consumers in key spending categories, such as automobiles, wine, consumer electronics and fashion.
This study confirmed the taste of wealthy Chinese people for French wines over other European wines and, even, local wines. 80.7 percent of the respondents think French wine is the best, with Chinese brands third after Italian wine and ahead of Spanish, Australian and German wines.
Why is that? In Wine Brands, I tried to answer – at least partially and as best as I could – this puzzling question. There is a “snob value” applying to Chinese wine drinkers. Indeed the drinkers’ profiles are typical of the emerging markets: rich people, executives, high-ranking officials and new millionaires. They drink expensive imported wines, while the middle-class people drink local wines, but everyone wants to drink wine. It is a matter of social status and image.
In Beijing and in Shanghai, wine is the gift that will give most pleasure and prestige, especially imported French wines.Wine is still a mystery to most Chinese. The average wine consumer in China is between 20 and 35 years old, relatively affluent and living in an urban area. Chinese consumers do not necessarily serve wine in the Western way. Iced red wine is popular–white wine is often mixed with coca-colas and red with sweet drinks. But, as in many emerging markets, education is provided by tastings in stores, while more traveling and studying overseas create an elite of connoisseurs.
Chinese wine experts believe that the market is made up of about 1,000,000 consumers with a potential of 30 million. More and more international managers and executives who studied abroad discovered wine while traveling in Europe. Back in China, they retained their interest in wine and broadened their knowledge. They are mostly interested in red because of the symbolism of the color in Chinese culture. Red is associated with luck, happiness and wealth. White is the color of mourning and death, which fights against white wine. It also uses the same word used for liquors and rice wine – “Bai Ju”. White wine, therefore, has a problem distinguishing itself from rice wine. The language too is a problem. Some wine names are very easy to remember: La Tour is “La Tu” and Lafite “La fei”, for examples in the Bordeaux area. Some names are so complicated that people are afraid to order them: “It’s embarrassing to ask for a good wine when its name cannot be understood by my friends because of its pronunciation”, said a Chinese executive to L’Amateur/The Wine Lovers journalist, Sophie Liu (Fall 2007).
In spite of all those problems, wine is becoming a major new trend in China.