Im­ported, af­ford­able, heady

In­ex­pen­sive for­eign wines sold on e-stores con­vert mid­dle class and young con­sumers into oenophiles

China Daily (USA) - - LIFE - By CHAIHUA in Hong Kong grace@chi­nadai­lyhk.com

De­mand for af­ford­able im­ported wine is on the rise inChina and driv­ing US ex­ports.

Jeff Wil­liamson, di­rec­tor of Cal­i­for­nia State Trade and Ex­port Pro­mo­tion, told China Daily at the 27th Food Expo in­HongKong in mid-Au­gust that Cal­i­for­nia’s wine ex­ports to Hong Kong and the Chi­nese main­land are re­cov­er­ing from a slug­gish 2014.

Chi­nese Cus­toms re­leased data that China’s im­ported wine mar­ket made sig­nif­i­cant head­way in 2015, with con­sump­tion vol­ume of im­ported wine reach­ing 43.7 mil­lion -liter cases, a 37 per­cent in­crease over 2014.

Wil­liamson said Cal­i­for­nia’s ex­ports to China kept grow­ing in dou­ble dig­its from 2007 to 2013, but then plum­meted by about 10 per­cent in 2014. Thank­fully, sell­ers ad­justed to mar­ket changes soon.

He said US wine shipped to China Jeff Wil­liamson, has be­come more value-ori­ented. “Pro­duc­ers are mak­ing 20dol­lar bot­tles of wine, or even be­low (that price), and they are do­ing very well on China mar­ket.”

The rise of China’s mid­dle class is driv­ing the im­ported wine mar­ket. A UK-based wine re­search in­sti­tute, Wine In­tel­li­gence, said in its lat­est re­port — China Land­scapes 2016 — in July that about 48 mil­lion ur­ban up­per mid­dle class Chi­nese were drinkers of im­ported wine last year, up from 38 mil­lion in 2014. Wines priced in the 200300 yuan range sold the most.

Wil­liamson also found that sales of white wine are soar­ing. This va­ri­ety has gained pop­u­lar­ity par­tic­u­larly among women, he said. “The mar­ket for wine is be­com­ing more ma­ture and peo­ple are be­com­ing more knowl­edge­able in the China mar­ket.”

Dave Yip, a Hong Kong ci­ti­zen in his 30s, started to im­port wine to Shen­zhen in Guang­dong prov­ince by the end of 2014. The vol­ume of his im­ports in 2015 was about 20 con­tain­ers.

He said drink­ing wine is be­com­ing a fad among com­mon­ers. The most pop­u­lar wine in his busi­ness is the one cost­ing about 300 yuan.

Wil­liamson said on­line chan­nels are boost­ing sales of in­ex­pen­sive wines in China.

He said in the last two years many com­pa­nies vis­ited Cal­i­for­nia, the fourth largest wine ex­porter to China mar­ket, and se­lected prod­ucts for sale on Taobao.com, Alibaba Group’s on­line mar­ket­place.

Low-priced wines at­tract low im­port duty and other taxes, thanks to the main­land’s cross-bor­der e-com­merce pref­er­en­tial pol­icy, he said.

So, prod­ucts sold on­line with an im­port duty of less than 50 yuan are ex­empted from taxes, while main­land cus­toms nor­mally levy a 17 per­cent value-added tax and 14 per­cent tar­iff on im­ported bot­tles of wine.

Such bot­tles move quickly off on­line shelves that are fa­vored by young buy­ers, whose num­bers are grow­ing to be on a par with the main­stream in China’s wine mar­ket.

The China Land­scapes 2016 re­port said ap­prox­i­mately half of young con­sumers, aged from 18 to 29, buy wine on­line.

This is hav­ing an im­pact on sales and mar­ket­ing strate­gies of wine im­porters. So are changes in the price range of pop­u­lar wines, con­sump­tion chan­nels and the main­stream con­sumer seg­ment.

Zhu Hailun, a main­land wine sup­plier, said she will start sell­ing im­ported wine this month on on­line wine sell­ing plat­form Ji­ux­ian.com. So far, the on­line out­let used to fo­cus on Chi­nese white wine. Now, im­ported wines will re­tail be­tween 200 yuan and 300 yuan.

Last year, she sold about 10 con­tain­ers of red wine im­ported from Europe and the Amer­i­cas.

She ex­pects the busi­ness to in­crease this year, thanks to on­line chan­nels and new in­ter­na­tional brand part­ners.

(US wine) pro­duc­ers are mak­ing 20-dol­lar bot­tles of wine, or even be­low (that price), and they are do­ing very well on China mar­ket.” di­rec­tor of Cal­i­for­nia State Trade and Ex­port Pro­mo­tion

CUI PENGSEN / FOR CHINA DAILY

Con­sumers select im­ported wine at a free trade port zone in Qing­dao, Shan­dong prov­ince.

YANG YI / FOR CHINA DAILY

A shop­per hold­ing a box of cook­ies eyes other im­ported foods at a mall in Shang­hai.

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