Wine: a Trending Taste for China

China’s demand for imported wine has grown significantly over the last decade in line with emerging consumer trends. Recent years have seen a sharp increase in sales, a colossal 132% growth since 2010. This growth has been localised mainly within tier 1 cities, including Shanghai, Beijing, Guangzhou and Shenzhen which can be attributed to a growing Chinese middle class coupled with the historically high number of expats living in China. According to Decanterchina, the current trends in market statistics show a surge in Australian imports; however France still remains China’s most significant wine trade partner. China has grown to become the 4th largest wine market in the world after the US, Britain and France. In tandem with an increase in imports, Chinese has seen an increase in the number of domestic vineyards and production of wine, the most popular and seasoned of which comes from the Xinjiang area. This area has a great wine making history which is said to have started in the 4th century BC once the ancient Greeks brought vines and specialised irrigation techniques to the region. This area in modern times didn’t see a huge profit margin until the 2000’s when disposable income amongst Chinas populous lead to investment and a continuing increase in sales. 2016 was the most prolific year for the wine market in mainland China with a total of 482 million litres of bottled wines imported accounting to a value of $2billion (US) according to Chinese customs statistics. This number is 22% higher in volume and 17% higher in value compared to 2015.

But why the sudden increase in consumption by Chinese nationals? Cheng Fenyang of Suzhou University, who is also an expert from the esteemed Chinese Institute of Modern International Relations, attributed the increased demand to the “fast growth of the Chinese economy allowing a continuous improvement of people’s living standards”. He also went on to say that “Over the past decade wine imports have seen a noticeable growth, especially in coastal regions with high GDP statistics”.  This is most evident in Shanghai, which is viewed by many as China’s most cosmopolitan and international city. Shanghai is a top port for imported wines receiving 29% of bottled products in 2016. Second in the ranks is Guangzhou, receiving 25% of foreign bottled wines.  According to statistics Guangzhou has the highest mean price per bottle, at (US) $7.60 per litre.

Metropolitan, affluent Chinese consumers have a high level of brand awareness and are extremely conscious about their appearance as seen in their choice of high value cars and tailored suits. Wine follows the trend with prestige names such as Chateau Lafite Rothschild, owned by France’s Domaines Barons de Rothschild, one of the five archetypal producers of Bordeaux becoming very popular amongst the elite. The popularity of this brand in China prompted Rothschild to found his own vineyard of 37 acres in Penglai, Shangdong. The luxury group LVMH Moet Hennesy also bought land in Ningxia, one of Chinas poorest regions, snapping up 163 acres as well as 74 acres in southwestern Yunnan. This investment by quality wine makers could lead to an increase in prosperity in these regions in the future, with potential increase to wine based tourism in addition.

Climate change is also projected to play a major factor in the future of viticulture on a global scale, affecting current wine producing regions and possibly creating new ones. This could affect the production and consumption of different wines worldwide, making future market trends in China very difficult to predict. Factors affecting wine production include; temperature, precipitation and radiation. New research papers such as “The Impact of Climate Change on Viticulture and Wine Quality” by Cornelis van Leeuwen and Philippe Darriet find that “In the recent past, wine quality has increased in most wine-growing regions because of higher temperatures and more frequent water deficits while yields have decreased. If the tendency continues, quality might be negatively affected in the near future.” If this is the case China may rely less on imports and more on locally sourced wines. Or on the other hand the changing climate may result in poorer quality wines produced in China, pushing imports higher. The future is uncertain however for now China can enjoy the boom of wine culture.

Chinese wines have already stood the tests of well-known and respected critics such as Robert Parker, with 18 scoring average or better on his wine grading system. These brands are already stocked by many establishments in Shanghai, Guangzhou and other tier 1 cities here in China, helping continue the trend amongst citizens. With living standards on the rise and an expanding middle class we can expect increased demand for luxury items by Chinese consumers. Wine is proving one of the most economically formidable substances on China’s desirables list. 

Disclaimer: the above is the author's personal opinion and is not the opinion or policy of Chemlinked.