Two or three years ago, articles about China to become the second-largest wine consumption market in the world in 2020 were on the rise. At that time, wineries and brands in the “new world” and “old world,” including many Chinese agents, were cheered by this prediction. The Chinese market was like a unicorn start-up enterprise that was hot at the top of the wave. A few years later, what is the development of the wine import market of China?
Wine import is still a good business
In the past 18 years, the sales of wine exported to China in new channels have increased by more than 15%. The selling price of wine exported to China has also increased by 5% (although the sales still fell by 1%). However, the proportion of imported products in China in the overall alcohol consumption is still limited, despite the wine import market of more than 5 billion US dollars.
Although the wine import market of China has an asset of more than 5 billion US dollars, the status of each category is different. The export quotas of beer market in the world is more than 50% of the total export quotas of alcohol, about 17% of the beer is exported to China because of the low unit price. Due to the high unit value of spirits, only about 5% of it is exported to Chinese market, accounting for 27% of the beer. Although the overall consumption of wine is far lower than that of spirits and beers, exporting wine to China plays a vital role in the whole export beverage category, accounting for nearly half of the total import volume of China, which is an absolute “big family”.
Competition among exporting countries
In terms of categories, the competition among the countries exporting wine to China is also distinguished. For example, the first source country of Chinese imported foreign wine accounts for 3 / 4 of China’s import business. In contrast, the primary source country of beer and wine accounts for a much smaller share, but the top 10 source countries share a concentration of 90% or even more than 95%.
For exporters, beer is the most competitive of all exported wines. Among all the countries that export beer to China’s market, the country with the highest export volume has a 20% decrease in its export share compared with five years ago, while other countries ranking 2-10 have a corresponding 9% increase in their beer export share to China. The share of other countries not on the list also rose by a percentage point. It can be seen that more and more countries have joined the feast, and the exporting countries are chasing each other and actively seizing market share. Therefore, China’s wine import market will only become more and more prosperous.
However, the export of Liquor to Chinese market is relatively stable, with little change. In other alcohol categories, such as sake and other low degree alcoholic drinks, the market concentration is even higher in five years. It seems that this is a product that can no longer be a niche product.
China’s top 10 wine import source countries
Next, we will reveal the top 10 wine import source countries of China. France ranks first in China’s wine import with $2.17 billion, accounting for 41% of the total, followed by Australia ($794 million, 15%), Chile ($377 million, 7%), Mexico ($258 million, 5%), Germany ($232 million, 4%), Spain ($228 million, 4%), the United Kingdom ($184 million, 4%), Italy ($178 million, 3%), the United States ($107 million, 2%) and South Kore. It is interesting to find that, from the export product mix of the top ten source countries, in addition to France, almost all other countries have their unique wine products or brands.
When talking about red wine, brandy and other spirits, you will surely see the deep French red wine culture and many well-known French brands, such as Lafite of Rothschild family, Human Horse, Martell, and so on. Therefore, almost all the wines exported from France to China are wine and spirits. It accounts for half, but in terms of export volume, wine is far higher than spirits.
Australia and Chile, as the representatives of the new world of wine, almost 100% of the alcohol exported to China is wine. Also, the proportion of exporting wine to China in Spain, Italy, and the United States is substantial, all over 70%, and Italy accounts for 95%. Mexico and Germany are beer-based. Britain is an alternative. Most of its export products are spirits represented by whiskey, which benefits from the London based Diageo Group.
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