Written by While there had been a steady increase in wine imports and consumption in China in recent years until 2018, 2019 had already marked a moment of profound change within the dynamics of the wine world in China.
In 2019 we saw a reversal in the trend of wine imports, marked by a sharp decline; this was due to the accumulation of products in the warehouses in the previous year and which had not yet been disposed of.
Moreover, in 2019, about a third of the back then distributors and/or importers who, among other things, also dealt with wine, had closed their businesses, leaving room for those professionals who, over the years, had distinguished themselves for their knowledge, professionalism and management of an extremely specific market, such as that of wine or, more generally, F&B.
As far as 2020 is concerned, the situation of Covid-19 has certainly already weighed heavily on domestic wine consumption in China and if things were to continue this way, the entire wine industry would suffer the heavy consequences. It is also true that this crisis gives us the opportunity to reinvent ourselves and to create new strategies for the future.
What do the figures say about the reaction of the Chinese market to the Covid-19 situation so far?
According to data from the Chinese Trade Minister in the first quarter of 2020, Italy would have reduced its imports to China by about 15% compared to the same period in 2019, ranking fourth for imports after Australia, France and Chile, but still ahead of Spain and the USA.
Despite the great loss in terms of volumes, a positive note should be spent on the value of Italian imports to China. Italy lost about 2% of the average value compared to the same period in 2019, still much less than, for example, France which, instead, lost about 18% compared to the same period last year.
Distribution channels at the time of the Coronavirus.
According to the website RaboBank although e-commerce platforms were already growing exponentially in China in the past, physical stores, compared to online sale, were still accountable for 70% of sales until 2019. It must also be mentioned that wine, culturally speaking, is a commodity that is usually in China is consumed in company, in restaurants, during festivals, and therefore, much more rarely the Chinese consumer has found himself buying wine to drink it at home alone, as an aperitif or for dinner.
The Coronavirus scenario, however, has also started to change this dynamic.
E-commerce sales have increased further, home deliveries are always faster and certainly very cheap, this entices the consumer to buy and experiment.
What does the future hold for us?
An important role in the present and future scenario is certainly played by Millennials, a key target for the sale of wine in China, and also the largest users of e-commerce platforms.
Millennials in China tend to prefer online relationships to face-to-face ones and are increasingly looking for informed purchases. This is where the key role of the KOL and their influence on consumers comes into play, especially through live streaming on the various online platforms available: from Weibo to Kuaishou to the increasingly popular TikTok
The combination of the growing interest of millennials for wine, the peculiarity of associating it mainly with moments of conviviality and their willingness to find solutions online, have created a real trend during the period of forced quarantine, which the Chinese also found themselves experiencing: the “Cloud (云 yun in Chinese) wine tasting”.
According to the website The Buyer, many people have used the online aperitif or event mode to taste wines together, whether it was among a group of friends or for commercial purposes.
The giant COFCO Great Wall Wine Company, for example, organized a week-long session of events, tastings and competitions related to wine, attended by hundreds of thousands of people.
How to move forward from here?
According to Frankie Zhao, founder of Millevini Wine Trade Co. Ltd., “the rich culture and diversity of Italian wines can offer a lot to the thirsty and demanding Chinese market” and even Italian regions so far underrepresented in China are beginning to take hold.
In order to stand out, however, and be remembered, Italian producers need to be noticed by consumes and establish with them a relationship of interest and trust. It is therefore essential to get to know and be known on the most used platform in China: Wechat and follow our advice on how to manage a Business with China in the days of Coronavirus.
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