Navigating a very fragmented and dynamic Chinese wine market is challenging. Ian Ford, Founding Partner, and Nichole Mao, Partner of Nimbility Asia, help guide wineries to the right pathways for import partners and building demand in China. They also discuss how important domestic Chinese wine production is, the market for US wine in China, and the importance of wine education.
Sam's Club - known for wine sales to the mass market
Leading grocery stores - Jing Dong, Hema
Promoting and selling in China
Chinese social media platforms have integrated e-commerce (e.g., WeChat vs. Whatsapp, Douyin vs. TikTok), so people can immediately click and buy
KOLs get commission or paid upfront to promote, lifestyle influencers are important
Traditional wine media stays w/in the wine trade and doesn't reach the mass market
Need good importer(s) for availability, no longer need to be exclusive
View importers as partners, 1,000s of active importers, e.g., DTC importers (Vine Hu, Wiki Wines), big guys (ASC, Summergate, Torres) have extensive sales teams, operate omnichannel
Wine trials are necessary - tastings at festivals, grocery stores, etc.
Word of mouth is increasing in importance - as large KOLs are now often paid, people relying on smaller KOLs in their network more
Domestic production
Majority consumed in China, exports growing off a small base
Boutique wineries (50-100k bottles) - looking at more exports, most in Ningxia, the premium winegrowing region
Guochao movement ("national wave") - Chinese supporting domestic brands
US wine in China
9th largest by volume, 6th by value
Punitive tariffs hit imports, tariffs are more than tariffs, but a signal by the gov't not to buy the wines becomes a stigma
US wine doesn't have the legacy or prestige of Bordeaux, Burgundy, or Tuscany, but have the prices
Premium US producers are American centric not good at exports (Ridge being an exception)
Import duties
Including import, consumption, and VAT duties and taxes
Three levels:
Free Trade - ~26% - Chile, NZ, Australia (previously); wines ~1x US price
Baseline - ~48.5% - France, Italy; wines ~1.5x US price
Punitive - US, Australia (now); wines ~2x US price
Australia went off a cliff since tariffs - France benefitted the most, then New Zealand and South Africa
Wine Education important for growth
China's #2 largest student registration for WSET
WSET had to stop in 2021 due to a corporate registration issue - almost back up and running
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