Figures showing a drop in overall wine imports to Mainland China hide evidence of emerging consumer demand for lesser known and lower priced labels, argue some merchants.
China’s wine imports fell by 21.3% in volume and 29% in value year on year in January 2014, according to customs data. Many blame the government’s austerity measures for the decrease.
However, some companies are bucking the trend. In Chongqing, where wine imports fell by 62.9% in volume and 76.3% in value in the first quarter of 2014, local retailer Sichuan 1919 Wines & Spirits saw a 65% year-on-year increase in sales by value, said the company’s general manager, Yang Lingjiang.
From 2011 to 2013, Sichuan 1919’s sales rose from RMB200,000 to RMB20m (US$32,000 to $3.2m), Yang told DecanterChina.com.
Even though Yang agrees with other merchants that China’s wine warehouses are overstocked, the figures suggest consumers are still interested if the offer is right.
Yang said that 1919 has benefited from targeting mainstream consumers rather than government officials. ‘Only 5% of our business relies on government consumption, with the rest focusing on the ordinary consumers.’
Lower-priced wines have performed well, he said. ‘The best sellers now are around RMB100-a-bottle. Consumers are much less reliant on famous brands, such as the few classified chateaux, and are becoming much more sophisticated and rational about prices.
‘They know that as long as the distribution channels are credible, there is a good guarantee of quality, even if the price is fairly low.’
He added, ‘The structure of the market has changed. This is what a normal market should be like, and it will grow organically from here.’
Some foreign merchants have also reported higher export sales to China for lower priced wines. Bordeaux-based producer and negociant, Maison Sichel, saw sales to China rise by 30% in 2013, driven by demand for ‘value for money’ Cru Bourgeois level wines.
‘It’s a sign that the market is maturing and that distribution needs to change with it,’ Charles Sichel, the group’s export director for Asia, told DecanterChina.com. Maison Sichel aims to increase its full-time staff in China from two to four this year.
All rights reserved by TI Media Ltd. No part of this publication may be reproduced, distributed or transmitted in any form or by any means without the prior written permission of Decanter.
Only Official Media Partners (see About us) of DecanterChina.com may republish part of the content from the site without prior permission under strict Terms & Conditions. Contact email@example.com to learn about how to become an Official Media Partner of DecanterChina.com.