How to sell wine in China: A quickstart guide for exporters
If you’re interested in selling wine in China, you probably have tons of questions.
Is it worth exporting wine to China? How big is the Chinese wine market? What should your strategy be?
In this quickstart guide for exporters, we answer the most fundamental questions about exporting wine to China.
So, whether you’re a trader looking to tap into the Chinese market or an independent winery searching for new opportunities, China may hold the keys to your future success.
How big is the Chinese wine market?
Let’s cut to the chase: The wine industry in China is big – and it’s set to continue growing.
Research from 2019 revealed that China was the fifth leading wine consumer worldwide, after the United States, Italy, France, and Germany.
Now, that’s all very impressive, but what does it all mean for you?
In short, although competition among wine brands is increasing, China is still considered an emerging market for grape wine. As a result, there are plenty of opportunities for new brands to enter China’s wine industry.
What do I need to know about the wine industry in China?
The Chinese wine market isn’t like the established western markets in countries like the UK and France.
For starters, it’s different from what we see in the west. For example, rice wine is the most popular alcoholic drink in China, and drinking grape wines isn’t part of the mainstream culture.
So, where does grape wine fit into the picture?
Right now, for grape wine – it’s primarily the premium market that’s surging. Consequently, budget imported wines may find it challenging to gain traction in the Chinese wine market.
Another thing to note is that red wine is the most popular type of wine in China. In fact, China overtook France and Italy to become the world’s largest red wine consumer in 2014.
All in all, Chinese consumers typically want high quality, elegant red wines at accessible prices.
Does China produce wine?
Yes, China produces vast quantities of grape wine, mainly for the domestic market. In 2019, China produced more than 800 million litres of grape wine, and the country boasts the second-largest vineyard area in the world.
The most popular brand of domestic red grape wine in China is Changyu. In 2017, Changyu sold approximately 451 million litres of its red wine. So, despite the domestic competitors in the market, your key competitors are likely to be other premium imported wine brands if you plan to export wine to China.
Where should you sell wine in China?
China is a big country – it’s actually 0.94 times the size of Europe. And just like Europe, each region of China has its own culture and preferences when it comes to wine.
For example, bigger cities such as Beijing, Shanghai, Shenzhen, and Guangzhou have a demand for a diverse selection of imported wines. In these cities, it’s vital to offer a unique brand story and effectively differentiate your wines from competitors’.
On the other hand, smaller cities usually have less demand for a diverse selection of imported wines, but there’s also less competition from other imported wines. Consumers may need to be educated and nurtured before they try a new imported wine. Typical and classic wine branding is often preferred.
It’s also worth mentioning that bigger cities often have plenty of traditional and boutique distribution channels to explore. However, there may only be a handful of traditional distribution channels available in second and third-tier cities.
So, where should you sell wine in China?
Although the bigger cities may seem like an exciting prospect, there are more than 160 cities in China with over one million people – many of which are in central China. These smaller cities provide an enormous opportunity for ambitious and creative wine exporters.
How to export wine to China
The most popular route used when exporting wine to China is to establish a partnership with a local wine importer or distributor.
These domestic businesses already have the distribution channels, connections, and experience you need to sell wine in China. They can help you sell your wines in restaurants, stores, and online quickly.
Broadly speaking, there are two types of Chinese wine importers: traditional importers and boutique importers.
Traditional importers have distribution channels to hotels, restaurants, supermarkets, and food & beverage stores. Many of these importers can distribute your wines nationwide and help you gain market share in smaller cities.
Unsurprisingly, traditional importers often handle large quantities of product and typically target more mainstream wine drinkers.
On the other hand, boutique wine importers usually work with smaller, specialised wine companies.
These companies rarely have the capital needed to break into traditional distribution channels. Consequently, they typically focus on the niche markets found in bigger cities like Beijing and Shanghai.
Due to their smaller budgets and niche audiences, boutique wine importers are usually very active online and on China’s largest messaging/social media platform WeChat.
So, which type of wine distributor should you work with?
The type of company you partner with largely depends on how much wine you produce and what your niche is.
If you can produce massive quantities of premium wine, traditional importers focused on smaller cities may be the way to go. Alternatively, if you run a small French family business specialising in organic shiraz, consider working with a boutique importer that can help you stand out from the competition in first-tier cities.
That said, large wineries producing many different types of wine may want to work with both types of distributor.
5 ways to find a Chinese wine distributor
Now that you have an idea of the type of Chinese wine distributor you’d like to partner with, it’s time to start searching for one. Here are five different ways to find a distributor to help you break into the Chinese wine market.
1. Third-Party distribution management companies
Large wineries or those new to the wine industry in China may want to consider working with a third-party distribution management company.
These companies are designed to help wine exporters gain a foothold in the Chinese wine market by handling the necessary research, strategic planning, and administration.
At first, third-party management companies will work to understand your company’s situation, objectives, and brand. Then they’ll conduct market analysis to identify suitable opportunities and key competitors. Finally, they’ll promote your wines to distributors directly, online, and at trade fairs.
They can also handle administrative tasks, like translating your product materials, registering your products, and label filing.
Third-party distribution management companies typically charge fees for a package of services.
2. Trade fairs
You can find a distributor at one of the many wine trade fairs in China, such as:
Although trade fairs took a hit due to the outbreak of COVID-19, these events are quickly regaining their footing. You can attend these trade shows yourself or have a third-party visit them on your behalf.
3. Connections and word-of-mouth
Word-of-mouth is a powerful force in Chinese business, and it’s not uncommon for partnerships to be established through mutual connections.
So, if you know someone who works with a food or drink distributor in China or who has knowledge of the Chinese wine market, consider reaching out and asking for an introduction to suitable partners.
4. Finding wine distributors online
Although it can be time-consuming to sift through the listings, it’s possible to find a Chinese wine distributor online. Sometimes you’ll need to pay a small fee to gain access to a curated list of distributors.
5. Chambers of Commerce
Finally, your country’s Chambers of Commerce may be able to connect you to suitable distribution partners in China. Contact your local Chambers of Commerce to see if they can help.
Summary: How to export wine to China
Remember, the Chinese wine market differs from more established western markets in a few key ways.
- Red wine is far more popular in China than white wine.
- Grape wine on the premium market is growing the fastest.
There are two main types of Chinese wine distributors. Traditional wine distributors typically have more reach in second and third-tier cities and focus on selling large quantities of wine. Boutique wine distributors usually sell specialist wines to niche audiences in first-tier cities like Beijing and Shanghai.
You can take advantage of a few different methods to find a Chinese importer or distributor. For example, you could:
- Partner with a third-party distribution management company
- Attend a trade fair to connect with importers and distributors
- Reach out to contacts in your network to ask for recommendations and introductions
- Research wine importers and distributors online
- Contact your country’s Chambers of Commerce for advice and guidance
With the right partners and a solid strategy, you could successfully expand your business and start selling wine in China in 2021.