The Chinese Wine Industry
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- Date Submitted: 12/01/2010 03:35 AM
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The Chinese Wine Market Industry Analysis
Chinese wine history :
China has a 6,000 year history of grape growing, and a 2,000 year history of wine making, and yet until this century the wine that was made in China was not of a style that would be recognized in the West.
Price barriers :
The desire to embrace western products is the single most important driving force in the adoption of wine as a viable import in China. Alas economics, as usual, is the final arbitrator. With a 750 ml bottle of wine costing around US$.60 it is difficult for the Chinese consumer to spend even the $2- $4 that a bottle of Chinese wine fetches. Imported wines with their average price around US$10 a bottle and up, is far beyond the reach of most consumers. As the cost of living and the economic growth of China continues to skyrocket, there will soon come a day when this price resistance is less dramatic.
The brand loyalty barrier :
The Chinese people have a sense of brand loyalty that almost borders on the fanatic. Once a brand name is established, anything with that name is sure to do well. Exemple of Coca-Cola. Any wine brands in China would do well to follow the coca cola model.
Alcohol related regulations barrier:
As far as distribution and labeling, are almost non existent; although the bureaucracy in China being what it is, this may change at any given moment. This climate of relaxed standards is a mecca for unscrupulous importers and bottlers, and it should be considered that legitimate concerns will have to compete with falsely labeled and adulterated wines as this market explodes.
Duties barriers :
One of the single greatest barriers of exporting wines to China is the duties. This high duty makes it especially difficult to compete at the under US$5 retail level, where most wine is now being sold.
The wine industry competitors :
The main competition for imported wines in China comes not from the Chinese wines, but rather the other forms of alcoholic beverages. The...
Chinese wine history :
China has a 6,000 year history of grape growing, and a 2,000 year history of wine making, and yet until this century the wine that was made in China was not of a style that would be recognized in the West.
Price barriers :
The desire to embrace western products is the single most important driving force in the adoption of wine as a viable import in China. Alas economics, as usual, is the final arbitrator. With a 750 ml bottle of wine costing around US$.60 it is difficult for the Chinese consumer to spend even the $2- $4 that a bottle of Chinese wine fetches. Imported wines with their average price around US$10 a bottle and up, is far beyond the reach of most consumers. As the cost of living and the economic growth of China continues to skyrocket, there will soon come a day when this price resistance is less dramatic.
The brand loyalty barrier :
The Chinese people have a sense of brand loyalty that almost borders on the fanatic. Once a brand name is established, anything with that name is sure to do well. Exemple of Coca-Cola. Any wine brands in China would do well to follow the coca cola model.
Alcohol related regulations barrier:
As far as distribution and labeling, are almost non existent; although the bureaucracy in China being what it is, this may change at any given moment. This climate of relaxed standards is a mecca for unscrupulous importers and bottlers, and it should be considered that legitimate concerns will have to compete with falsely labeled and adulterated wines as this market explodes.
Duties barriers :
One of the single greatest barriers of exporting wines to China is the duties. This high duty makes it especially difficult to compete at the under US$5 retail level, where most wine is now being sold.
The wine industry competitors :
The main competition for imported wines in China comes not from the Chinese wines, but rather the other forms of alcoholic beverages. The...