At a recent seminar organised by WWXplorer and HKTDC during the Hong Kong International Wine and Spirits Fair, Alice Tsang, assistant principal economist at HKTDC, shared research results on China’s wine market, after surveying 2,400 respondents living in 10 different mainland cities aged between 20 and 60.
The respondents consist of middle class members from mainland China, and fall into three groups of monthly household income, RMB 8,000+ , RMB 9,000+ and RMB 15,000+ ( or US$1,140+, 1,280+, 2,135+).
Here are key takeaways from her presentation.
Bigger not better
According to Alice Tsang, bigger bottle size is not necessarily the preferred bottling for the Chinese wine market. According to the report, it found that 73% of respondents prefer smaller bottle size such as 375ml especially among female respondents (80%). The idea of small bottling was made popular in recent years after key KOLs in the country such as Lady Penguin, arguably the most influential social media personality in China’s wine market with millions of followers, advocated drinking wine before bedtime for ‘beauty’ purpose.
Chinese wine on the rise
French wine is still the most favourable wine among Chinese drinkers (75%), but interestingly China is emerging as the second most popular wine production region (46%), according to the HKTDC report, followed y Italy (30%), Australia (23%), Chile (22%) and Spain (18%).
Are all the wines shipped the Hong Kong consumed within the city? No. In fact, according to figures released by HKTDC, Hong Kong exported US$439 million worth of wines, last year of which 84.4% to mainland China. To put it in context, the total imports of wines in Hong Kong last year was HK$12 billion (US$1.5 billion), which means roughly a third of wines shipped to Hong Kong ended up on the mainland each year.
In the first half of 2019, however, due to a slowdown in mainland wine market, re-exports of imported wines in Hong Kong slowed consequently. In January-June 2019, total exports of wine dropped by 64.0% by value, after a decline of 22.5% last year, says HKTDC.
Health comes first
In China different from western countries where wine is traditionally consumed as part of dining ritual. For all the respondents surveyed by HKTDC, the primary reason for wine consumption is linked to health, ahead of social status embodiment or beauty. Reports in China are linking red wine with perceived health benefits such as prevention of heart disease and ageing.
One of the most surprising findings from the HKTDC report presented by Tsang is that a large portion of consumers prefer to drink wine at home. 74% of the respondents choose home as prime occasion for wine drinking, followed by social gathering, dining out alone or with family, banquet and business event. Among all different categories of wines, rosé wine is a category that drinkers are least familiar with, as 50% of the drinkers admitted they seldom drink it. Interestingly asked about the price they are comfortable with paying, RMB 200 (US$28.5) per bottle is the sweet spot.
It’s all about the taste
Sometimes, it’s not always about the price, and it certainly is true with Chinese wine consumers. According to the HKTDC report, taste is the most important factor when making a purchasing decision (48%), which is closely followed by brand (40%). Grape varieties, quality certification, wine type, country of origin, but price for the respondents is the least important factor.
Wine purchase is offline
Although much has been talked about China’s online shopping, and how e-commerce is revolutionizing retail scene. For wine purchases however traditional physical stores are still preferred over online shops. Tsang says supermarket/hypermarket, specialist wine outlet and boutique supermarkets are favoured by wine consumers. Interestingly lower income households have less trust in online wine shopping, whereas consumers with higher income (RMB 15,000+) are more open to online purchases.