Nestled in the historic former French Concession area of Shanghai, Wukang Road is distinguished by its elegant London plane trees and officially protected European-style buildings that line its sides. It was here, in a charming red brick house surrounded by a lush garden, that the story of Pudao—a chain of wine retailers and bars—began in 2009.
At the Wukang Road store, guests can sip wine at a wooden table on the terrace or gather with friends in a retro-style private club room adorned with wooden blinds and a wooden ceiling. A Pudao store functions as both a wine shop and bar, and the brand also organizes wine education events, serves wine for business gatherings, and offers tailored wine services.
Having opened its fourth store in Beijing this May—its first location in mainland China outside Shanghai—Pudao continues to expand despite the slowing economy and declining demand for wine. In addition to curating a selection of different wines from 600 to over 1000 and providing an elegant environment, Pudao also champions wine education by organizing wine-tasting events and masterclasses.
Pudao was established by Summergate Fine Wines & Spirits (美夏国际酒业), a prominent wine importer founded in China in 1999. Amid China’s “red obsession” in the early 2000s, Summergate rapidly rose to become one of China’s top 10 wine and spirits importers, operating in mainland China, Hong Kong and Macau.
In the past decade, Pudao has experienced two ownership changes. In 2014, Summergate was acquired by the Australian giant Woolworths for reportedly US$25 million. Nine years later, Woolworths sold Summergate to Wajiu Group (挖酒集团), an emerging B2B cross-border wine company, in 2023 at an undisclosed price. Wajiu now owns both Summergate and Torres China, two leading wine importers in the country.
How has Pudao thrived in a challenging environment, and why is wine education and popularization a key focus of its business? We spoke with Celia Liu (刘屹环), who took over as director of Pudao last year, on the brand’s 15-year journey in an evolving market and its vision.
Evolving Consumers and the Younger Generation
Liu’s journey into wine started in 2011 when she opened her store in her hometown and for years she gained hands-on experience in wine retail. Subsequently, she expanded her career into Baijiu, and for seven years she successfully launched her own sauce-flavor Baijiu brand, demonstrating her entrepreneurial spirit and versatility in navigating different segments of the beverage industry.
In 2023, Cecilia returned to her roots in wine, taking over Pudao, the wine retail division under Summergate, and dedicating herself entirely to the sector. With a wealth of experience spanning both wine and spirits, she brings a unique perspective and expertise to the wine industry, blending her knowledge of retail, branding, and market trends.
Looking back on the evolution of China’s wine market over the past 15 years, Liu described it as having undergone “dramatic changes,” noting that in 2009, Chinese consumers were a “blank slate” when it came to wine knowledge and the wine system. At that time, wine retail was primarily operated by brands, which sold multiple products under their own labels in shops.
“There are more people who love wine and are eager to learn about it in Beijing and Shanghai,” said Liu. “Most people now have some wine knowledge, such as recognizing grape varieties like Cabernet Sauvignon, Pinot Noir, and Chardonnay. While this understanding is far from deep, it marks a significant change compared to the previous situation.”
Even during the pandemic and ensuing economic downturn, as consumers tighten up their purse strings, investment in wine studies is something that consumers haven’t cut back. As Liu observed, among all the products and services offered by Pudao, wine-tasting events were the only category that did not experience an average price drop.
Admittedly, “China’s average wine consumption cannot be compared to that of Europe and the US, where wine is an integral part of daily life—it’s in their blood,” Liu continued, emphasizing the different perception of wine in China. “Overall, wine in China feels somewhat mysterious, as if there is a threshold to cross.” China’s per capita wine consumption stands at just 0.4 liters, ranking 43rd globally. This means average adult Chinese only consume about half a bottle a year, highlighting a wide gap from mature markets, where per capita consumption averages 24.6 liters.
“While we still have a long way to go. Progress is being made, which is a positive sign,” she commented, “Regardless of whether consumption is upgrading or downgrading, the most important issue for wine is its popularization.”
In addition to a deeper understanding of wine, a younger demographic is another notable change in the profile of Chinese wine consumers. At bistros, more young people are drinking wines priced at RMB 100 to 200 (US$ 13.84 to 27.67), or enjoying the happy hours of unlimited drinks: RMB 119 (US$ 16.46) for three hours and RMB 69 (US$ 9.55) for two hours are popular options.
“You can hardly see anyone in a bistro drinking Baijiu,” she ascertained. This shift from the grain spirit to wine, as she explains, is largely driven by the 80s and 90s generations, who are now the main force in society. “Unlike our parents’ generation from the 60s and 70s, who had a deep love for Baijiu, our generation tends to be more selective. Of course, there are still people who are passionate about Baijiu—it remains the dominant spirit. However, there is a growing trend where people, from a somewhat more professional perspective, are beginning to choose wine as their drink of choice for business and corporate occasions.”
Although Pudao’s main focus is on fine wine, Pudao places great value in cultivating the growing segment of young consumers, despite their relatively low budgets. “The demand from the bottom of the pyramid is the most important part: it is our foundation. Without a large base, it will be harder to encourage people to pay for fine wines.” Liu said.
Beijing V.S. Shanghai
“I have a love-hate relationship with wine professionalism,” Liu said when discussing the “threshold” of wine consumption for the Chinese public. “We don’t want wines to appear so professional that they become unapproachable, but we also don’t want them to lack professionalism altogether.”
For Pudao, the strategy is to offer varying levels of wine education tailored to different audiences: providing more in-depth discussions for the fine wine target group while avoiding overly detailed content for the general public, who typically have lower budgets.
In terms of regional differentiation, Beijing and Shanghai, the two cities where Pudao operates, are both first-tier cities but exhibit differences in wine consumption preferences. According to Liu, Shanghai is the mainland Chinese city with the highest acceptance of and deepest understanding of wine, where on-trade consumption is prevalent. It is common for people in Shanghai to enjoy a sip after work or during a stroll—a practice similar to that in major wine-consuming countries but unique in China.
Beijing also has a large group of wine enthusiasts with strong consumption habits. However, compared to drinking out, hosting wine parties at home is more popular. One reason for this may be the weather: Beijing, located in the north, experiences a much longer and colder winter than Shanghai in the southeast, according to her.
“Beijing has strong wine consumption, but unlike the prevalence in Shanghai, it may be concentrated within a smaller group,” Liu said regarding wine consumption in Beijing. “You need to identify this group and earn their trust; of course, the prerequisite is having good products at competitive prices.”
As Liu explained, Pudao operated a store in Beijing from 2011 to 2019, located near the current Beijing branch in the city’s CBD area in Chaoyang district. “Many long-time customers kept asking us about reopening a store in Beijing. Having the support of our old clientele and drawing inspiration from them made us more confident about the new Beijing store,” Liu added.
Post-Covid Challenges and Opportunities
“The pandemic definitely posed a significant challenge for us,” Liu said. Pudao had initially planned to open five new stores in 2024, but due to the slowed economy, the Beijing store ended up being the only new store opened this year.
During and after Covid-19, Pudao experienced a decrease in both the frequency and price of purchases. Group purchases from companies, primarily for business purposes, were more closely tied to economic conditions, and saw a substantial decline.
Personal consumption, on the other hand, remained relatively stable despite the overall downturn. To adapt to the economic challenges resulting from COVID-19, instead of relying on group purchases, Pudao focused on increasing the proportion of lifestyle wine consumption, which required investment in educational events.
Wine education and popularization is never an easy task, especially during challenging times. “We have to work very hard. Nowadays, we can only achieve half the desired results with twice the effort,” Liu said, recalling that Pudao organized 15 wine events in August and planned to conduct 13 events in November. “Our entire team is working extremely hard, fighting together for our wine career. Only with such effort can we expect a slight increase compared to last year.”
Maintaining client relationships is another key factor in growing Pudao’s business. To retain clients, Pudao has implemented a membership system that provides additional perks at higher membership levels. Additionally, Pudao is developing its online consumer community by creating group chats for regular customers at each store, sharing information about new products and events, and offering discounts and priority registration to group members.
Amid the challenges, Liu believes that Pudao and other wine retailers in China are not merely competitors; they are both competing and cooperating. “Many people are interested in wine now. What we need to do is popularize wine together so that we can share a larger piece of the pie,” Liu said.
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