Why China’s Smaller Cities Are the Future of Wine

Until recently, wineries and producers looking to expand into China have focused their efforts on just four cities: Shanghai, the country’s wine capital; Shenzhen, the boom town bordering Hong Kong; Chengdu, the vibrant hub of Southwest China; and Beijing, the capital. These so-called “first-tier” cities boast massive populations, advanced infrastructure, and robust GDPs, making them the traditional targets for foreign wine brands.

However, growth in these urban powerhouses is becoming increasingly difficult. The market is saturated, competition is intense, and the economic climate is shifting. As a result, it’s the smaller second- and third-tier cities that now hold the key to the future of wine sales in China.

While first-tier cities still retain their allure, they are also losing momentum. Skyrocketing living costs, soaring housing prices, and relentless work cultures have taken a toll on residents’ disposable income and lifestyle choices. Fresh graduates are opting to “lie flat” rather than engage in a gruelling 996 (9 a.m. to 9 p.m., six-day) work culture, and white-collar professionals face rising pressures amid wage cuts and mass layoffs.

These cities, once the engines of consumer growth, are now being hit hardest by the economic downturn. With their high exposure to financial and tech sectors, their primary consumers—typically high-income earners—are scaling back spending. The property market’s decline has also had a disproportionate impact on these cities. Given their already inflated real estate prices, any market downturn triggers a sharper perceived drop in household wealth, directly dampening consumer confidence and spending.

In contrast, second-, third-, and even fourth-tier cities present a different story—one of rising opportunity. With more affordable housing, lower living costs, and a more balanced lifestyle, residents in cities such as Dalian (Liaoning), Hefei (Anhui), and Guiyang (Guizhou) are better positioned to spend on non-essential categories like wine. These cities also benefit from tech advances, solid infrastructure and growing middle-class populations, but without the intense pressure and volatility seen in top-tier markets.

Moreover, these cities are less exposed to the financial sector and have been less affected by the downturn in real estate. In fact, falling property prices have in some cases redirected funds from potential home purchases toward discretionary spending, further unlocking consumption potential. For wine, a product that often symbolizes lifestyle and aspiration, this shift in spending habits could be transformative.

This is why it’s critical to examine not just where China’s top 100 wine importers are located, but also where future growth is likely to emerge. Our data analysis reveals that nearly 50 of the top 100 wine importers are concentrated in East China—including Shandong, Jiangsu, Anhui, Zhejiang, Fujian, and Jiangxi provinces, along with the municipality of Shanghai. This region alone accounts for 69% of China’s total wine import value, underscoring its dominance—but also hinting at market saturation.

Southwest China, by contrast, imported just US$27.37 million worth of wine last year. Yet this region—which includes Sichuan, Guizhou, Yunnan, Chongqing and the Tibet Autonomous Region—is experiencing one of the fastest rates of premiumization in the country. The faster growth in value compared to volume indicates a rising preference for higher-quality wines. While still developing, this region is becoming more sophisticated and has the potential to evolve into a nationally significant wine hub.

The breakdown of China’s Top 100 Wine Importers by region—North China, Northeast China, East China, South Central China, Southwest China, and Northwest China—offers a clearer picture of how market power is shifting. As consumption patterns evolve and new wealth emerges outside traditional power centers, it’s becoming increasingly evident that the future of wine in China lies not just in its major cities, but in the growing appetite of its second- and third-tier ones.

Download our latest China’s Top 100 Wine Importers here, priced at US$600.