China’s wine consumption has fallen by more than half since its 2018 peak, according to estimates from the International Organisation of Vine and Wine, one of the sharpest contractions the global industry has ever recorded. The collapse has left producers, importers and retailers scrambling for explanations and, more urgently, for a way forward.
At a panel discussion last month marking ASC Fine Wines’ 30th anniversary in Shanghai, some of China’s most prominent wine industry figures offered a diagnosis. The picture that emerged was sobering: the boom was built on foundations far shakier than anyone wanted to admit, and the forces that brought it down were more numerous and more structural than a slowing economy alone.
The numbers help explain why. Wang Xuwei, deputy secretary-general of the China Chamber of Commerce of Import & Export of Foodstuffs and Native Produce & Animal By-Products (CFNA), an organisation that sits directly under China’s Ministry of Commerce and regulates the country’s alcoholic drinks industry, estimated baijiu sales at somewhere between 700 and 800 billion yuan annually, against wine’s 20 to 30 billion, a ratio of roughly 30 to one. Wine’s share of China’s total alcohol market amounts to perhaps 2 to 3%. Even that figure comes with a caveat. “There is no single authoritative, clean data source,” Wang acknowledged. “But from the industry’s sense of things, the share has certainly declined.”
The roots of the problem stretch back to the boom itself. “The rapid rise of wine in China was closely tied to the country’s property-driven economic growth,” said Wang, whose organization is directly under China’s Ministry of Commerce and regulates China’s alcoholic drinks industry.
As the property sector weakened, so did the occasions that sustained wine sales: business entertainment, corporate gifting, government banquets. Then China’s anti-corruption campaign swept through, curtailing lavish spending on alcohol across government and the private sector. Baijiu, already dominant, tightened its grip on premium drinking occasions. Wine’s foundations, never as solid as the numbers suggested, gave way, Wang concluded.
But Yang Zhengjian, founder of Chinese language media Wine Business Observer (WBO), pointed to a force that is rarely named so directly: geopolitics.
After 2018, he argued, the deepening cultural and economic decoupling between China and the West accelerated wine’s decline. As China’s economy turned increasingly inward, baijiu didn’t just hold its ground, it actively gained from the retreat of Western influence. Its boom in those years, Yang suggested, was in no small part a consequence of decoupling. Wine, as a foreign category carrying Western cultural associations, bore the cost.
For Yang, the structural collapse also exposed a more fundamental failure: the industry had tried to run before it could walk.
“The market advanced before it matured,” he said. “Wine consumers were never fully cultivated as a lifestyle habit.”
The comparison he reached for was coffee. Brands like Luckin Coffee built a mass market by making the category affordable and accessible, creating millions of habitual drinkers. Wine took the opposite path – years of education, certification programmes and premium positioning, with little effort to build everyday consumption. “We skipped a stage,” Yang said. “The result is the situation we see today.”
Part of what made that everyday habit so difficult to build is that wine in China was never truly domesticated in the way it has been across much of Europe. In Western markets, wine is routine – picked up alongside groceries, opened on a weeknight, consumed without occasion. In China, it has remained largely ceremonial: something poured at gatherings, celebrations and specific social moments, rarely if ever a fixture of daily life. That difference in baseline behaviour made the category far more vulnerable once the social and economic conditions that drove its growth began to erode.
CONSUMERS HAVE CHANGED
Yet the panellists were careful to resist the narrative of terminal decline. Chinese wine consumers, they argued, have not disappeared. They have changed. Wang Fang, owner of Ningxia’s Kanaan Winery, put it plainly: “In the past, people bought wine for their boss, their clients or their friends. Today they buy wine for themselves.”
That shift from status symbol to source of personal enjoyment has reshuffled the category. Heavy red wines tied to formal banquets have contracted sharply. Lighter styles, whites, sparkling wines and fruit-based beverages are gaining ground. The drinking occasion has moved from the boardroom to the living room, and with it, what consumers want from a bottle has changed entirely.
A further split is opening up within the Chinese market itself. Traditional wine enthusiasts continue to seek out classic styles, but younger drinkers are increasingly drawn to sweeter profiles, lower-alcohol products, wine-based cocktails and hybrid categories that don’t fit neatly into conventional wine thinking. These newer segments remain a minority of overall consumption, but several panellists believe they represent one of the more credible avenues for future growth.
Professor Zou Deqiang of Fudan University who specialises in consumer studies and marketing, argued that the wine industry has been too slow to read any of these shifts. “Consumers don’t live in the wine industry,” he said. “They live in their own reality.” While coffee, ready-to-drink beverages, beauty products and even collectible toys have rapidly adapted to China’s digital-age consumer – building communities, speaking through new channels, giving people things to share – wine has often lagged, still speaking the language of terroir and technical detail to an audience that has largely moved on.
The panel also pushed back against the tendency to treat China as a single, legible market. Consumer preferences diverge sharply across regions, age groups and platforms. “China is not one country-sized market,” said Zou. “It is a combination of many different markets.” A one-size-fits-all strategy, he warned, rarely works – and works least of all in a moment when the market is fragmenting rather than consolidating.
For producers still hoping to find their footing there, the advice was blunt. “Do your research first,” said Yang. “Understand how China’s wine market has changed and how consumers have changed. Don’t come blindly. Your product may not have a clear opportunity in China.”
Wang Xuwei urged a similar precision: stop targeting China as a whole and start identifying specific customer segments, then find the right local partners to reach them. Build relationships, not just transactions. Understand how people communicate, what they watch, what they share.
“I’m still looking for the answer myself. I share many of the same questions and frustrations as everyone else here,” Wang Fang admitted. “If I had to offer one piece of advice today, it would simply be this: work closely with ASC.”
Discover more from Vino Joy News
Subscribe to get the latest posts sent to your email.
