Wine Intelligence: Australia drives China’s imported wine growth

Australia could soon surpass France as China’s biggest source for imported wines with the most recent report by Wine Intelligence affirming the country’s key role in driving China’s imported wine market.

According to Wine Intelligence’s most recent report, China Landscapes 2018, it shows that imported wine consumption, particularly wines from Australia, continues to rise in the country.

Consumer feedback from Wine Intelligence’s ‘Vinitrac China’ survey has confirmed Australia’s position as a leading imported wine source country – it has the second highest awareness and consumption levels after France: 53% of urban upper-middle class imported wine drinkers in China are aware of Australia as a wine-producing country, while 36% have drunk wine from Australia in the past six months.

In the 12 months ending in March this year, Australia’s wine exports to China soared 51% to AU$1 billion, a record for a single country, making it the most lucrative export market for Australia. In 2019, based on the two countries’ Free Trade Agreement, import tariffs on Australian wines are expected to be eliminated.

French wines still take up the lion’s share of China’s imported wine market, responsible for 41% of all bottled imported wine, followed by Australia’s 26.7%, based on figures from China Association for Imports and Export of Wines and Spirits.

The Wine Intelligence survey conducted over three years collected responses from urban upper middle class residents with at least RMB 5,000 (US$754) in monthly income in 12 different cities.

More importantly, the country’s retail landscape is fast changing as well, with online commerce continuing to gain traction.

Although the proportion of consumers who shop for wine online (48%) has not increased in the past year, the declining use of bricks-and-mortar channels shows e-commerce is continuing to gather momentum.

The retailer usage confirms this trend with China’s leading e-commerce platform JD.com (42%) surpassing Walmart (35%) to become the retailer with the highest proportion of wine drinkers for the first time in the Chinese market. Meanwhile, its main rival Alibaba’s Tmall (33%) came in third, according to the report.

In terms of brand recognition, domestic wine giants Changyu and GreatWall have the highest overall Brand Power scores among all the brands tested in 2018, thanks to their high positioning in the ‘awareness’ and ‘purchase’ indices among all the brands. However, for imported wine brands, DBR Lafite, Yellow Tail and Penfolds are the most recognised among Chinese consumers, according to the report.

Wine Intelligence research director Chuan Zhou commented: “One might think the most successful imported wine brands in China are predominantly from Bordeaux. That might have been true five years ago when imported wine was primarily associated with gifting and business occasions, but as the market is shifting towards personal consumption, more imported brands from Australia, Chile and other major producing countries are building their presence in China and connecting with their audiences.”