Chinese demand for South African wine continues to rise

Perfect Wines of South Africa, a brand formed in 2013 between L’Huguenot Vineyards and Chinese distributor Yangzhou Perfect China, now accounts for 25% of all South African wine sold in China.

South African wine is challenging the dominance of French wine in the Chinese market (Credit: iStock)

Earlier this year, a Vinexpo report showed that by 2021, China would be the second largest wine market in the world after the US.

Over the next five years, China’s consumption is expected to rise by over one third to $23 billion when it will reach a volume of 192 million cases.

It would seem that the chairman of South African wine producer L’Huguenot Vineyards, Hein Koegelenberg, has excellent foresight, after forming a partnership with Yangzhou Perfect China all the way back in 2013.

This union occurred at just the right time, with China becoming the world’s largest consumer of red wine just a year later in 2014.

The company now exports three South African brands to China: L’Huguenot, Leopard’s Leap and La Motte.

The company have been taking advantage of China’s massive online market, with 49% of the company’s foreign wines being sold through the internet last year.

L’Huguenot, much like other South African wine companies, have been marketing themselves in China by hosting wine tasting events in hotels and high-end restaurants in China. However, they’ve gone above and beyond just this.

Renier Van Deventer, head winemaker at L’Huguenot and Leopard’s Leap, says the Chinese palate is very different from the South African palate.

So to find the wines that best suited the tastes of Chinese cuisine, they did a lot of research in China, but also invited Chinese clients to their wineries in South Africa.

This has definitely paid off, with around 13,000 stores now stocking L’Huguenot wine in China, and around 1,500 salespeople exposing consumers to new wines.

The 49% Chinese import tax is a bitter pill to swallow when competing with French wine producers, which export the most wine to China by country of origin.

As South African wine has a seal of origin and isn’t as well known as some French wine brands, they do not have as many problems with counterfeit wine.

Koegelenberg is optimistic about the future though. “We come from a bad history where we couldn’t plant in all regions [due to apartheid laws]. Now we are planting. So all of a sudden winemakers in South Africa are making excellent wines.”