Golden age of wine: Eight reasons why Chinese consumers are living in one…

wine enthusiast magazine cover january february issue 2014

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[This is an English version of a story I wrote for the Chinese edition of Wine Enthusiast.]

By Jim Boyce

This past year saw wine imports grow by baby steps instead of giant leaps. Warehouse shelves creak beneath the weight of unsold stock. Austerity measures sharply cut the big entertainment budgets of officials. Key Chinese producers struggle to maintain market share.

A forecast of gloom and doom hovers over the wine sector in China. But the silver lining of this cloud comes in the form of an oft-ignored force: consumers. In fact, one might argue they are in a golden era, and an increasingly brighter one at that. Here are eight good things Chinese consumers are getting more of:

Value: Thousands of new importers and distributors joined the field over the past five years in a belief that selling wine would be an easy win. Instead, it turned out to be tougher than uncorking a bottle with your teeth. We have too many players and, in turn, too much wine in the game. Companies must now redouble their efforts to appeal to those still opening their wallets and purses. And given the government’s austerity measures, this more than ever means consumers at large. That should translate into lower prices and better value.

Price-checking: Just as important,  consumers are better armed to discern that value. They might once have stood in a shop or supermarket aisle, faced a shelf of French wine and not known if that rmb300 bottle was fairly priced or some ridiculously marked up plonk. With the smart phone era, people can check brands, prices and tasting notes and much more on the spot or even at home before they buy. The options range from international sites like Wine-Searcher, which put prices into a global context, to Chinese-language applications like Wochacha that help reveal whether a bottle is a bargain or a bust.

Choice: China and its billion-plus consumers remain the world’s most enticing wine market. That translates into an amazing range of wines. From Albarino to Zinfindel, Argentina to New Zealand, cheap plonk to trophy wines, we find bottles from most every producing nation, grape variety and price range. Importers like ASC, Summergate and Torres carry hundreds of wines from over a dozen nations, while niche suppliers focus on particular regions (such as Burgundy or Napa), nations (such as Spain or South Africa) and even styles (such as cool climate wines). To give an example, consumers in Beijing can walk into a branch of imported goods shops like Jenny Lou’s or April Gourmet and find hundreds of wines, a large number priced at less than rmb100.

Distribution: It is one thing to have lots of wine and quite another to get it into the hands – and mouths – of consumers. As slowly and surely as a spider weaves its web, distributors have crisscrossed the nation with networks. Aussino can share its portfolio of over 500 wines, and facilitate wine dinners, with its more than 100 retail outlets, clubs and restaurants – many of them franchises — throughout China. Most major importers have offices scattered around the country and an ability to deliver reliable brands most anywhere. From hypermarkets, supermarkets and corner stores to websites like generalist Taobao, wine-specific YesMyWine and even clubs and restaurants like M1NT and Temple, it is easier than ever for consumers to get wine. Need something cheap and decent at 4 AM? If you are close to a 7-ELEVEN in Beijing, grab a bottle of Concha y Toro for rmb70.

Information: Wine is intimidating enough without having to read about it in a foreign language. That makes the rapid rise of Chinese-language information crucial. Publishers like Wine Enthusiast are delivering more of it than ever to consumers, particularly via the Internet. But it goes beyond that. The rise of social media means word-of-mouth is also helping consumers. A group of your friends posted about a bottle of particularly zesty New Zealand Sauvignon Blanc they loved? Within seconds you can find out where to get it, too. In a country as wired as China, this underscores the growing power of consumers.

Privacy: Also taking the intimidation out of wine are on-line retailers. Rather than have a restaurant waiter or shop clerk stare and make you worry about picking the “right” bottle, you can investigate wines at your own pace and get them delivered at home. Prices are competitive, the choice is impressive and the product ends up in your hands without anyone around to question why you are interested in comparing Merlot from France, the United States and Romania. It is easier now to “do your own thing”.

Access: Superb value is available via dinners with visiting winemakers. While retail prices in China tend to be high, due to nearly 48 percent in tariffs and duties on most wines, events feel almost subsidized. Consider a boozy five-course dinner at a five-star hotel with famed German heavyweight Ernst Loosen. I’ve seen that one advertised for rmb388. In some parts of the world, such dinners would be far more expensive and might require good connections to get a seat. In China, distributors must often work to fill 30 seats in a city of millions. Even better, we see more such events in smaller and more remote places. Take advantage while it lasts.

Local quality: Finally, while most of these benefits refer to imported wines, it is also important to note that we see much better wines being made in China. Grace Vineyard in Shanxi, Domaine Helan Mountain in Ningxia and Great River Hill in Shandong are among those making reasonably good products at reasonably good prices. A combination of quality inexpensive imports and greater consumer knowledge is putting pressure on Chinese producers to provide more quality and we see some local operations responding well to the challenge.

All of this is not to say the Chinese wine scene is a garden of Rose. Consumers still face relatively high prices, cheap wines passed off at exorbitant prices and plenty of sub-par local plonk, not to mention serious concerns about fakes. But the growing amount of wine choice, value and information provides golden opportunities for today’s consumer in China and hope for an increasingly bright future.

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