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19 November 2020

Digital and off-line: the two wine sector strategies needed to conquer China

Get to know the territory, study consumers and focus on promotion & digital without forgetting off-line. In brief, this is the formula for increasing Italian wine sales in China, especially in such an unusual year as 2020. This was discussed during the webinar "Wine market in China: the new normality”, organized by Veronafiere-Vinitaly in readiness for Wine to Asia in Shenzhen (20-21 November) and as a step towards the digital edition of Wine2wine Exhibition scheduled 22-24 November.
"2020 was a 'reality check' for the world of wine," explained Jim Boyce, founder of the Grape Wall of China portal. "The good news is that imported wines have good margins on the market but will have to contend with the boom in growth of beer and Chinese baijiu brandy. Unfortunately, wine’s popularity and culture suffers from a systemic problem of detachment from sales, which at times even brings about the loss of end consumers. The wine system must learn how to connect with consumers from the world of beer and cocktails."
Italian wine potentially enjoys certain important advantages. "The Chinese know Italian history and cuisine and adore Made in Italy fashion," Boyce pointed out. Yet competition with craft beer is high, especially during the lockdown, with some breweries organizing travelling sales solutions in strategic locations in cities; they have also promoted local production in Wuhan to support an economy hit hard by Covid. "Today, beer seems to emerge in front in combination with convivial foods, whereas wine has only lowered its prices."
Promotion increasingly involves digital channels, as explained by Cynthia Yang, Vice President of Sunlon, a company in the huge JD.com group, known online as Miss7forwine, whose videos about wine reach as many as one million people: "I work a great deal by combining live streams and shorter videos, which are uploaded to other platforms with the e-commerce platform in mind," Yang explained. Contents range from presentations of wines, labels and prices, through to all the knowledge that lies behind the bottle, from the grape variety, to the vineyard and terroir. Not to mention a connection with Chinese culture, especially combinations with our own cuisine."
For the Chinese Single Day for online purchases on 11 November, Yang presented for the first time in Europe data detailing sales of wines and spirits in the first two minutes from midnight November 10: 200 million yuan (about 25 million euros). The potential is therefore truly enormous.

China ranks fifth in the world for wine consumption by volume, behind the United States, France, Italy and Germany - yet Italy's market share is only around 7%. So what can be done to intercept consumers in a huge country where per capita wine consumption is around 1.2 litres?
Leon Liang - CEO and chief wine educator at Grapea & Co., the school where the only Chinese Master Sommelier Yang LV is a partner - suggests that trade fairs, events and festivals are fundamental, as well as digital channels to create and share content. "As regards sales," said Liang, "design, labels and packaging are very important. Promotion is also essential in order to reach new targets such as women aged 20-35 years, who enjoy a glass at home. It is vital to talk to people and ask them how often they drink wine. People who drink wine once a year should be offered wines that have won awards or other recognition, while people who enjoy a tipple at least once a week should be asked what they drink in order to evaluate their level of knowledge. In any case, Chinese people are curious. In particular, the coastal areas of China are very open to new things and Italian wine."
"Above all, young Chinese people living in coastal cities - especially the Great Bay Area (the Hong Kong-Canton region that focuses on the metropolis of Shenzhen) - may well represent the future for Italian wine," said Veronafiere's manager for Asia, Simone Incontro, in relation to the upcoming Wine to Asia event. "2020 was a difficult year," Incontro summed up, "yet there is huge potential thanks to an entire generation of young people ready to expand the wine market. I am confident about the future."

Two hundred exhibitors will take part in Wine to Asia in Shenzhen making its debut on Friday 20 and Saturday 21 November at the Intercontinental Hotel in Shenzhen. More than 70 wine cellars - alongside their importers and export managers - will attend through the ICE group show. Eight countries are represented in all, with Wines of Chile, Rioja and one of the emerging wine production regions in China: Huailai. The two-day event in Shenzhen will also involve twelve master classes and - not-to-be-missed - two international forums, Living Wine, the largest area ever dedicated to natural wines at an international trade fair."
The webinar was concluded by the CEO of Veronafiere who recalled Veronafiere's twenty years of experience in China... which began with the off-show event in Chengdu and roadshows in first and second tier cities that in 2020 travelled to Shanghai and Xiamen.