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Uncorking a Wine Business in China

Wine is becoming a huge business in China. The boom is driven by numerous economic factors. While the market for wine in China is growing in leaps and bounds, it isn’t easy for western vintners and distributors to take advantage of these opportunities. Cultural and marketing obstacles are everywhere. We have studied the situation in depth to give our clients an insider’s view of the burgeoning Chinese market for wine.

 

Our findings are based on a recent campaign that we managed for a French wine distributor that’s housed in Beijing. What we learned can easily be applied to other distributors of western wines who are looking to break into the market in China.

 

Alcoholic drinks have been known and enjoyed in China for centuries. In fact, a traditional, grain-based drink known as baijiu has been used to commemorate special occasions for approximately 5,000 years and is widely considered the country’s national drink. However, baijiu is known as a “man’s drink” thanks to its 50 to 60 percent alcohol by volume content. That tradition has left a large segment of China’s population, namely women, unserved because it is not socially acceptable for women to consume beverages with such high alcohol content.

 

It is little surprise then that women are in many ways driving the increased demand for wine in China. They are seeking a drink that is more suited to their tastes and doesn’t have the alcohol content that is similar to that of baijiu. As China’s culture evolves, it similarly is becoming more acceptable for women to consume alcohol at social occasions. More women also are joining the workforce and accordingly are drinking more often in an effort to put themselves on the equal footing with male counterparts.

 

Men also are increasingly looking to wine as a complement to meals and various social occasions. The increased demand from men and women is coupled to an economic boom that has led to explosive growth in the Chinese middle class. As a growing number of people acquire disposable income, the interest in wine is increasing. That’s because they can now afford to buy an imported beverage rather than just the local baijiu.

 

Another factor that helps to explain the boom in imported wine sales in China is that people tend not to trust local brands. Consumers in China are convinced that foreign wines are inherently superior in quality to local alcoholic beverages. This perception comes after years of regulation of the local alcoholic beverage market by the Chinese government, which included several programs aimed at discouraging the consumption of alcohol. The truth is that the Chinese public is thirsty for imported wines, but they need access and a guiding hand to help them make wise choices regarding which vintages they buy.

 

When western wine firms first began marketing in China, they focused their efforts in large cities like Shanghai and Beijing. While these cities do have enormous populations, the reality is that China has a far larger population that lives in rural areas and smaller cities. This creates a dilemma. How do western firms market their wines to Chinese consumers who are eager to try their product?

 

With wine sales in China being expected to grow by nearly 40 percent by 2020, answering that question has become imperative. Unfortunately, traditional marketing methods that are successful in the west rarely make an impression in China. The cultural divide is too wide.

 

As with many western products that are looking to break into the market in China, the answer is to find social media influencers who can get the word out. People in China tend to trust the word of a social media celebrity far more than they do a traditional advertising campaign.

 

That is vital because experience tells us that the Chinese consumer likes a recognizable brand name. If someone they trust recommends a particular wine label, shoppers will seek it out the next time they are looking for a bottle. They are far more certain to do this after being introduced to a brand on social media than they are if they see a brand promoted through more traditional channels.

 

The fact that social media is deeply embedded in the Chinese culture cannot be overstated. Incredibly popular platforms like WeChat and Weibo are loaded with influential users who have thousands of followers. With a well-placed mention from just one or two key opinion leaders, a western wine distributor may discover a large new market for their product.

 

Many Chinese people are still in the early stages of educating themselves about wine. The difficulty of marketing to them is part of the reason why certain wines, like champagne, have been slow to catch on in the country. People just don’t know much about wines, which may make them reluctant to branch out to try new labels. However, if a vintner could connect with an influential person on Chinese social media, they would soon see a wave of interest in their product. A well-placed endorsement from someone with a devoted following is precisely what’s needed to become a familiar brand to Chinese shoppers.

 

Successful influencers are good at educating their followers who are eager to learn and experience new wines and champagnes. One blogger advised her followers to explore the sweeter range of champagnes – extra dry and demi-sec cuvees – in response to complaints that brute is too high in acidity.

 

Authentic content also helps to resolve multiple translation issues – from brand name to specific descriptions of wine nuances.

 

Of course, the difficulty is finding the right influencers to get the campaign started off on the right foot. That’s where iconKOL comes into the picture. We have the inside track when it comes to finding bloggers in China who are key opinion leaders. That means that we can help western companies forge effective connections with bloggers who can help them establish their brand in China.

 

 

 

 

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