China is one of the largest and fastest-growing wine markets in the world and now the most valuable export market for Australian wine. According to Wine Australia’s latest export report, exports to the Chinese mainland grew by 44 per cent to $607 million, accounting for 26 per cent of Australia’s wine exports. This latest growth in Australian wine in China means that the market has now grown consistently since 2015.
Premiumisation drives growth
One of the key drivers behind this expansion, has been the spectacular growth in premium bottled wines in China. Bottled wines now account for 94 per cent of the total export value, while bottled wines priced above $10 AUD/litre account for 40 per cent of the total export value. Premiumisation within Australian wine has been a feature in other key markets, notably the US, but the rate of premiumisation in China has been little short of phenomenal.
Why China is a challenging market?
As anyone who has traded wine in China will tell you, the Chinese market is different to the rest of the world. Firstly, Chinese people do not have an established wine culture. Gifting is one of the key reasons for purchasing wines. As a result, they are keener on well-known brands and prestigious, expensive wines. Another challenge is that the majority of Chinese consumers have very limited wine knowledge. As the quality of many of the wines available in the market is questionable, consumers are less confident about purchasing wines they’ve never heard of. Moreover, the ‘ganbei’ or ‘empty your glass’ drinking custom in China also allow less patience for them to taste and enjoy the beauty of wines.
The emergence of China's middle class
But things are changing rapidly, especially in the first-tier cities, as the emerging middle-class consumers are more exposed to Western food and wine culture. A growing number of people enjoy wine by themselves or with their families and friends. Wine knowledge is also growing and there is strong interest in discovering lesser-known but premium wineries. These are all key factors driving the huge growth of Australian wine consumption in China.
To help Australian wineries make the most of the opportunities that the Chinese market offers, Wine Australia has designed a range of programs to promote Australian wine to the trade, media and consumers. For example, Wine Australia has developed the Trade Specialist Program a scheme that’s been designed to engage, recognise and encourage the Chinese wine trade to promote Australian wine.
What is the Trade Specialist program?
The Wine Australia Trade Specialist Program is an annual marketing initiative which invites applicants from a variety of channels - importers, distributors, on and off-trade establishments, online sales and educators - to become recognised as professionals with detailed knowledge of Australian wine. The program has become popular and well respected in the Chinese wine trade. Companies and individuals that become recognised as Trade Specialists can use the term ‘Australian Wine Trade Specialist’ in their marketing collateral. There are 167 Trade Specialists at present and there are real benefits to being recognised as a specialist:
‘Being certified as an ‘Australian Wine Trade Specialist’ is recognition for our company being professional in selling Australian wines. The fact that we are officially certified enhances our trustworthy image among our customers. We also received Wine Australia’s support in our promotional projects, achieving sales growth in Australian wine.’
Alan Qian, Ameile Wine Nanjing (Specialist Retailer).
How do we work with the Chinese specialists?
Wine Australia works with trade specialists mainly through our marketing programs and educational courses. We organise marketing programs which includes participating in key trade shows and holding an annual roadshow. Key Australian Wine Trade Specialists in the importer category join us as exhibitors. Specialists of all categories are also invited to attend our events to discover the diversity and quality of premium Australian wine. We also work with key influencers across the provinces and regions in China during our market programs. An event like our annual China Roadshow, for example, allows us to engage with key local trade influencers.
‘Every year a large proportion of our marketing expense is spent in taking part in Wine Australia’s market programs in China, such as taking a booth at Chengdu Fair and China Roadshow.. At the Roadshow this May, our booth was surrounded with huge crowds of buyers, many of whom had quite sufficient knowledge on Australian wine, as well as clear requirements ovf what they wanted from Australia.’
Baron Hong, General Manager of Pran Wines (Specialist - importer)
In addition to the marketing programs, we also provide Australian wine education to the specialists. We offer Australian wine tasting classes to program applicants before they get certified and they are invited to our themed masterclasses and events in the market.
‘I have attended many activities organised by Wine Australia, especially masterclasses, earlier this year, the master class on aged Australian wine presented by Fongyee Walker MW, enabled me to have a brand-new understanding towards Hunter Valley Semillon.
King Wang from Roosevelt Wine Cellar (Specialist – F&B/Sommelier)
How do we recognise their efforts?
Wine Australia organises the annual China Awards - one of the most important events of the year in the China marketing calendar - to recognise the best performing trade specialists across a number of categories. Awards presented at this event include Best Importer, Best Retailer, Best F&B and Best Educator. The Awards are presented at a grand gala dinner, recognising the trade’s contribution to promoting Australian wine. This event also encourages the specialists to keep promoting and selling Australian wine in a hugely competitive market. The Awards also include tastings and masterclasses, creating an opportunity to attract more trade members to experience and discover Australian wine creating more advocates for Australian wine in China.
Every year, the winners of the China Awards get the chance to visit Australia during vintage. This doesn’t just benefit the winners, who get the chance to witness Australian wine being made first-hand. The visits also benefit the wineries as it gives them the opportunity to meet key Chinese wine trade figures.
‘Last year (2016) we were honoured to be bestowed ‘Best Importer’ at Wine Australia China Awards, and we got a chance to visit Australian wine regions in April this year. This is not only a recognition on our success of promoting Australian wines for 21 years, but also a rewarding experience for our team as they can communicate with our clients and consumers with better understandings towards Australian wine.’
Leslie Shao, General Manager of Aussino Wines (East China), (Specialist – importer)
How can Australian wineries benefit from the Program?
Through the Specialist Program, Wine Australia has maintained close relationships with the Chinese wine trade. We act as a bridge between wineries and our specialists; leveraging our resources to support market activities for the benefit of all.
For instance, if a winery is new to the Chinese market we may recommend some of our specialists as potential partners in China. If a winery has already got an existing partner who hasn’t joined our program, they can suggest that they join us so we can further grow the relationship.
An example of this is our close relationship with Amazon China. We carry out joint promotions together via their e-commerce platform where 70 Australian brands from 21 regions are sold, including large and small brands. These promotions have helped drive interest in Australian wine among its consumers.
‘We work very closely with Wine Australia, bringing quite a lot of premium Australian wine brands into the market. Among all the imported wines on our platform, the increase of Amazon’s direct import sales of Australian wine is the biggest.’
Joanna Zheng, Senior Director of Amazon China (Specialist - retailer)
Furthermore, our specialists come from various regions across China. They cover not just first-tier cities like Beijing and Shanghai, but also cover key second and third-tier cities. If a winery would like to explore the regional markets, we can introduce them to Australian wine specialists based there.
Wine Australia China Awards 2017
This year, Wine Australia China Awards will be held in Shanghai on 23 October. We will not only be announcing the best performing specialists, but we will also be showcasing wineries and regions at the Australian Wine Fair (including Australian food and wine tastings and several masterclasses). We look forward to continuing to work closely with both our trade specialists in China and wineries and regions from Australia.
China Awards is a great opportunity for Australian wineries to get to better understand the China market. Winery representatives coming to China to showcase their wines will meet key wine figures in China market and talk to China trade and media at the Awards.
Ten Australian regions are showcasing their wines at the Australian Wine Fair and four master classes will be delivered by influential spokesperson including James Halliday, Fongyee Walker MW, Lu Yang MS, James March, etc. Topics of the master classes include Halliday’s award-winning wines, pairing Chinese food with Australian wines, Australia’s oldest wine regions, and Barossa old-vine wines.
While the China market is not without challenges and complexity, there are clear opportunities for Australian wineries now and into the future. To capitalise on the market opportunities in China, Wine Australia have a program of activities including those that help raise the profile of Australian wine and wineries in China. Working together the wine community can take advantage of the opportunities in China, with the goal of making Australia the pre-eminent premium wine producer in the market.