In the mind of many outside of the market, Chinese wine consumers fit a certain stereotype: the drinker is a 40-something man, career-driven, lives in a big city, and commands a decent salary – and it’s true that the growth of grape wine imports was previously driven by this demographic. But does this provide us with a genuine insight into the Chinese market’s huge sales opportunities? While this “traditional consumer” was responsible for bringing the market closer towards the consumption-driven economy that the government in China has pursued for quite some time now, wine & spirits growth in this demographic is actually in decline.
So if older men are drinking less foreign wine in China, who is responsible for the ongoing growth? It’s quite simple: young, digital-native consumers.
True sales insight occurs when you look below the surface
If you spend any amount of time living in China, it soon becomes clear that online consumption is king. WeChat, the most popular mobile app in China has over 1 billion monthly active users (MAU) the majority of which taking advantage of WeChat’s shopping marketplace, and as of March last year, there were reportedly 710 million online wine buyers across platforms which accounts for 30% of the market!1 This shouldn’t really come as a surprise, as China has a rich network of home-grown social media platforms carefully crafted to suit the needs of the highly-educated, young working Chinese. Be it quick-fire sales via livestreaming events, or niche products, from bulk-buy discounting, to limited once-in-a-lifetime purchases: the eCommerce market in China has something for everyone, and wine is no exception.
But can this trend hold out? Put simply, it’s difficult to see it happening in any other way. Young consumers in China are looking for more than just something new, they are looking for experiences: something that they can remember! As the traditional channels in China catch onto the fact that wine on it’s own is not enough (principally due to the fact that many of the products are available online), elaborate and stylish environments will continue to pop-up in large and small cities alike. But of course this will only further fuel an interest in wine amongst the younger generation, and no matter how many fancy bars open down-town, the digital-natives will still look to eCommerce spaces to find that next-best-bottle. Here at AZYA, that feels like genuine sales insight!
What is interesting of course is how the pandemic has effected wine and spirits consumption in western markets, with resistence to online sales channels falling away as consumers have demanded immediate access to good wine, and suppliers being forced to accommodate. Why is that interesting? Because the Chinese market is way ahead of this curve, and could help show the wider market how to manage this shift. Certainly it’s worth keeping an eye on things!