Welcome to AZYA Insights—our take on the latest trends in the Chinese wine & spirits market and digital consumer culture in China.
In this article, we will be exploring the perception of wine labels by Chinese digital millennials, the importance of provenance for young Chinese consumers, and how the notion of a ‘typical’ Chinese buyer is being re-written by communities across China’s digital landscape.
Many myths have been written about what Chinese wine consumers allegedly like to see on their labels.
Red or white.
Still or sparkling.
Bordeaux or Burgundy.
Even more has been said about the label—how many (terrible!) wine labels have been created specifically for the Chinese market?
As AZYA is a technology company first, and a wine merchant second, we firmly believe in data.
We are here to debunk the myths which no longer hold for the new growth-segment: affluent millennial consumers.
Who are these affluent millennial consumers?
We do hope that the wine industry as a whole realises that millennials (currently between the ages of 26 and 41) are now the largest consumer of wine.
This is a crucial point, especially when it comes to the wine market in China. All the conversations we have with wine producers start with a slight adaptation of the following:
Chinese people like French red wine, we don’t do that
And, the same can be said about the label.
Chinese people like a traditional French château label
That was true, when the bulk of wines were sold for gifting purposes. However, things have started to shift since President Xi Jinping’s Anti-Corruption Campaign in 2012. Now, as gifting is largely discouraged, and largely outlawed for public servants, the Chinese wine consumer has significantly changed.
AZYA is an independent wine haven, using the power of eCommerce to reach to these new consumers.
If we could describe them, they would be …
… more likely to live in tier-1 or new tier-1 cities (Guangzhou, Shenzhen, Shanghai, Beijing and Hangzhou). Nearly 30% of AZYA e-store visits originated from the Pearl River Delta cities, more than double that of anywhere else. Over half of our shoppers live on a coastline—where they enjoy a fish-based diet. 10% come from Sichuan province and Chongqing, famous for their hot spicy food. These customers shop after mealtimes, especially on Thursdays and Fridays.
Compared to typical shoppers, AZYA customers make more money, they are well educated and over 40% have either studied abroad or speak English.
The taste and the way millennials shop are a world apart from the previous generation of wine consumers. From our data-driven segmentation analysis, we have found that 95% of young Chinese wine consumers prefer elegant contemporary labels.
First, what doesn’t work?
To understand what elegant contemporary means, perhaps it’s easier to look at what it doesn’t mean.
AZYA offers a curated selection of wine—we believe that a careful selection of each and every label is a crucial offering for our customers and followers. We meet with the wine producers and we go through a rigorous selection process (more about it) to satisfy our requirements for quality, provenance, as well as pairing with local food.
Chinese wine consumers look for the top three searched for attributes: wine origin, grape variety, and food and wine pairing.
Label plays a big role in our careful considerations.
Does it stand out?
Is it clean?
Is it elegant?
Is it modern?
Does it convey provenance?
Does it look genuine?
The two above bottles are from the Domaine de Belle Feuilles in the Côtes du Rhône. Quality of the wine itself and the provenance aside, we want to use them as a case study, focussing on the label itself.
While the bottle on the left is a special edition (with a higher price to match)—both bottles are AOP Côtes du Rhône.
Both bottles have a label that is beautiful, traditional, yet modern.
Indeed, both of them passed our buyer’s test—but there is no better test than the customer.
The label on the right has proven less successful among our customers. That is not to say that the quality is inferior (we had a good repurchase rate). However, campaigns with influencers have significantly underperformed other labels.
- No distinctive feature to remember the wine by; and
- Colours and style make the wine a “generic French red”—which means the competition is that much more fierce in the buyer’s eye.
So what are the most memorable features?
We all love cute animals.
It’s easy to remember them and it’s easy to ask about them. So many customers asked us about our customers for the “horse” or the “ladybug” wine.
Take a look at these two brands. They couldn’t be more different from each other. The target customer is different. And yet, because of their common animal feature, both of them have been incredibly successful among first-time buyers.
(Also note that both of them have a white background. More on that to follow.)
Gensac‘s brand is minimalistic, elegant, modern, and it stands out. The stylistic line is consistent across all its products (including Armagnac).
The second one, Barale, one could argue, has a completely opposite design to Gensac’s. But the label stands out and says a lot—regardless of your personal preference, it sparks a conversation.
Second—what’s your number?
Chinese numerology is notoriously important. Here’s the full list of the meaning behind the most important numbers.
Numbers have a meaning—famously 8 is a lucky number to mean wealth & prosperity. Many wine brands, trying to capitalising on the number 8, have fabricated stories and labels about their connection to that—the winery dating back to 1888, etc etc…
However, most customers aren’t dim-witted. On the contrary, they can see through the ruse and such labels are more likely to be assumed as OEM or, worse, fake wine.
Nonetheless, numbers do stand out in a label written in a foreign lanuage (i.e. Italian or French) to a Chinese audience. And that’s one reason our aforementioned Côtes du Rhône “1418” label stands out more than its counterpart.
One sweet and one extra-brut, while they may not share levels of residual sugar, what they do have in common is an elegant, minimalistic design. Golden details make the products precious, and they position themselves as an affordable luxury item.
And our clients are big fans.
Another favourite? Our semi-sweet blue-bottle Riesling. In the AZYA e-shop we have A/B tested two similar products: our blue-bottle Riesling and another of similar quality and provenance, with the same label characteristics as the Côtes du Rhône mentioned above (elegant, yet plain).
As expected, the blue bottle Riesling continuously outperforms its counterpart, just through mere presentation.
The AZYA Insight: Ignore all rules.
David Ogilvy, a firm believer in research-led marketing, once wrote “advertisers who ignore research are as dangerous as generals who ignore the signs of the enemy.”
AZYA is a digital company by birth. Data, not myths, drives our decision-making.
Take for example labels with a white background. The number 1 rule? In China white signifies death. No white wine labels allowed in China.
However, while the symbolism behind white labels might be correct, we have seen that wine labels with a white background aren’t discriminated against.
It depends on the occasion. During shopping festivals such as Single’s Day, consumers generally shops for themselves, while in December or January or Valentine’s Day, we notice a surge in gifting.
If a wine is purchased for gifting, it’s unlikely that customers will choose a white background label. However, the rest of the time (read: most of the time), wine is purchased to be opened at home or with friends and therefore the white label rule is irrelevant.
What is key is to understand HOW the customer buys. The first time they see a label, they need to remember it from 100s of others. That way, the second time round, they will return thanks to what is inside the bottle, but the first time, they need to be convinced by the outside. What’s on the outside needs to reflect what’s inside.
First impressions matter. We buy with our eyes first!
AZYA is a cross-cultural wine merchant, closing the gap between wine brands and people in and out of China. We help global companies and organisations interpret and adapt to a changing world. Our Services support leading brands in the FMCG sector.