Sheri Hebbeln
December 19, 2013 | Wine Industry Trends | Sheri Hebbeln

China is a quickly emerging wine market

Wineries may soon have an unexpected direct-to-consumer market: China. Wine consumption in the country is set to skyrocket, and many of the bottles people are buying are imports. It's a huge chance for you to increase online wine sales.

Business Insider cited data from a Morgan Stanley report that found overall global wine production is down, but this is hardly bad news for the market. Some key facts from the results on China included the following:

  • Wine drinking in China has doubled in the past five years
  • Chinese wine production has increased by four times in the last decade in an attempt to fulfill demand
  • By 2016, total Chinese consumption will double again to 400 million unit cases, which is too much for the country to support on its own. While China would establish itself as the largest wine-consuming country, it would need to rely on a higher number of imports.

And this would give California wineries the prime opportunity to reach an entirely new market. As China's economy continues to develop, people are becoming wealthier overall, and it follows that they have started to drink more wine. By 2016, Chinese incomes are expected to shoot up even further, opening the door for higher levels of wine consumption.

Demand for wine is predicted to increase faster than Chinese production can keep up. In the next few years, more imports will flow into the country, including many from the U.S. You don't want to miss cashing in on this new trend. 

How to step up marketing, e-commerce and fulfillment to take advantage of this new trend
Despite what you may think, you can't just produce a great wine and hope it will sell itself, according to Financial Times. This is an outdated attitude in the wine industry, and wine marketing can't be neglected for the winery to move into new regions.

Plus, the market is more competitive than ever. Three decades ago, 40 countries produced all the wine in the world and now more than 80 are contributing, the source said. Similar to where the demand is originating, developing economies are responsible for higher levels of grape growing. As consumers in emerging markets gain more capital, wine consumption is seen as a status symbol.

Are you looking to move into international markets? There are a few considerations before making the jump.

Marketing efforts
Your wine won't sell itself overseas, especially with the rapidly expanding number of producing countries and brands. It's going to be more important than ever to stand out, especially online because the Internet will likely be the origin of the majority of your DTC sales from other markets.

This may be a good time to assess your current marketing strategies. Bear in mind that international marketing is an entirely different game and some brand messages could be lost in translation.

Fulfillment and international shipping
While expanding your e-commerce operation into new regions can be a lucrative opportunity, it's obviously going to add logistical complications to your business. It takes much longer to ship cases to China, and this means you need to ensure proper wine storage through the journey, which could increase overhead costs. Although you may not be able to completely control every aspect of the shipping process, you can take charge of how quickly international orders are filled and sent.

Back office processes
International sales require tightly managed winery accounting and a streamlined e-commerce platform. E-commerce solutions need to be able to process different currencies seamlessly. The easier it is for international customers to make an online purchase, the more likely your winery is to succeed in this approach. 



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