Wine ‘made in China’ has gained increased attention around world in recent years. Splitting my time as I do between Europe and China, I have the opportunity to assess the health and potential of the Chinese market with a good degree of objectivity. There are five things I would like to stress:
Firstly, domestic wine transaction has changed. In the past it was skewed by governmental purchase and the ‘gifting’ market. But it is now going through self-adjustment to concentrate on consumption-driven behaviour. Well-educated younger generations are becoming increasingly important, growing into Key Opinion Leaders (KOLs) or knowledgeable and passionate consumers. However, given the massive country and the fragmented market segmentations, this development is uneven. Sophistication still lies mainly in the coastline cities — especially the culturally paramount metropolitan Shanghai. Wine education, therefore, has never been more critical than it is now.
Secondly, inside the winery the focus is shifting from mass production of purchased grapes to estate-owned plantings. Two factors are driving this: (1) Chinese enologists and winemakers who trained in classic wine regions elsewhere in the world have now returned to their homeland and are ambitiously exploring the market potential and the opportunities for innovation. (2) A small number of winemakers who stayed in China ploughed on with their local domains since the very tough years of the late 1990s. Their forward-looking work in terroir and vineyard management is now respected worldwide.
Thirdly, some flagship wine regions now receive local government support in a variety of ways; the industry is seen as a high priority that stimulates peripheral industries and the local economy. Many different initiatives have been introduced to incentivize owners, including ‘flying winemakers’ (experts brought in from abroad), competitions, and even new classifications similar to ‘Bordeaux growth’.
Fourthly, although the most available Chinese wines on the market currently are still made of Cabernet Gernischt, Cabernet Sauvignon or Merlot grapes, there is a clear trend for growers to experiment with more varieties such as Rhine Riesling, Aglianico, and Pinot Noir. The understanding of different varieties in relation to the local terroir is still at infant stage.
Last but far from least, the Chinese market for imported wine has grown enormously. But it is also fiercely competitive. In my view, European producers have had an over-optimistic view of the market’s potential; in truth they are competing with wines from Chile, Australia, New Zealand, South Africa, and elsewhere which offer excellent value-for-money alternatives.
How to stand out from the crowd with sustainable business growth is the burning question facing everyone seeking long-term success in China, for domain-owners both home and abroad.
Featured image credit: Barrels in De Long winery. Photo courtesy of Young Shi.