China Market

China's market

The challenge of China market entry has become an increasingly important one of Western companies of all shapes and sizes. Despite a difficult economic climate in Europe and the United States, China's economy has continued to grow by double-digit rates over the last couple of years.

Within China, rapidly changing demographics, rising incomes, increased consumer spending and an increasingly open business environment have all helped to make the Chinese market increasingly attractive to Western businesses across a variety of industries.

With a population that exceeds 1.3 billion people and a land mass larger than the United States, China's sheer size and scale presents challenges uniquely distinct from any other market (including other Asian markets such as Japan and South Korea).

China's Wine Market

Wine is especially popular in the large cities of China (Beijing, Shanghai and Guangzhou) and has great potential given the increasing disposable income of local people, the health benefits of drinking wine and the government campaign against grain-based alcoholic drinks.

French companies are active in setting up joint venture either growing grapes and manufacturing wine or bottling bulk-imported wine. To successfully sell wine in China, local bottling of bulk-imported wine is considered the most economical and practical way to supply the local market with a competitively priced product.

Industry analysis

The wine market in China has been gradually expanding over recent years representing today an emerging market with a great potential. Although the wine industry in China is much smaller than the beer and (spirits) liquor

sectors, and even slightly smaller than the rice wine segment, it maintained double-digit growth from 2005 – 2010. It should grow faster than any other alcoholic beverage sector in the coming five years.

An impressive Growth

While traditional wine consumption markets in the West are all declining amid the recent global economic woes, wine sales in China have been experiencing an impressive 15 percent annual increase over the past several years. Furthermore, a report issued in September by U.K.-based International Wine and Spirit Research says that wine consumption reached 125 million 12-bottle cases in 2010 and is forecast to double to 250 million cases by 2016.

Between 2010 and 2014, the VINEXPO study expects Chinese wine consumption to grow by a further 19.6%, reaching 127 million 9-litre cases by the end of the period. At that point, China will be the 6th largest wine consuming country in the world.

China imported 286 million liters of wine at a total value of USD 798 million in 2010, an increase of 67% and 81% respectively from