Australia is a large country which has been blessed with a varied climate and many different soil types. This enables the country to produce many different types of wines including red, white and sparkling wines. Australia also boasts some of the oldest wineries in the world, thanks to the disease that destroyed the great vineyards of Europe in the 1800s.
This unfortunate event prompted top-notch vines to be brought into Australia. Since then, various viticulturists have preserved and developed techniques to produce large amounts of high quality wine. Today, Australia exports to over more than 100 countries, including China.
For several decades, beer and rice alcohol (Baijiu) have been the preferred alcoholic beverages consumed by the Chinese. However, this is a changing landscape, especially among the young and affluent middle class. Statistics show that there was an increase of 43 percent of wine exported to Mainland China, during the 12 months leading up to March 2017, with a large amount of the alcohol delivery coming through Shanghai.
What has caused the Surge?
Improved disposable income
The boom in the economy has changed the spending habits of the Chinese consumer. Today, most middle class Chinese can afford foreign-made goods and services. This is also true for alcoholic beverages, such as wine.
Change in the consumer mindset
Wine was once considered an expensive good and reserved for special occasions. However, the wide availability of wine through online retailers, at restaurants and in stores in most major cities has created a shift in the Chinese consumer. A recent study shows that wine is consumed for health and well-being reasons, as well as relaxation and taste.
Traditionally alcoholic beverages were consumed mainly by men. However, the working women in today’s modern society are equal and financially independent. They have also taken strongly to drinking wine.
Drinking wine is increasingly considered the health-conscious option when compared to the traditional alcoholic beverage Baijiu. Government initiatives to promote healthy drinking among the public is another reason for the health drive. For example, in 2006 the government imposed a minimum age for drinking. Later in 2009, they also increased taxes for high strength alcohol drinks such as Baijiu.
E-commerce and logistics
Online sales of retail goods and services are on the increase in China. For instance, most Chinese use social media sites extensively to search for recommendations and price reductions when purchasing a product or service online. This has prompted a recent government directive to allow alcoholic beverages such as wine to be traded via overseas e-commerce transactions.
This has enabled consumers in tier one cities (such as Shanghai and Beijing) and lower tier cities accessible to quality wine. In addition, there are several reputed Chinese companies who have partnered with Australian wineries to offer storage, delivery and other services to help sell their stocks online to the Chinese consumer – with a particular boom coming in alcohol delivery to Shanghai.
The availability of wine has also prompted a drop in prices, and thus it has become available in most restaurants and bars.
Local produce being inferior
Although Chinese wineries produce their own wine, this is a work in progress. There are several reasons for this. One factor is the inability to produce quality grapes. The regions where the wineries are located tend to get very cold during winter and the farmers are forced to harvest their produce much earlier. Thus, the grape harvest tends to not be sweet enough for the palette of the Chinese consumer.
Why Australian Wine?
The Chinese palette enjoys wines that are fruity, with low acidity levels and minimal tannins. These traits are mainly found in many Australian wines. As a result, the Chinese consumer has begun to enjoy wine on its own, instead of mixing it along with other beverages.
The Red Colour
Dubbed the national colour of China, red signifies luck, power and fortune. This makes an attractive gift, especially during the festive seasons where exchanging of gifts always played an important part in the culture.
Brand (Country) Loyalty
Australian wine has always been viewed as safe and pure. In the wake of recent food scandals involving local brands, the Chinese have a lot of faith in the purity and quality of Australian wine. Family brands and consistency (of quality) are also factors that have helped Australia to secure a decent market share of wine in China.
The use of screwcap instead of the traditional cork
Australia has long ago ditched the traditional cork from their wine bottles and has introduced the screwcap. Out of every 100 bottles of wine manufactured, 99 are sealed with a screwcap.
Wine drinkers in China tend to be young and open-minded, and prepared to try new things. They have readily dismissed the myth that a bottle of wine with a screwcap is inferior in quality, when compared to competitors from other countries.
Australia, being one of the world’s top wine manufacturers, has managed to capture the hearts and minds of the Chinese consumer. Key factors such as disposable income, accessibility, taste and brand loyalty influence the Chinese to prefer Australian wine over other competitors, and has massively boosted the level of alcohol delivery in Shanghai.