China is the fastest growing market for wine consumption in the world but the market size is still limited. The per capita consumption of wine is 0.7 liters in the urban sector which is far less than the world average of 6 liters per capita. The consumption of wine only accounts for 1.5% of the total annual consumption of alcoholic beverage in China. Therefore the potential for wine consumption in China is huge.
China’s wine production areas are mainly concentrated in northern provinces of Shandong and Hebei which account for more than half of the country’s total wine output. There are over 200 wineries producing 90% of the national wine production.
The rise of wine consumption has resulted in rapidly expansion of the vineyards both in terms of number and scale. However the varieties of the grapes for wine production being grown in China are limited, particularly for white wine, sparking wine and sherry wine.
The drinking culture in China is quiet different from it in western countries. Drinking in China is closely related to building relationship between people. Normally the Chinese strong liquor is preferred to represent drinkers’ honesty, pride and power.
However increasingly red wines are preferred by professionals as a fashionable and elegant beverage. Despite that, it is still a long way for the Chinese consumers to fully appreciate the quality and test of wine.
In the past, the wine in China was dominated by sweet wine with low contents of grape juice. Nowadays the dry and semi-dry red wine has accounted for 50-60% of the wine production in China. In recent years there are increasingly Chinese wines are being award with international prizes indicating the overall improvement of the Chinese wine industry.
The Chinese importation of wine by value 2012-2018
In thousand of US dollar
The Chinese importation of wine by volume
In thousand liter
Data from Hua-Jing Industrial Research Institute China
Currently to forge a business model combining production- whole sale-retail has become a trend for the development of wine industry in China.
The potential of the Chinese wine industry has stimulated influx of capital from within and outside of the industry. Acquisition of winery in regions famous for wine production in western countries becomes a trend. It is reported that more than 100 wineries in Bordeaux, France has been acquired by the Chinese.