China report reveals consumer attitudes and trends

Australian wineries need to keep working to increase their visibility in China, focus on everyday luxury consumption and build on the elements that make us distinctive. Those are the three key messages from a comprehensive study of Chinese wine consumers.

The research team of Dr Armando Corsi, Dr Justin Cohen and Prof Larry Lockshin, from the Ehrenberg-Bass Institute for Marketing Science at the University of South Australia, gathered and analysed information about wine preferences, purchases and usage occasions in a range of first- and second-tier Chinese cities twice a year for three years through Wine Australia’s China Wine Barometer project.

Waves one, three and five focused on country-of-origin perceptions and the on-premise channel, while waves two, four and six looked at bricks-and-mortar retail, direct-sales from distributors and e-commerce. The reports for wave five and six also summarise the evolution of the wine market in China by extrapolating trends and illustrating patterns of behaviour among regular imported wine drinkers.

‘Over three years, we have seen increases in informal wine drinking occasions and decreases in formal drinking occasions. This is likely to continue with more consumers entering the market at younger ages’, the final report says. ‘Wine consumption will continue to increase in homes; this means growing purchases in retail stores relative to on-premise, though both will increase as more people drink wine.

‘Related to the trend toward informal and at-home consumption are the patterns of retail purchasing. Large format stores (hypermarkets, supermarkets) and specialty stores are growing and will continue to grow in importance. The same trend is evident online.’

The final wave of the project revealed a declining awareness of country-of-origin across all countries as more exporters try to be a part of the market and the competition to attract consumers becomes more complex.

‘Declining repeat buying for leading countries, regions and varieties suggests consumers are trying more wine styles’, the report says. ‘This is an artefact of increased availability of wine styles across retail channels and rationalised ranges.’

The report suggests that marketing and communications strategies need to recognise that Chinese consumers have clearer perceptions about countries and regions than about specific brands and that current activity directed at heavy buyers does not seem to be having an impact. Light and potential buyers are better targets.

The report also notes that Australia is considered on par with Old World producers such as France and Italy in terms of quality and there is great potential in helping consumers think of Australian wines as their wines-of-choice for an everyday luxury consumption or as an accompaniment to a meal. Prestige wines are important, but not the only solution for growth in China.

‘In the last three years, the average price Chinese consumers are willing to spend both off-premise and on-premise increased’, it says. ‘At the same time, informal meals and night outs are growing in popularity, together with awareness of white grape varieties.

‘Every time a Chinese consumer thinks to buy a wine between A$40 and $50 for an informal meal, or casual night out, Australian wines should be the first option he/she should think about.’

The reports from each wave and the final report of the China Wine Barometer project can be accessed on the Wine Australia website.