Chinese wine culture goes mainstream
Beijing’s austerity measures have unexpected effects on sales of lower-priced wines
The death knell for expensive wine gifts is clanging loudly and clearly during Beijing’s age of austerity. But China’s wine market is riding a wave of positive (although perhaps unintended) consequences. Gone are the days of seeking guanxi (business connections) with a bottle of Hennessy XO. Wine culture has gone mainstream and a new generation of Chinese drinkers are enjoying more wine with greater frequency.
Wine drinking is shifting focus from the tables of upscale restaurants to the comfort of people’s homes. Restaurants are still the most popular place to enjoy a bottle, but home drinkers make up a growing proportion of China’s wine market. These tipplers relax with a 250 yuan (HK$300) bottle a couple of nights a week, splashing out a few times a year on something more expensive. These – China’s first real wine consumers – will gradually, but comprehensively, fill the gifting gap.
Gift bans have hit hard for luxury brands and upscale restaurants. Sales of Hennessy XO, which was formerly a valued currency for businessmen and government officials, are down about 20 per cent in China – a market that was once its bastion of power. Instead of seeing red over the negative impacts of China’s graft clampdown, savvy suppliers and winemakers are excited about the future.
Aaron Lau, president and CEO of Cheil Greater China, speculates that the gift bans offer a chance for Chinese wine drinkers to discover authentic wine brands – wines that are produced for consumption. Certainly China’s parvenus will still seek brand names, but not the conspicuous logos of before. “Chinese people are starting to look for authenticity in the products they buy,” says Lau.
Chan agrees, saying with no hint of sympathy that she predicts a scaling back of the pretenders, as winemakers and suppliers who are just in the business to make a buck move on to the next moneymaking scheme. The real players will stay, meaning better quality wines in the market.
Authenticity may be in fashion, but in China extravagance is never far away. Lau’s research shows that young, affluent professionals are spending more money than ever on carpe diem lifestyles. Retail sales in China are strong (up 10.5 per cent) compared with the overall economy (6.5 per cent). “Some young people say they have so much money to spend that every day feels like Lunar New Year,” Lau declares. “They splurge like there’s no tomorrow, fearing the floodgates could close at any time without warning.” Other young professionals spend money they don’t have, borrowing from friends in anticipation of their “13th month” bonus. For this group, wine drinking is part of an international lifestyle they’re keen to experience.
So, what – or who – is influencing purchasing decisions in China’s brave new world of normal market behaviour? Habitually, Chinese drinkers will reach for a familiar bottle from Bordeaux, made of cabernet sauvignon. But the digital world’s reach is deep and immediate and it is reshaping China’s consumer landscape. “Turn on, tune in, WeChat” is the mantra of 600 million per month. Chan recently conducted a WeChat Live lecture to an audience of 500 from the comfort of her balcony. Masterminded by a group of university students, Chan responded to texted questions by voice message. Examples like this demonstrate the power and potential of China’s digital revolution for wine education and sales.
But not all Chinese drinkers want to listen to experts. “Most don’t trust sommeliers, wait staff or salespeople,” says Dr Justin Cohen, research fellow at the University of South Australia’s Ehrenberg-Bass Institute for Marketing Science. They trust their own taste and stick to what they know. They rely on opinions from friends, build digital communities to share experiences and seek out aspirational brands. They follow bloggers, vloggers and celebrities they can relate to or admire. China’s rising wine culture is raw, uncut and uncensored.
Debra Meiburg is a Hong Kong-based Master of Wine
