China wine market: millennial drinkers are buying online and moving away from established brands, Vinexpo hears
Young wine drinkers in China are strongly influenced by their friends and social media, and have few preconceptions when it comes to the wine market in general, heard visitors at day one of Vinexpo Hong Kong 2018
Almost every seat was taken in one seminar room on the first day of Vinexpo Hong Kong 2018, with an audience of mostly wine producers keen to find out more about the latest trends in the China wine market from a panel of experts.
They heard that consumer patterns and preferences are shifting, with young wine drinkers buying online and moving away from established brands, both domestic and imported.
“Before, [older wine drinkers] saw scale as evidence of success, but wine is agriculturally dictated, depending on how much wine you can get from the land,” explained Sarah Heller, a Hong Kong-based master of wine, at the seminar at the Hong Kong Convention and Exhibition Centre. “The younger generation understand that small boutique wines can be beautiful. You’re already seeing it in fashion brands.”
Heller went on to say that two-thirds of Chinese people who shop online for wine are born after 1980. “When they consume wine information, they want visuals that give them a feeling; that can be conveyed through videos [and] conversations with winemakers.”
As a wine consultant, Heller admitted she sometimes has trouble deciding whether to describe a wine as having raspberry or cranberry notes, but young Chinese consumers are much more interested in words like “mellow” and “smooth”.
Tommy Keeling, head of Asia-Pacific research at the International Wine and Spirits Record (IWSR), said young Chinese consumers are familiar with international trends because they travel abroad.
“They don’t have baggage [preconceptions of wine], so they are more of a blank slate,” he explained. “They see wine as fashionable, more individualistic and it’s something they consume at home or when they are out in a restaurant. When they are spending time online, it’s on their phones and they are always on social media.”
Heller said these consumers are more reliant on their peers’ experiences than blindly following a KOL, or key opinion leader. She gave the example of what happened when Li Bingbing promoted Kieu Hoang Winery in California’s Napa Valley.
“People responded strongly at first, but that only works in the short term. People see through that quickly,” Heller observed.
She added that when celebrities have too many sponsorships, it is hard to tell whether their personal preferences are genuine.
“That’s why people are more interested in wineries their friends have visited and posted pictures on social media, or someone who at least knows something about wine. There is something to be said about micro influencers.”
Alberto Fernandez, managing director of Torres China, pointed out that young people working in China’s wine industry have significantly increased their knowledge of wine in the last few years. Many are studying for qualifications through the WSET (Wine & Spirit Education Trust), or even an MBA in wine, suggesting they have higher expectations in wine quality.
Meanwhile, wine tourism is a new way for young Chinese consumers to discover brands, Fernandez said. “Only in the last 10 years have they been able to get visas to travel abroad. Sometimes through visiting vineyards they find wine brands directly.”
Regarding rosé, although consumption of the drink is growing globally, Heller said it is not gaining much traction in China, where there isn’t much of a culture of drinking chilled drinks. Even beers are not necessarily served chilled, as servers will ask customers if they want beers cold (and even then they are not chilled), or at room temperature.
Keeling agreed, saying 80 per cent of wine consumed in China is red. “Whites and rosés still have challenges. There is a resistance to drinking chilled drinks. I don’t see shares in whites and rosés growing in the next five years in China.”
The panel also talked about high-end domestic brands exporting their wines overseas. But Fernandez said that many brands’ wines are not very different from each other in terms of style, making it difficult to differentiate themselves in the market. He cited Silver Heights from the Ningxia region, run by Emma Gao Yuan who trained in France, as one such brand.
That, as well as the price of exporting the wines abroad, makes Chinese wines less appealing, though they are gathering interest in countries including the UK, Japan, and Canada, Fernandez added.