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Wine imports in China poised for growth spike

By Xu Junqian in Shanghai | China Daily USA | Updated: 2017-04-21 10:46

Industry players cite the preferences of the younger generation and e-commerce as the main drivers of development

China is expected to overtake the US as the world's third-largest wine importer, after Germany and Britain, by 2020, according to a joint report released by Vinexpo and International Wine and Spirit Research.

The robust growth of China's wine import market is likely to account for 72 percent of the growth of global wine imports, added the report.

The CEO of Vinexpo Guillaume Deglise said during a news conference in Shanghai that the research also indicates China's wine market is experiencing positive growth and that it has regained its position among the leaders.

While China's wine market experienced a sharp decline following the anti-corruption campaign introduced by the central government in 2013, Deglise said that the situation now has changed.

"We are no longer talking about gifting or wholesaling for banqueting. It's becoming a real consumer market that's transforming the industry," he said.

While domestic consumption has been gradually picking up, Deglise noted that the key growth engines of the market have been very different from before the anti-corruption kicked in. He said that younger generations, who are more health-conscious even when it comes to drinking alcohol, and new distribution channels, mainly the e-commerce markets, will be the two major growth drivers for China.

During last year's Vinexpo, which was held in Hong Kong, Chris Tung, chief marketing officer of China's e-commerce giant Alibaba, predicted that online sales of wine and spirits in China would triple within three years to reach $12 billion by 2018.

The growth rate for China's wine market is estimated to exceed 40 percent over five years starting 2016. Meanwhile, the market size of still wine would likely hit $21.26 billion by 2020, according to the report by IWSR and Vinexpo.

While sparkling wine accounts for just 1 percent of total consumption, its growth rate of 41 percent is higher than still wine's 19 percent. China was also among the top 10 importers of sparkling wine in 2016.

But unlike traditional consumer markets for sparkling wines or champagne, Deglise pointed out that most Chinese drinkers buy champagne because of its association with celebration rather than for enjoyment.

While France remains the largest wine exporter to China, shipping 22.2 million cases of wine in 2016, Australia is quickly catching up thanks to the free trade agreement reached between the two countries in 2015. The agreement greatly reduces the retail price of Australian import wines in China and is expected to drive the growth rate of imports to 121 percent from 2016 to 2020.

This year's Vinexpo will take place from June 18 to 21 in Bordeaux, France. This is the first time the world's largest wine and spirits exhibition, which was founded in 1981, is expanding its annual fair from three days to four.

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