Argentina’s Wine Market in China

Dec 31, 2014 No Comments by

Over the last years the consumption of wine in China has increased. In fact, consumption of wine has doubled within the last five years and that’s why it is expected that China will become the largest consumer of wine in the world by 2016.

In 2013, China has become the sixth most important wine market for Argentina, accounting for 3% of bottled wine exports.

Ten years ago only 12 Argentina wineries exported their wines to China, while in 2013 this number rose up to 127. Related to the number of brands, in 2003, there were 27 Argentine labels in the Asian giant, but a decade later the number of labels grew to 525.

Some years ago, Argentine wines were intended mostly for domestic consumption. However, it was not until 2000 that Argentine wines started to have presence in the world market.

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Over the last years, Argentine wines have increased their presence in the Chinese market, and they have focused their business mainly in the mid-range wine market due to the growing number of middle-class wine drinkers seeking something new and different than French wines.

This emerging trend has been the expected chance by Argentine winemakers to expand their business across China.

The Asian giant plays an important role in the expansion of Argentina’s wineries, because China accounts for almost 90% of the Asian consumption and around 10% of the worldwide consumption.

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The low price of Argentine wineries compared to others winemakers countries is attractive among younger middle-class drinkers. Increasingly more, Argentinian wine are considered in China as a good wine at a good price.

The success of Argentine wines in China lies in their two major advantages

  • Lower price compared to French wines
  • The ability of Argentina’s grape varieties to suit the Chinese palates because of their supple structure.

In China, the awareness of Argentina as a winemaker country remains notably low. Nonetheless, during 2013 the wine exports to China grew around 28% in value an 18% in volume, accounting $21 million in terms of turnover.

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To the contrary, overall wine imports by China fell by 4.1% in value and 4.4% in volume in 2013. That means that despite of the changes in the Chinese wine market, Argentine wines are prospering.

During the last year, Argentina exported 472,000 nine-liter cases of wine to China. Despite the small number of exports to China, the Asian giant is considered as a potential and largely untapped market for wines made in Argentina.

 

How to promote Argentina wines in China?

Argentine wines have been promoted in the Chinese market through several methods such as fairs, specific events and by opening an office in Beijing. However, they have going far beyond of these ordinary techniques and Wines of Argentine together with Ease Scent (the most important platform of Chinese wine industry training ) have founded the first Argentinian Wine School  and online marketing promotions department.

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The “Argentina Wine School” was opened in 2013 with three main purposes

  • Increasing the understanding of the ‘Vino Argentino’ brand among Chinese wine shoppers,
  • Allowing Chinese customers to understand Argentine wine and its regions,
  • Enhancing the interaction with Chinese wine consumers and improve the reputation of the Argentine wines in China.

What are the most successful Argentina wines in China?

The popularity of Argentine wineries in China is growing. The increasing interest for mid-level wines by Chinese consumers has boosted the sales of Argentine wines. Last year, the sales of Portillo, a brand of Argentine winery Salentain have increased more than 200% while the sales of the brand Salentein Reserva have grown around 35%.

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According to wine experts, Malbec is the most demanded and renowned grape variety in China due to its versatility to pair with a huge variety of dishes. Malbec has a fruitier flavor and has become the flagship grape for Argentina. Since 2009, in China the value of Malbec has increased 436 percent and the volume has grown 311 percent.

As example of Malbec’s popularity in 2002, Argentina exported 10% of Cabernet Sauvignon and 17% of Malbec; while in 2013 Argentine exported 38% of Malbec and 10% of Cabernet Sauvignon.

Why Argentina wines need digital strategies in China?

In order to have online presence in China is essential develop and online marketing strategy. The first step is has presence on Baidu, the largest search engine in China. This is very important because Baidu is the pillar to build the company’s e-reputation. A company without e-reputation has no visibility for consumers and therefore they will not be able to find the products offered by the company. In addition, without e-reputation is very difficult that consumers know the brand and the products.

An easier way to penetrate the Chinese market is via e-commerce sites. E-commerce platforms allow wineries to extend their business across China and reach a huge number of audience. In addition, Chinese shoppers are more willing to purchase products online and the wine is not an exception.

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Argentine wines can open their own e-commerce site or open an store in Chinese e-commerce platforms such as Taobao. The most popular Argentine wines on Taobao are Carlos Gardel, Santa Julia, Altosur and La PequeñaVasija and their variety grape is Malbec. However, Las Lanzas, a wine made with Cabernet Sauvignon is also one of the most popular Argentine wines on Taobao.

Another important tool is to create accounts on social networks. Chinese consumers are looking for information about the product and the brand through internet and especially via social media platforms before make their purchase decisions. Chinese users trust more in opinions and comments that they find on social networks that in information which provide official accounts and advertising. That’s why, wine wineries must focus their efforts to interact and communicate with consumers through social platforms.

Sources:

Chinese Wine Industry, Uncategorized, Wine Distribution in China, Wine Marketing in China

About the author

Olivier VEROT, is a Marketing expert for the Chinese Market. He will speak about the Internet trends about wine and about the Marketing best practices.
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