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Friday, March 22, 2013

New-to-China wines struggle to make themselves known to domestic consumers

By Jiang Yuxia

22.03.2013. The wine consumption market in China continues to show its strong potential for growth after it became the world's fifth largest wine consumer in 2011. While France remains China's primary supplier of imported wines, followed by Australia, according to the London-based International Wine and Spirits Research Company, wines that are new to China have also been making a splash in the market over the past few years.

The late-comers to the scene include wines from Georgia, Austria, Greece, Moldova and India. While wine consumption among Chinese is mostly driven by big brands with a focus on price, wine importers and distributors hope to see the newer labels make a name for themselves here.

Georgia is one of the world's oldest wine producing regions. Officially introduced to China with the Embassy's blessing in March 2011, Georgian wines, from the country in the Caucasus region of Europe, now have about 20 brands available on the Chinese market, and can be found in wine retailers such as the high-end club of Ontime in Beijing's Friendship Hotel in Haidian district and the Charming Wines Company in Chaoyang district, which will hold weekly Eastern European wine tastings in Sanlitun starting in May.

"About 90 percent of Georgian wines used to be exported to Russia. It was only after 2006, when Russia imposed a trading ban on Georgia, that the country began to seek bigger overseas markets," said Huang Yutong, vice president of the China National Research Institute of Food and Fermentation Industries, also founder of the Georgia Wine (China) Promotion Center in Chaoyang district. Therefore, people outside of the region are just now getting to know more about Georgian wine, he added.

Compared with French wine, Huang said, Georgian wine is "stronger in taste and rich in tannin, and has a profound fruity aroma. For white wines, it is clear and bright in color." In addition, some wineries in Georgia still use the traditional way of making wine in earthenware called qvevri, giving the wine more fragrance than wine made with modern techniques.

Priced between 100 yuan ($16) to 2,000 yuan, it's a bit more expensive than low-end wines but still cheaper than high-end ones, said Huang.

The biggest problem facing these newly imported brands is that they are lesser known to Chinese consumers and there are not enough distributors willing to or capable of offering wine education about them to potential consumers, Huang noted.

Currently, the die-hard promoters of Georgian wines are typically either those who speak Russian and have already taken a liking to the wines before they were officially introduced to China or general wine enthusiasts who know the reputation the wines enjoy in the region, said Huang.

"People buy wine according to their own tastes and preferences. But they often go for those with higher recognition on the market, such as French or Chilean wine," said Kong Qinqin, a sales consultant with the Tianshuiyuan store of wine distributor Along Wine and Spirits Company in Chaoyang district. Two wines from Moldova at the store are known by some of Along's frequent consumers, but are far less popular than other wines, Kong said. Only those who are enthusiastic about these more obscure brands will eagerly seek them out, she said.

Yang Hao, with the marketing office of the Wine Republic, a wine importer and distributer in Chaoyang district, agrees. As most of the new wines from less-recognized wine countries are mostly sold to hotels and restaurants, it's a bit difficult to find the wines in stores or supermarkets, said Yang. His company predominantly distributes from Australia, New Zealand, France and Italy. Austrian wines are the only new import they offer.

Wines from India were introduced to China in January this year, but for now can only be found in hotels and restaurants. For these new wines to succeed, industry insiders say China needs a healthy wine consumption market paired with increased wine education.

Despite being the fifth highest consumer of wine worldwide, however, China has wine consumption habits very different from those in Western countries, Huang noted.

"Wine drinking is a way of relaxation in the West, and 80 percent of the wine is consumed as a part of daily life. But in China, the majority of wine is consumed as gifts, or on social occasions or at business banquets," he said.

For Chinese consumers, the culture behind wines is a good selling point.

"Chinese are not used to selecting wine based on regions and names. They think it is too scientific," said Huang, adding the center is doing more to introduce Georgian culture to potential buyers.

Huang is optimistic for the new wines. China's wine consumption market is becoming more driven by daily consumption as more young people born in the 1980s and 1990s become players in the market.

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