Rabobank Quarterly Q3 2019 Report
Report summary - China’s Wine Market Undergoing Phase of Adjustment
Current Trends in Chinese Wine Consumption
Over the past decade, the Chinese wine market has been the fastest-growing market in the world, undergoing changes at a breakneck pace. Chinese consumers are becoming more knowledgeable about wine (and changing consumption habits), competitive positioning of imports is changing, domestic players are adjusting their strategies, and the retail environment is evolving faster in China than anywhere else in the world. For wine marketers, China offers an enormous opportunity, but requires a dedicated focus in order to understand the ongoing changes...
Imports Have Been a Key Growth Driver…
Imported wine has been the biggest winner in the Chinese wine market – surging nearly fourfold in a decade – as it benefits from a high-quality, premium image in the mind of the Chinese consumer...
… but They Are Now Turning Negative
Although imports have been an important driver of growth in the Chinese market, 2018 saw the first decline in imported wine volume since 2014 (see Figure 3). Overly optimistic expectations and aggressive investments in the wine market have resulted in oversupply and overstocked products, and the market is working to draw down existing inventories. This – in addition to several other factors, including a slowdown in economic growth, notable price increases of French wines, fading consumer confidence, the weakening of the renminbi, and uncertainty in US-China trade – have led to an overall decline in imported wine...
Who Is Losing in Imported Wines?
Although Chinese wine imports have been softening over the past year, not all suppliers have been affected uniformly. For different reasons, France and the US have seen the biggest declines in the Chinese market...
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