Chinese Wine Also Faces 'Localization' Trend... Imports Plummet

The 'localization' trend is also sweeping through the Chinese wine market. Due to the impact of tariffs and other factors, imports have sharply declined, prompting domestic companies in China to expand their market share by promoting 'domestic wine' marketing.

According to local media such as Beijing Jingjirebao on the 23rd, the cumulative production volume of wine companies above the designated scale nationwide last year was 213,700 kl, down 22.12% from the previous year. The cumulative sales revenue was 9.192 billion yuan (approximately 1.7134 trillion KRW), a decrease of 2.91% during the same period.

Imported wines also have no place to stand. Last year, wine imports amounted to 336,000 kl, down 21.1% from the previous year, and import value was 1.439 billion USD (approximately 1.8937 trillion KRW), down 15.2%. In particular, Australian wines, which were hit by a 'tariff bomb' from China, are being pushed out of the market. According to Wine Australia, Australia's mass-market wine exports totaled 21 million AUD (about 19 billion KRW) over one year as of the end of October last year, a 92% decrease in just one year. China imposed anti-dumping tariffs ranging from 116.2% to a maximum of 218.4% on Australian wines in November 2020.

Although the decline in wine production continues this year, the rate of decrease is improving. The National Bureau of Statistics estimated that wine production nationwide in the first quarter (January to March) of this year reached 36,000 kl, down 4.5% from the previous year. In the first quarter of 2022, production volume had sharply dropped by 31.1% compared to the previous year.

Major wine-producing regions are undertaking various projects to overcome sluggish consumption. Ningxia plans to hold a large-scale wine culture tourism exhibition in June. Chinese President Xi Jinping visited the region twice in 2016 and 2020, emphasizing the need to encourage the development of the wine industry. In 2021, the region was designated as a national comprehensive pilot zone for the open development of the wine industry and received government support for infrastructure such as transportation platforms. Popular production areas such as Xinjiang, Shandong, and Shanxi have also established industrial guidance funds and industrial development funds to make strategic investments.

The main target consumers of Chinese wine are people in their 20s and 30s. According to the latest survey by GlobalData, per capita wine consumption among Chinese consumers is expected to increase from $35.6 in 2021 to $60.1 in 2026. In response, Changyu Wine plans to launch new products targeting young consumers in the second half of this year in cooperation with online sales platforms. Changyu emphasized in its annual report, "Young consumers are shifting to wine consumption," and "It is necessary to meet demands in a timely manner."

However, some opinions suggest that restoring consumer trust lost during price competition must come first. Consumer goods marketing expert Xiao Juqing said, "The quality of domestic wine declined during price competition, and trust was lost," emphasizing, "Leading companies should start improving quality to seize the opportunity for a rebound."

This content was produced with the assistance of AI translation services.