Introduction to Wine Strategy for the Chinese Market
for the Chinese Market
Whether for taste, prestige, health, or to share in a new lifestyle, imported wine brands have now made their way to China, and younger Chinese consumers are responding. Felipe Dacaret, DAf Founder and Executive Creative Director, traveled to China to explore this market and how wine brands communicate to Chinese consumers.
In China there is no “one size fits all” for wine branding strategy.
A consumer is born
Our consumer is a relatively young professional, a member of China’s growing middle to upper middle class, living in one of China’s larger cities. Their more rural counterparts—while they may like the taste of wine—haven’t been exposed to a variety of international wine brands. The cause of this? Language and cultural barriers complicate the entry of international brands to regional China, leaving the majority of shelf space to national brands.
Digital by nature and almost permanently online, our consumer views the world through their smartphone and the quadratic pattern of its many QR codes. These codes, personalized for both brands and individuals, provide an electronic portal to a world of multi-platforms and integrated micro sites, where consumers make purchases, transfer money, find entertainment, connect with brands, and talk to each other. Savvy wine brands use QR codes to their advantage. By scanning them, consumers are granted entry into the wine’s online presence; including access to promotions, competitions, videos, and social media feeds.
To survive in the Chinese digital ecosystem, brands must be well-versed in how local consumers behave online (WeChat is irrefutable as a key platform) and adapt their marketing strategy accordingly. Perhaps even more so than in other key markets, in China there is no “one size fits all” for wine branding and brand communication strategy.
Where to drink?
With the intention to drink wine made, the question now is: where? In China wine has always been strongly linked to restaurants, gifts, and business purchases. However, purchases for at-home consumption are currently growing. One of the results? A rise in alternative packaging solutions: To accommodate consumers who wish to drink wine alone or with a friend, there has been growth in mini bottle sizes of 375cc—and even smaller.
What to drink?
What will it be: Old World? New World? From which valley? Our tech-savvy consumers are “up to date” with wine-producing countries, though at the entry level and special reserve price segments, specific origins don’t tend to drive purchase choice. (This, however, can be seen to change in the premium and ultra-premium segments.) When considering Old World and New World wines, our consumer is likely to view them as two separate categories, not going to great lengths to compare them, their label designs, or perceived quality. By the time they make it to the checkout, the wine our consumer selects is likely to be a dry red. (Red wine is preferred to white roughly 4:1, the sparkling wine category is dominated by Champagne as sole ruler and leader and consumers tend to prefer labels that directly say “dry”—even if their personal tastes are skewed towards sweeter wines.)
Where to buy?
Given our consumer’s strong preference for mobile phone technology, the Chinese e-commerce sector is thriving. Of all the options available, TMall, JD.com, Carrefour, Amazon and 1919.com (a specialized online alcoholic beverage retailer) lead. Back on the streets, both off-trade and on-trade purchases remain popular, due in part to on-premise wine events and tastings.
Importantly, unlike their Western counterparts, our Chinese consumer is unlikely to visit the supermarket to purchase international wine: Here, shelf space is mostly dedicated to national wines brands.
In the drinks industry, wine occupies the perfect position to captivate online communities.
What’s attractive in POS?
Wherever their purchase takes place, our consumer will pass by out-of-home displays, billboards and Metro installations in their everyday life. When in-store, it becomes clear that attractive point of sale assets for the Chinese consumer are not all created equal. In fact, rather than elaborate in-store set ups, a wine’s neck hanger is by far the best-performing item. Why? This is where the brand’s QR code is displayed.
What’s attractive on labels?
The wine bottle itself grabs and holds consumer attention through a number of considerations, with color and language topping the list. Chinese culture has long held certain connotations with particular colors: red (passion, good fortune), gold (wealth, wisdom), blue (heaven) and green (hope), and these continue to communicate strongly to consumers from the label. Interestingly, though young and digitally-native, wine’s traditional symbols (landscapes, castles, barrels) still speak to our consumer, whereas they may be seen as stuffy by a young Western consumer base.
Alongside color associations, language is the protagonist. Consumers will be drawn to brand names that express positive connotations, with extra points assigned to Chinese transliterations that simultaneously allude to original brand names. (Penfolds is a known success story, whose Chinese name Ben Fu roughly translates to “Marching towards wealth”.) Looking now to the specifics of the front label, our consumer is more likely to linger over wine labels in English, as the language suggests an imported product, which is seen as a synonym for high quality.
China is a land that continues to hold the traditional and the digital in both hands. When it comes to choosing wine, our young, professional consumer looks to a brand’s online presence (both for brand awareness and to purchase) while simultaneously gravitating towards time-honored colors and symbols on the bottles themselves. It’s a challenging balance to manage. However, with sales predicted to rise to $23 billion by 2023, according to Vinexpo and IWSR’s joint report, it’s one that the market’s current players are thankful to have navigated.
China holds the traditional and the digital in both hands.