China’s wine market is somewhat “depressed”. On March 7, a reporter from Beijing business daily learned from he Jihong, President of China non-staple food circulation association that in 2020, China’s cumulative wine imports will drop by 28.8% year on year. According to the 2020 performance forecast released by wine enterprises, the net profits of Chinese wine enterprises have declined, and some of them have even suffered losses. The analysis shows that wine and wine, Baijiu, beer, sparkling wine and other liquor are in the stage of competition. The former marketing is not in place, which leads to a lack of consumer cognition. Besides, the domestic wine recession also makes the whole industry enter a downturn.
The industry is in the doldrums
Unlike the hot liquor market, China’s wine Baijiu market has been in a downturn in recent years. He Jihong said at the second China International Wine and spirits industry annual meeting that “in 2020, the wine output will be 410000 kiloliters, a year-on-year decrease of 6%; the cumulative import volume will be 470 million liters, a year-on-year decrease of 28.8%; since 2018, China’s wine import volume will continue to decline.”.
Wine market in the production, sales, import volume decline at the same time, enterprise performance is showing a weak trend. According to the 2020 performance forecast released by wine enterprises, Mogao shares is expected to achieve a net profit of about 2 million yuan, a year-on-year decrease of about 25.4 million yuan, a year-on-year decrease of about 92%; ST China and Portugal are expected to achieve a net profit of – 51 million yuan to – 63 million yuan; ST Tongpu is expected to achieve a net profit of about – 50 million yuan to – 70 million yuan; ST Weilong is expected to achieve a net profit of – 230 million yuan to – 270 million yuan; Changyu Wine is expected to achieve a net profit of – 70 million yuan in 2020 The annual net profit is expected to be 468 million yuan to 571 million yuan, a year-on-year decline. For the decline in performance, Beijing Business Daily reporter sent an interview outline to the enterprise, as of press, the enterprise did not reply.
Zhu Danpeng, a China food industry analyst, said that wine and Baijiu, wine, beer and sparkling wine were in the category competition stage. “Zhu Danpeng” From the perspective of the whole category competition, the development of wine market is relatively low. On the one hand, the reduction of foreign wine, but more domestic wine recession, making the whole industry into a downturn.
Peng Hong, President of Guangdong wine industry association, told Beijing Business Daily that the future development prospect of wine market should be broader. At present, there are some problems in wine publicity, promotion and education. Wine should be cultivated and led, not educated and standardized. Last year, Guangdong consumed more than 5 billion yuan of wine, and 116 million people consumed more than 5 billion yuan. There is still a big gap between Guangdong and the world average, which means that there is still a large space for wine development in the future.
Value and price are not equal
As an imported product, wine has not really entered China for a long time. Due to many factors such as the high price and rare quantity of early wine imports, as well as the early publicity setting, wine left a high-grade and valuable impression on many consumers.
A reporter from Beijing business daily searched the Zhihu platform for questions related to wine and noticed that many netizens asked questions such as “why wine is superior” and “why wine has style with Western food”. Some netizens said that wine drinking scenes are mostly in relatively quiet and elegant environments such as cocktail parties and dates, which makes wine feel high-grade.
Consumers in the super wine area, told reporters in Beijing daily news that the family rarely drank wine, usually mainly Baijiu, beer, and little understanding of wine. “In my impression, wine needs to sober up. Different wines may need different temperatures to drink. The drinking process is too complicated, so I don’t drink wine at all.”
Senior people in the wine industry said that since 2018, the import of wine has also declined, which makes the industry have to think about the reasons. When wine first entered China, it could not be sold because there was no perfect channel. The storage time of wine is usually about five years, which leads to the wine near the date being processed by wine merchants at a low price, which has a great impact on the market.
Zhu said the biggest problem with Chinese wine was the error between value and price. With the improvement of consumers’ awareness and professionalism of wine, many low-quality and high price wines have basically returned to the original price band. This is also an important reason for the decline in the overall price of Chinese wine.
Decoupling of consumption cognition and marketing
Domestic wine is declining rapidly after reaching its peak. According to public information, the sales of domestic wine began to decline year by year after reaching the peak in 2016, and the decline rate gradually increased from 2019 to 2020. Specifically, from 2014 to 2016, domestic wine sales were 42.1 billion yuan, 46.3 billion yuan and 48.5 billion yuan, respectively; by 2019, domestic wine sales will drop to 28.9 billion yuan and 14.5 billion yuan in 2020.
Shen Weimin, managing director of Xinjiang tiansai winery Marketing Co., Ltd., told Beijing Business Daily that from the perspective of practitioners, the biggest problem in the current wine market is that there are many wines in the Chinese market that do not meet the market demand standards, which causes consumers to distrust the Chinese wine sector. “There is no shortage of wine in China’s wine market. Consumers need products that are easier to understand.”
In fact, the long-term feeling of wine to consumers is high-end wine, which makes many consumers dare not drink because they do not understand wine. The above effects caused the decline of wine sales. It is worth noting that in 2019, China’s Vineyard planting area is 855000 hectares, second only to Spain’s 966000 hectares, ranking second. However, China’s wine production has been declining since 2015. In 2020, China’s wine production will reach 413000 kiloliters, a year-on-year decrease of 6%. Through the data, it is not difficult to find that the grape planting area in China is basically maintained, but the wine production is declining year by year.
China wine Baijiu and beer are more like wine in western countries, and there is no specific food collocation or drinking scene, consumers can drink in any case, insiders say. And Chinese wine enterprises should cultivate consumers’ consumption concept, let consumers first drink wine, gradually change to understand wine, like wine, and finally become wine lovers.
Zhu danpeng said that although the epidemic caused a sharp drop in foreign wine imports, domestic brands failed to seize the “empty window” opportunity of imported wine. The key of Chinese wine is quality. In the future, Chinese wine should focus on quality, brand, scene, service system and customer stickiness. In the future, the wine industry should improve the planting level, improve grape varieties, integrate the advantages of regional industrial chain, and create a new concept of producing area through the support of government policies. At the same time, large wine enterprises are encouraged to “go out” and acquire foreign high-quality wineries to build a new brand operation mode of Chinese wine.
Beijing Business Daily reporter Zhao Fengrui
[the above content is transferred from “Beijing Business Daily website”, which does not represent the view of this website. If you need to reprint it, please get permission from the website of Beijing business daily. If there is any infringement, please contact to delete it. 】