ProWine buzzes in Shanghai

Despite the proliferation of trade fairs in Asia, ProWine China has established itself as a must-attend event. Felicity Carter attends and reports on what she learned about the Chinese market.

ProWine China 2019
ProWine China 2019

When ProWine opened, there was a crush to get in. It wasn’t just that people were eager to get to the fair, it was also that so many of those queuing were young and enthusiastic, lending a festive atmosphere to the morning.

But that’s China all over. The country is young and optimistic, with a feeling that anything is possible. Several of the older Westerners who attended remarked privately that if they were younger, or had no family obligations, they would move to China without hesitation.

Sometimes it’s hard to remember that this is a fledgling market still developing a taste for wine – and one that wine producers need help to enter.
As exhibitor Vladimer Kublashvili of Georgia’s Winery Khareba said, it’s easy to connect with Chinese importers who are inexperienced, and therefore unreliable. “Sometimes they buy a lot, and sometimes they quit,” he said, adding that he was exhibiting at ProWine because he wanted to find new buyers. “Last year I participated in different wine shows in China and I didn’t find them really helpful. This is for me the most prestigious.” He said that attendance in 2018 had connected him with new customers, including an importer who purchased whole containers of wine.

The Chinese market

The day before ProWine opened, owner Messe Düsseldorf held an information afternoon for the international press to introduce them to the Chinese market. One of the speakers was the renowned Li Demei, associate professor of wine tasting and oenology at Beijing Agriculture College, who outlined the history of wine in China, saying that the first record of wine comes from historian Zhang Qian of the Han Dynasty, writing in 138 BC.

“China has a long winemaking history,” he said, “but grape wine was not spread throughout China. Rice wine production is comparatively easier.” The country has a deep history with alcohol, and “since 2002, China has become the biggest beer producer of the world. There is also the local spirit, baijiu, produced in big quantities.” China now has more than 900 licensed wineries, although not all of them produce wine every year.

Li Demei predicted China will become the second-biggest consumer of wine by value in 2021 and “will overtake the UK next year”. However, habitual wine consumers are mostly those who are working in a wine-related business, including people who are importing on the side. Overall, there are 20m-30m regular wine drinkers, most of whom live in the first-tier cities.

“How does a Chinese consumer choose wine?” he asked . “External factors. They choose wine on the price range, and then the package or region.” Meaning the taste comes last. “Most never consider the taste when they buy wine. In a supermarket, they can’t buy wine on the taste.” He advises anybody who wants to sell wine to give consumers the opportunity to try it, as soon as possible. Also, “don’t talk too much”.

The next speaker, from the boutique Tian Sai winery (boutique in Chinese terms – it produces up to 800,000 bottles a year), gave an insight into how the Chinese market their own wines. Founded ten years ago by investors from other business sectors, the winery uses what it calls “cross-boundary marketing”. “Chardonnay sounds like a girl’s name, so they launched the Goddess of Chardonnay competition,” explained the representative, showing a picture of the winning girl. The event combining fashion and wine has become famous in wine circles.

For the past seven years, Tian Sai has released zodiac themed wines, too, she said, because the Chinese always give gifts before the spring festivals and the symbolism on the labels makes the wine an attractive alternative gift. It also sponsors many different organisations, from the Xinjian women’s basketball team to the 2018 Hong Kong Nobel Laureate dinner. Products designed for specific events and occasions account for 20% of production, she said. “We create special labels for art shows and banquets. That’s how we collaborate with these events – they are very selective about who they collaborate with.”

Finding new channels to connect with consumers is a constant priority. “We established tasting centres in nine cities in China. We participate in various trade exhibitions. We are also listed by Starbucks, the only Chinese wine listed there.”

Altogether, the company spends 10-15% of its budget on marketing and promotion.

Inside the fair

One strength of ProWine is that entry is restricted to those who can prove they are part of the wine industry, which generally keeps out the amateur wine importers. “There are 800 established wine producers and distributors from 35 countries,” said Bastian Mingers, global head wine and spirits and a director of ProWein. “We have, for the first time, participation from Serbia here – they are putting marketing money in China. There are more wine-growing regions attending from France, Italy and Spain and a rising number of Chinese exhibitors.” 

The fair was crowded, with almost all exhibitors reporting plenty of interest from visitors. The packaging stands were also packed as visitors examined the boxes on the shelves, which reinforced how important it is to make sure wine is available in an attractive box, for gifting.

Not everybody was doing great business, however.

The Californian stand was exceptionally quiet, a victim of the trade war between the US and China. The Americans looked doleful as they stood at their counters, waiting for visitors who never arrived. Worse, they were positioned opposite the Australian stand, which was the biggest of the fair and had people lining up to get in.

It’s no secret that the Australians are doing well in China, buoyed by their geographic proximity, a free trade agreement, Chinese investment in Australian wineries, and the heavy lifting done by Penfolds, which has a high level of recognition in China. Australia also takes an inclusive approach, which the Chinese seem to appreciate.

The night before ProWine opened, Wine Australia held its seventh annual China Awards Ceremony and Banquet in the very ritzy Bellagio Shanghai Hotel, accompanied by a lavish dinner. The personable young MC switched seamlessly from English to Chinese, and the night was devoted to handing out awards to Chinese communicators and local wine industry figures for their work in promoting wine. It was like an Oscars ceremony. 

“The Australians put the spotlight on the Chinese,” said an industry observer present at the dinner. “All the Europeans do is talk about themselves and their heritage.” The comment dovetailed with a tip that was going around the fair: that exhibitors should ask visitors if they could take a selfie with them, as it bestows recognition on the visitor. Another was to accept WeChat and Weibo invitations immediately, as the invitations vanish after three days.

Communicating with the consumer

One of the side events of the fair was a seminar on wine media in China. It was relatively short because of one key fact – traditional wine media plays almost no role in the market. There are several reasons for this, chief among them that people get news instantly from social media, well before it has a chance to be picked up by traditional media channels. The government’s control of the media is another factor; it’s against the law to promote one brand over another, making wine recommendations very difficult.

Yang Lu MS, founder of the Grapea Institute, recommended using KOLs or key opinion leaders. While an influencer is someone with more than 100,000 social media followers, it takes someone with more than 500,000 followers to have true traction in the market. Lu also recommended pairing wine with some other subject when on social media. “When I cross over with another industry, my video might attract more than 10m clicks,” he said, adding that when he just concentrates on wine, the attention falls away.

Ian Harris, CEO of the Wine and Spirits Education Trust (WSET), whose stand staff handed out cakes to celebrate the WSET’s 50th anniversary, said that there is enormous interest in learning about wine in China. Their Chinese business is growing at 31%, the fastest of any WSET market, with 22,000 students doing a course in the past 12 months. “In China, it’s a higher proportion of non-trade people that do our courses compared to the global average,” he said. “The Asian community value education and they don’t expect to be given a credential – they know they have to work for it. It will make their family proud of them.” 

He said that it’s crucial to use digital channels to connect with people. “When it comes to learning, people want to learn on the go,” he said. “People run their lives through smart phones.” WSET had therefore learned to keep things “short and snappy” with a 15-second maximum for videos. Harris added he sometimes found it hard to believe how hard the Chinese students work “when they have full time jobs, and some don’t get funded”. 

The enthusiasm for wine is clear in one of the world’s most exciting, optimistic countries. However, nobody should forget the formidable cultural and geographical barriers to overcome, and that “China” is not one country and culture, but many. While China seems to run on adrenaline, insiders caution that success is not built on energy alone – relationships are everything and these can take a long time to build. It makes sense to get a feel for the market first, and ProWine is clearly a good place to do that.

Felicity Carter

Felicity Carter attended ProWine as a guest of Messe Düsseldorf. 

This article first appeared in Issue 6, 2019 of Meininger's Wine Business International magazine, available by subscription in print or digital.

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