As New Zealand prepares for the return of international visitors, tourism operators - including winery cellar doors - need to ensure their websites are ready.
Meanwhile, the way people find out about wine is changing, says Vanessa Wu, New Zealand Winegrowers' Shanghai-based China Market Manager. In this Social Place, Vanessa offers some insights, as well as thought from others immersed in the market.
How much wine is bought in China? And how much of that is New Zealand wine?
According to China Customs data, from January to December 2021, China's total import wine value is US$1,690 million, with volume of 424 million litres. New Zealand's bottled wine exports to China amounted to US$27 million, with the equivalent of 2.68 million litres.
Despite the downturn in the wine market accentuated by the Covid-19 pandemic, New Zealand wine exports to China have seen strong double-digit growth over the past year. Over the 12 months to the end of May 2022, New Zealand bottled wine exports have grown strongly in both volume (up 25% on a year ago) and value (up 32%). New Zealand exporters to China enjoy one of the highest average prices per litre of our major export markets, at NZD$14.16/litre.
What is the most popular New Zealand wine in China, and at what price point?
Celine Wang, New Zealand Trade and Enterprise's China Business Development Manager, says that while red wine is more favoured in China, New Zealand white wine, especially Sauvignon Blanc, wins the heart of more consumers on ecommerce platforms than its red wine. White wine accounted for 93% of wine sales revenue on New Zealand Wine pavilion on Tmall and JD.com. The price range of the most popular New Zealand wines is between NZD$32 to NZD$45 (in NZD) says Celine. Consumers are moving away from wines in the lowest price bracket, as Chinese consumers pivot to the higher quality wines.
What digital platforms are the most effective in marketing wine or influencing wine buying decisions in China?
On-trade remains the main channel for wine consumption, but consumers look for wine information online. The influence of traditional media is rather limited in China. Simon Zhou, founder of Ruby Red Fine Wine, says since 2018 the number of digital platforms availanle in China has "exploded". There is almost no one platform suited for everyone, and each has its own market and group of follower, says Simon. "The best form of digital marketing is to find those platforms that have the same type of people you are trying to reach and make content to suit these platforms. It is not recommended to try more platforms as things change very fast."
Having said that, with 1.24 billion active users, WeChat is the largest social media platform in the country. It is the everything-app for Chinese, and an important business tool worldwide. Chinese consumers use WeChat as an important source to follow and interact with their favourite brands. Many wine companies use WeChat as their primary marketing and sales channel.
And what online marketplaces do consumers seek?
E-commerce continues to be a key retail channel due to its ability to carry many SKUs contain more detailed product information, and not be constrained by shelf space limitations. Online wine sales channels are dominated by online marketplaces, which are essentially a duopoly between China's two leading e-retailers, Tmall and JD.com. Meanwhile, more specialised online wine players such as 1919.cn, Vinehoo, Miss Yuan, and Lady Penguin, are seeing gains and more suitable for smaller brands.
What do you see as the most important factors in selling New Zealand wine in China?
Simon says New Zealand wine is already well known in the wine community, "not only the aromatic and crispy Sauvignon Blanc, and fruit driven and silky textured Pinot, or the rich and perfumed Syrah; it is the work of many New Zealand wine people doing the right thing repeatedly," he says. "I think no one will question the quality of New Zealand wines, but at this moment we should also let the trade know the value of New Zealand wines. New Zealand wines will never be in the cheaper end of the market, but we need to show the value, the QPR of New Zealand wines, and the enjoyment that it can deliver," says Simon.
What role do influencers play in China, when it comes to wine purchases?
In China, influencers are an incredibly important part of brand promotion due to restrictions on advertising. Simon notes that as the amount of information sources become overwhelming, "the people you trust, and their opinion, become very important". This creates teh role of influencers, KOL, or KOC (key opinion consumers), he says. With community purchase very common in Covid times, this new role has almost risen above all of the other channels, he says. "I think, at least for the foreseeable future, influencers will be the most effective and important marketing route."
When it comes to wines, the key influencers include Masters of Wine, top sommeliers, wine writers and critics, and also some top individual wine influencers like Lady Penguin, Tery Xu, and Leon Liang.
Vanessa's Top Tips For Kiwi Wine Companies in China
- Share a story other than just wine and build consistent and clearly recognisable branding.
- Do not rely on distributors to do all the work. Be involved in the business and market development.
- Determine your retail price across various channels. Price level consistency is critical.
- Digital channels cannot be ignored. But a separate digital strategy must be made to embrace the e-opportunities.
- For larger brands, setting up and maintaining your own digital platform to get closer to your customers - sharing information and activities - is important.
- For smaller enterprises, it is highly recommended to ask your distributor about the details of their digital strategy.
- Don't aim for too long: fire first, then adjust.