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Both production and imports have fallen: what's wrong with the Chinese wine market?

Article editor: PengHai International Reading:113 Time:2020-10-27

"Wine must pay the debts of the market!" At this year's China Wine Show, Wang Zuming, the former Secretary-General of the Wine Branch of the China Wine Association and the Secretary-General of the Wine Professional Committee of the China Wine Circulation Association, said in the words-the epidemic has the greatest impact on wine. In fact, the serious decline is also related to the problems of the wine itself.

This year, the decline of wine has been sharpest among the major wine varieties in my country.

According to the China Liquor Industry Association, from January to August, the total wine production of enterprises above designated size in the wine industry across the country was 37.497 million kiloliters, a year-on-year decrease of 3%. Among them, the output of liquor was 4.18 million kiloliters, down 11% year-on-year; the output of beer was 24.98 million kiloliters, down 7.87% year-on-year; the output of wine was 167,800 kiloliters, down 28.9% year-on-year.

Not only has the production of domestic wines declined, but imported wines have also fallen into the "30%" curse. According to the data released by the Liquor Importers and Exporters Branch of the China Chamber of Commerce for Importers and Exporters of Food, Native Produce and Animal Husbandry, in the first half of the year, the volume and value of my country's imported wine fell at around 30% year-on-year.

Also from the data released by the above associations, after the decline, in the first half of the year, the sales revenue of regulated wine companies (referring to wine companies with annual revenues of more than 20 million yuan) and wine imports totaled US$830 million, which was not as good as liquor. Half-year sales performance of Yanghe shares.

The life of domestic wine is even more sad. In the first half of the year, the sales revenue of regulated enterprises was less than 4.5 billion yuan, which was not only surpassed by the import volume of wine, but also the overall scale (sales revenue of 6.4 billion yuan) and profit (600 million yuan) of rice wine. The half-year sales revenue of domestic wine is only equivalent to the scale of Kweichow Moutai's series of wines.

In fact, this year's epidemic has only worsened the domestic wine industry. As early as 2018, the cumulative operating income of 212 wine companies in my country was less than 30 billion yuan. Compared with the liquor market scale of more than 500 billion yuan, it is less than 1/10 of the latter, and the total profit is only a fraction of the liquor companies. Only 3 billion yuan. Sun Jian, general manager of Changyu shares, once said at the shareholders meeting that compared with baijiu, people are like fighting in the sea, but we are swimming in the swimming pool.

The crisis has been around for a long time. In the view of wine expert Wang Dehui, domestic wines have fluctuated and declined since 2012 when their sales and profits reached their peak, until they were surpassed by imported wines. After the volume of imported wines reached their peak in 2017, they have been declining since 2018.

Recently, at the Moganshan Forum for Leading Liquor Companies in 2020, Zhou Hongjiang, chairman of Changyu, a leader in the wine industry, reflected on it. He said frankly that he had just conducted a deep review at the closed-door meeting held by the China Wine Association: the top enterprises did not do well, which affected the development of the entire wine industry. , Healthy competition and common development." Zhou Hongjiang said.

"Wine must pay the debts of the market!" At this year's China Wine Show, Wang Zuming, the former Secretary-General of the Wine Branch of the China Wine Association and the Secretary-General of the Wine Professional Committee of the China Liquor Circulation Association, said it even more-the impact of the epidemic on wine The biggest, in fact, the serious decline is also related to the problems of the wine itself.

The three major debts of wine

During the Mid-Autumn Festival and National Day peak seasons that just passed, for merchants, wine sales were much worse than in previous years.

On September 23, the 21st Century Business Herald reporter saw in the China Resources Vanguard Supermarket in Nan'an District, Chongqing that, as a well-known domestic brand, Great Wall wine was actually bought as a promotional gift for the King of Baijiu Fenggu and appeared on the eye-catching shelf. Location. The market position of wine is evident.

What's wrong with wine? From 1995 and 1996 to the present, what are manufacturers worth doing and which are worth reflecting on?

Before the National Day, at the China Wine Exhibition held in Qingdao, many industry leaders participated in the first China Wine Industry Annual Conference and the 4th Global Wine G50 Summit. This is the first collective introspection on the other side of the wine industry since the outbreak of the epidemic.

In the wine industry, how to make up for the lessons of Chinese wine? How can the Chinese wine market get it back? Zhang Yanzhi, chairman of Ningxia Xige Winery Co., Ltd., who has grown grapes and built wineries in Wuzhong City, Ningxia since 2017, said at the annual meeting that the development of wine used to be more focused on brand marketing, and now it is at least one step forward. To know that wine is made, this is the first step. Go to the roots to grow grapes.

"A good wine is grown in seven minutes and made in three minutes." Zhang Yanzhi believes that this lesson needs to be supplemented from planting grapes to making wine. He made domestic wine, but when he returned to his hometown of Qingdao during the New Year, the classmates brought him out to entertain him with imported wine.

"This is a lack of confidence. When everyone thinks that imported wine represents high quality and domestic wine represents poor quality. This is the root cause of the overall decline in Chinese wine sales." He said that how to restore consumer confidence must be done from the field. rise.

The second debt to the market is the huge contrast between aggressive market sales and non-consumer daily consumption of beverages and alcohol.

"This epidemic has the greatest impact on wine, because until now, wine has been mainly concentrated in consumption and catering. Liquor and beer are supported by a certain amount of household consumption." Wang Zuming believes that there will be a retaliatory after the epidemic. Growth, but only partial and short-term for wine.

In collective reflection, both the secretary-general of the association, marketing experts and importers agreed that it is a long-term and arduous task for wine to enter the daily consumption of consumers.

Wang Zuming said that wine is the same as a besieged city. The people outside looked very lively inside and thought that wine was very profitable, but when they really came in, they found that money was not so good. In 2016, imported wines increased on a large scale. I don't know that the market will start to sell wine in the second half of 2018. You can buy one get one free for more than ten dollars. In addition, when imported wine is on the rise, 2/3 of the wine merchants are changing. This is related to immigrant wine and capital speculation.

He said that since he joined the China Wine Industry Association in 2005, the scale of wine imports has continued to expand, but the market has not grown. The oversupply has caused wine to go out even if it is cheap, which has a great impact on regular wine sellers and also sends a very bad message to consumers.

Why can't the market hold so much wine? He believes that Chinese people do not have enough knowledge of wine, nor do they have the genes to drink wine naturally. Chinese wine has a long history, but there are gaps and gaps between this history and the current wine. The gap in consumption power cannot be avoided. Wine consumption is mainly concentrated in Guangdong, Fujian, Zhejiang and Shanghai.

Wang Dehui, a wine expert and general manager of Shenzhen Zhide Marketing Planning Co., Ltd., further stated that many Chinese have not drunk wine before, and wine has entered a stage of differentiation prematurely. Therefore, the biggest competitor of domestic wine is not imported wine, but liquor. Liquor is divided into cakes, and wine is still making cakes.

He said that wine is a very special commodity, with many countries, producing regions, varieties, and varieties. The subtle differences in quality are difficult to distinguish, and there is a strong sense of ritual. For Chinese consumers who have not experienced popularity, purchases are either through brands or recommended by friends. The lack of brand building is the third largest debt owed to the market by wine.

 Redo the wine

"Fully understand and reflect on the problems of the industry and the enterprises themselves. Although the macro economy is not positively related to the wine industry, the outbreak of the epidemic will definitely bring about changes in the economy and consumption." Wang Zuming said.

He suggested that importers may consider switching to domestic liquor, which may be a "spare tire."

Wang Dehui also believes that the opportunity for domestic wine is here.

In 2018, there were 237 Taobao “Double 11” single brands that sold more than 100 million yuan, of which 50% were domestic products. In 2019, there are more than 290 single brands selling over 100 million in the "Double 11" single brand, 61% of which are domestically produced, and the rate of increase is very fast. He believes that domestic products will be very popular in the next three years.

But how can domestic wine regain market confidence?

"Does the market value of tens of billions worth of attention? China's wine industry has a very strong bond, which is related to the governance of the Yellow River and deserted beaches, to poverty alleviation, and cultural self-confidence and consumer self-confidence. The industry is small. But this is very core." Zhang Yanzhi said that his happiest moment was at 7 o'clock in the morning. He opened the window and saw that the vineyards were full of pink turbans. Behind every turban is a family.

But the domestic wine is too much in debt and needs to be done again.

Zhang Yanzhi said that after he came to Ningxia, he integrated the local 20-year old vineyard and planted another 5,000 mu. During the epidemic, Xige Winery also planted more than 1,000 mu of grape seedlings. "The quality of wine should be good, and the focus should be on planting and brewing," he said.

Once the grapes are planted, they will be marketed.

"I always think that the biggest issue of liquor is youthfulness, and the biggest issue of wine is sinking." Yin Kai, former president of Castellar China and current vice president of Yijiubai E-commerce Co., Ltd., said at the annual meeting that during the epidemic Wine sales in France, Italy, and the United States have all increased in the mature markets of China, but the opposite is true in China.

Like domestic wines, imported wines have to be re-marketed.

He pointed out that Tmall, Taobao, and 2B e-commerce accounted for an increasing proportion of the liquor distribution system. They can help manufacturers directly reach consumers in China's third- and fourth-tier markets and even more sinking markets. "In the past, we did a lot of promotion, but the proportion that can really reach the consumer level is very low." He said.

Also with a sinking view are Mouton Rothschild Winery's Asia Pacific Marketing Director Wang Wenjia and Spain's Osbourg Group's Greater China General Manager He Sai. Wang Wenjia said that Bordeaux wines are sold to all over the world through middlemen, but it is not clear whether these wines have been drunk. Now, wineries are beginning to reach out to people who drink and love wine in the market, that is, private customers. Similarly, although the Ao Sibao family, which has a history of nearly 250 years, entered China late, it changed the agency model and directly established branches and formed its own operating team.

Wang Zuming said that whether channels are sinking, celebrity endorsements, live broadcasts, or e-commerce have pros and cons, we must find our own way. "The market heats up, and it is the brand that will eventually return." He said, including corporate brands, production area brands, and merchant brands.

In this regard, Bi Duwei, president of Castella Asia Pacific, believes that OEM wine will continue to exist, but it is not the direction of development. Two years ago, the Chinese market has developed into the world's No. 1 sales of luxury goods, including cosmetics, automobiles and daily necessities. He believes that as the wine consumer market gradually matures, consumption will be concentrated in three parts: luxury brands, light luxury brands and mass circulation brands.

"The relationship between brand and sales must be properly handled. When you start a brand, don't hope that the brand will bring sales. You must control the positioning and price of the brand. Remember that the brand is the result, not the cause." Wang Dehui said.

"Imported wines and Chinese wines are a competitive relationship. They compete with each other, develop together, and grow bigger together. I hope it is a double spiral curve." Zhang Yanzhi said.

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