Wine goes to China
China has become the world’s biggest red wine consumer
With consumption almost tripling over the last six years, China has leapfrogged France and Italy to become the world’s number one red wine market, with surging demand for the variety in stark contrast to that for its inauspicious white counterpart.
From: tmogroup.asia - RJ Whitehead, 01.30.16
The consumption of red wine in China almost tripled between 2007 and 2013. This enabled the country to surpass France and Italy’s consumption of red wine last year. China indeed consumed 155 million cases of red wine, while France and Italy only drank 150 million and 141 million cases. The country’s e-commerce is also booming with 618 million internet users, among them 300 million are purchasing online. Both factors combined are making Chinese e-commerce wine market a good place to sell
1. Wine customers in China are changing
When wine first came to China, it was regarded as a symbol of the elite and rich and is usually used as a table wine. Wine companies defined their target customers as “Middle and upper middle class, usually government officials and business owners, aged around 40 to 65”. However, through the years a new segment of wine customers are emerging in China. These people are more likely to be “graduates, working in high-earning professions and in their late 20s or early 30s, who have picked up the wine-drinking habit at business dinners, but are now drinking wine in their social lives too”.
Meanwhile, the consumer behavior of Chinese wine shoppers is changing. Wine was only bought as a face-enhancing gift several years ago in China, but now consumers care more about how it tastes – because they will be drinking it themselves – and how much it costs, because they are more likely to be paying for it themselves as well.
2. Wine business owners are changing as well
Wine business owners are facing one common question nowadays: What should be done to connect and serve our younger generation customers?
Young customers today are technology savvy. “Social” is an important element of their daily lives, and being “social” can be both offline and online. Therefore, getting “social” with your customers could be one important task for wine business owners.
Take Everwine’s story for example: The Spanish wine company opened its own online store everwines.com to serve its Chinese customers who are passionate about quality imported and local wines.
Everwines also organize various marketing activities within introducing wines by free tasting, educating knowledge by wine class, hosting wine tasting events.
3. O2O: new solution for wine business
O2O, which stands for Online to Offline, is the principle of connecting the Online Digital World to the Offline World through the integration of internet-connected devices. China’s O2O space is predicted to grow to about $1.13 trillion by 2017, according data from IResearch cited by Bloomberg. This phenomenon keeps the public interested and is proved to be a good way for wine brands to interact with their online fans on the social networks.
Another very particular trend most recently is wine business owners are aiming Wechat. Nowadays, Wechat is far more than a smartphone application for chatting with friends in China.
Wine businesses can use WeChat to build up their Wechat e-commerce mini site, manage memberships, interact with frequent or potential customers, and send targeted promotions.
4. Welcome to the game, new players
It is no secret that companies like Alibaba and JD.com are dominant players of China’s e-commerce market. While these two drives the major sales of Chinese wine e-commerce market, there are still more wine e-commerce website coming to Chinese online shoppers. For example, LeTV, one of the lagest online video and entertainment company in China, launched its on wine e-commerce site, “Wangjiu.com”. LeTV hopes that its success on online TV and videos can help themselves reach to the potential clients who also have needs on wine shopping.
Besides corporations like LeTV, celebrities are aiming Chinese wine e-commerce market as well. Zhao Wei, one of the most famous actress in Mainland China, has bought a St Emilion chateau for an undisclosed price in 2011, and finally partner with tmall.com this year to make a big push on the wine sales. Meanwhile, retired Chinese basketball player Yao Ming has also partnered with tmall.com to promote his new wine brand, “Jing Feng”. The partnership was announced October 2015, a month before November 11, which usually generates the biggest sales for Alibaba every year.
The reason behind new players entering China’s wine e-commerce markets is that the market itself is too huge. In China, nearly 20% of wine in the country is now sold through e-commerce, and research shows that 46% of Chinese shoppers say that they are willing to purchase wine online. Since younger generation relies heavily on online shopping, it will completely change the traditional way of wine sales.
5. New Technology adapted in wine e-commerce
Today’s wine shoppers in China are definitely lucky, because not only they can easily purchase wine products through their smartphone applications in no time, but also these apps will obviously improve their wine shopping experiences.
For quite a lot of Chinese wine consumers, one major concern they have is lack of wine knowledge or language barriers can easily hold them in confusing situation when they’re choosing between numerous bottles of imported wines. 9 kacha (Chinese name: 酒咔嚓) is an app that can solve these problems. Thanks to the image recognition technology, the app enables users to simply scan the barcode or the label of the wine bottle, and all the information about this particular wine (name, year of produce, market price, etc.) will appear on your phone screen immediately. What’s more, 9 kacha will also show all the market prices from every single e-commerce sties for this particular wine you just scanned, which is a huge help for customers to compare the prices and finally make the decision.
TMO Group’s AR app is a perfect demonstration to show the indefinite possibilities of Augmented reality technology. With the boost of AR, your cellphone camera is not just a camera to take pictures. The camera can analyze the information, give feedback to the user, interact with the visual content, and last but not least, improve your daily life.