Though we are in May, the focus will here be on my Digital Vino live stream with Alessio Fortunato as a guest and the wine market in China from back in December. Alessio Fortunato is an Italian oenologist and wine consultant working mainly with the Chinese wine market. In fact, he started out about 7-8 years ago to teach wine business at the first university of enology and wine business in China, namely North West Agriculture and Forestry University in Xi’an.
At the beginning of the pandemic, Alessio was in Italy but last autumn he decided to go back to China just in time before they closed the borders for international travel.
When Alessio was a guest at Digital Vino live stream last December, we talked a lot about the wine market in China and the possibilities there for Italian wineries at the moment. All, with input from Alessio directly on the field, so to say. (The video below is in Italian, not English, sorry.)
After almost 1.5 years of the pandemic that had its beginning in China, most of the world is still battling Covid and its many mutations. Alessio went back to China last autumn and went through a series of Covid tests and quarantines for every Chinese province he entered. These were procedures that in the autumn of 2020, had still not been implemented here in Europe.
Wine Intelligence stressed last year in August that China was going through two major crises after years of continuous growth, namely the effects of the global pandemic and a downtrend in the economy due to Covid.
Already in December 2020, at my interview here with Alessio, he talked about China’s comeback and how it already by then seemed almost like Covid had never existed. The restaurants had already opened, people were getting vaccinated, the economy was getting back on its feet. Today, we can read about how China has registered its strongest growth since 2019. (See Biden and Xi talk of a clash of civilisations. But the real shared goal is dominance by Richard McGregor in The Guardian).
The pandemic has brought about a discussion about whether we are facing a situation where “The east is rising; the west is declining”. It is also being described as democracy versus autocracy. There is right now a bit of an escalation of the battle for supremacy between Biden’s USA and Xi’s China. The “old” Henry Kissinger talks about the risk for a new cold war if the relations between the US and China do not improve. The pandemic has indeed put our societies, political systems, and economies into question. It has revealed the weaknesses in the systems of many western countries, but still, democracy is something that is essential to fight for.
Let us look closer at Alessio’s impressions from his experience directly in China when it comes to the wine business. He says that even if China was quite far ahead on the digital side already before the pandemic hit, a lot of new online platforms for wine sales were created during the past year.
WeChat, of course, continues to be the main online channel in China with one billion users. In 2019, more than 800 billion transactions were carried out via Wechat. Essentially, you can do almost everything via WeChat from paying your bills to buying products, making payments, etc. WeChat offers you the possibility to have a personal as well as a business account where you can present yourself and/or your brand. With the help of programs or plug-ins within WeChat, you can set up small shops and sell your products.
How Italian Wineries Can Enter the Chinese Wine Market
Alessio says that when he first arrived in China, no importer there was selling online but rather they preferred to sell through people they already knew and to form personal relations to find new opportunities. That has certainly changed by now on the Chinese wine market, just as in the rest of the world.
Right in this period, it is, of course, difficult for a winery to enter China because many importers are trying to focus on the wineries they already have in their portfolio. Alessio is very positive and believes that there are huge possibilities in a near future for Italian wineries. His advice is to study the market, study social media and the online channels and how to leverage them.
Wine fairs are right now starting to be organized in China again, which was not yet the case when this livestream aired.
Still, Alessio thinks that wineries having an export manager traveling through China several times a year will probably not be a feasible option in the near future. China is still to a large part closed to people from abroad. He underlines that it might be more sustainable to find people who can help in China or get a brand ambassador that you can also share with other wineries to cut costs. The main thing to understand is that it takes a lot of time and effort, that no results will happen over the night.
A winery should furthermore think carefully about which of their wines could work well on the Chinese wine market and to what prices. Probably, according to Alessio, all your wines will not be suitable for the Chinese consumers, thus you need to make well-founded choices. In line with these choices, you can then try and find an importer that fits your needs.
It is also important to know how to present yourself as a winery. Chinese people like to get to know more about the background story of a winery, to learn more about the people working there. The human-to-human concept is key to success. Alessio continues by saying that Chinese people like stories about the people, such as details about the owner, like if he worked with something else before, why he decided to start making wine, his interests and hobbies, and so forth. When inviting them over to your winery, it is also important to spend a lot of time with the importer and his entourage and show great hospitality.
Another important thing to remember is that Chinese people are not really that interested in long wine tastings with a lot of technical information and tasting notes. They are more interested in hearing stories about the winery and its people, as mentioned earlier. However, I would say that this is becoming the general trend also in the western wine world. Long and boring tastings with a lot of complex details is not really how you win over a wine tourist or wine lover.
Chinese People and Their Taste in Wine
Chinese people are not born into a culture where wine is considered as an aliment and a part of the tradition as in Italy and the Mediterranean countries. Perhaps, I would say, it is a bit similar to the Scandinavian countries in that sense considering wine as an alcoholic beverage that you drink on certain occasions, often in excess.
Alessio stresses that they do not drink at home but rather wine drinking is associated with eating out in restaurants and in bars, or in connection with special occasions. They are often open to spending a lot of money on wine during business dinners, birthday parties, or other festivities. It can happen that a small dinner group finishes off over 10 bottles in an evening, Alessio commented.
Did you know that Chinese people are convinced that they get to know the real you when you get really drunk together? A bit like taking the masks off…Making toasts and drinking a sort of shots is a part of the Chinese spirit, says Alessio.
When it comes to the type of wine, Alessio points out that there is no longer any specific typology that fits all as in the past. China is a huge country and the taste varies a lot. Up until recently, sparkling wines were no hit with Chinese consumers but that has changed and Franciacorta wines are, for example, increasing their sales more and more.
On an ending note, Alessio emphasizes that this is a moment in history when there is a lot of potential for Italian wine in China. A winery that perhaps is not as strong on the local market can find success in China though it will take a good long-term plan.
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