Research in Focus - China: 1.3bn People, 19m Wine Drinkers, Six Types of Consumer

Just about everyone in the wine trade wants to do business with China. And by now, just about everyone has realised that, despite the explosive growth in the Chinese market, this isn’t the easiest thing to achieve. Barriers to entry are numerous; failure rates are high.

Understandably, exporters expend a lot of time and energy dealing with the bureaucracy issues they face in China, the logistical conundrums they need to compute, and the business etiquette they have to grasp. After all that, sometimes the consumer can be an afterthought.

With 1.3bn people living in China, the idea of trying to get a handle on collective consumer behaviour seems impossible. But, the number of people drinking imported wine is slightly more manageable, at 19m. Wine Intelligence, which calculates that figure based on its years of research in six of China’s Tier 1 and Tier 2 cities, has identified six distinct consumer groups within the wine-drinking population.

These “Portrait” groups were uncovered through a mixture of quantitative research (Wine Intelligence’s Vinitrac surveys) and also qualitative methodology (face-to-face interviews with consumers). For the first time, Chinese wine consumers can be understood in a meaningful way, not simply regarded as a single mass, or judged according to some of the lazy stereotypes that have built up in the West (Not many Chinese, by the way, are really mixing Coca-Cola with Lafite and downing it in one).

“Assumptions about preferences and behaviour drawn from Western culture can often be misleading when applied to China, and can lead to costly branding and marketing mistakes,” says Maria Troein, Wine Intelligence’s country manager.

“It is important to remember that the Chinese market is still at an early stage of development. Most consumers are still relatively new to the category, and it is too early to say how their relationship with wine will evolve.” But, she adds, “despite the early stage of market development, distinct consumer groups have begun to emerge”.

The two most important Portrait groups, at least in terms of their current impact on the market, are described as 'Adventurous Connoisseurs', and 'Prestige-Seeking Traditionalists'. Between them, they account for 65% of all spending on imported wines, and just under a third of consumer numbers.

Adventurous Connoisseurs are high-spending, confident wine drinkers, who buy from a broad range of wine styles and indeed a variety of retail channels. For them, wine is a frequent treat, in social, domestic or business surroundings. Typically in their 30s, and generally male, this group regards wine as part of the sophisticated, cosmopolitan lifestyle which for them defines the new China.

But, they are also interested in wine for its own sake: it’s not merely a status symbol. Adventurous Connoisseurs are keen to expand their knowledge about wine, perhaps by attending a local tasting or joining discussions on the Weibo social media network, where recommendations might be shared. Brands don’t tend to play a huge role in the repertoires of Adventurous Connoisseurs, who veer towards European wines but can be tempted by premium offerings from the New World.

The Portrait group that arguably seems most familiar to Western observers is the Prestige-seeking Traditionalists: a wealthy, conservative group who tend to do much of their wine drinking in the business world. Bordeaux and Burgundy are the wines of choice, bestowing a degree of status either on themselves or their associates. This is the group that is usually blamed for soaring cru classé prices.

But, according to Troein: “This group is likely at its peak, and will decline in importance as the market matures”. If that’s the case, which other consumer groups should China-watchers be keeping an eye on?

Two Portrait groups to watch are the 'Social Newbies', a young group that already makes up 26% of the wine-drinking population, and the middle-aged, mainstream 'Casual-at-Homers', which account for 18% of wine consumers. Troein tips both groups for growth, given the right encouragement.

That encouragement could take a number of different forms. Many Chinese consumers already see wine as a symbol of a modern, sophisticated lifestyle, and there is a widespread perception that there are some health benefits too. (Wine is now served at official functions instead of the domestic spirit baiju, mainly because it’s far less alcoholic, while some low-involvement consumers have adopted a modest intake of wine as part of their wellbeing programmes.)

Education will play an important role, Troein predicts, especially for the top-spending groups. “The data shows that some consumer segments do, in fact, enjoy learning more about wine, and crave wine-related information and education,” she says. “For Adventurous Connoisseurs, this might involve wine tastings focused on exploring new styles and regions, while for Prestige-Seeking Traditionalists, it could be detailed briefings on the Bordeaux and Burgundy classification systems, or similar classification systems used in other premium wine-growing regions.”

It’s a big mistake, however, to assume that all Chinese wine drinkers want to take lessons in wine appreciation, Troein adds. “For other consumers, the drive to learn is less strong, and the task should instead be for international wine business to adapt their communications to the language that these consumers already use,” she says, “ and to find ways to make their product intelligible to consumers without expecting them to make the effort to learn more.”

For more details about Wine Intelligence's latest report on Chinese consumers, click here.