Here other rules apply

by | Jan 18, 2016 | Business and Marketing

Markets in Asia hold enormous opportunities, but don’t think it is simple.

Oliver Kirsten from The Grape Grinder perhaps put it best: “Have you seen how many watch advertisements there are in Hong Kong and Shanghai? With the high prevalence of cell phones, people in the West, especially the youth, don’t wear a lot of luxury watches anymore.The marketing focus and hope have shifted to the East. Isn’t the same thing also happening with wine?”

Yes, the hope has indeed shifted to the East. Every conceivable marketing strategy – also that of Wines of South Africa – has been adjusted to reap benefit from particularly the growing middle class here, which is thirsty for Western refreshments.

It is perhaps easier said than done. During the nearly two weeks I spent in Hong Kong and China, the clearest message was: Don’t think you have made a breakthrough  if you managed to send one shipment of wine. For long term success, focus, follow-up work and especially commitment are essential.

Ten key insights into Eastern markets:


The younger generation of Chinese are more world-wise, well-travelled and attracted to products that are indicative of class and success. Many younger Chinese have studied outside China and upon their return they set the tone with regard to new crazes and trends. Where strong liquor and ganbei! (the traditional toast that means ‘empty the glass’) were the custom for the previous generation, the new bunch are more fashion consious.

While the president of Grace Vineyard in China, Judy Chan, at the Hong Kong International Wine and Spirits Fair pointed to the fact that many older Chinese who previously drank stronger liquor are now switching to wine as the healthier option, the general feeling is that the younger market is particularly receptive to wine. And there is an enormous, growing middle class, mostly in the bigger cities, that will determine the direction of the wine market in China. This group is of vital importance.


The large amount of French brands that were present at both ProWine China and the Hong Kong International Wine and Spirits Fair, reflect the current state of affairs: A market that is totally dominated by the French, and especially by Bordeaux. Research that was presented by the wine personality Debra Meiburg (MW), shows however, that in future retailers in Beijing want to expand their portfolios of Spanish, Chilean, Argentinian, Australian and even American wines rather than those of French wines.

New legislation that is intended to curb corruption in China, has lead to a significant decline in the sales of top wines, and especially Bordeaux wines, which were often bought as gifts for government officials. Although it has also resulted in a decline in total sales, especially in value, it has (together with economic pressure) shifted the focus to wines that offer value for money. This presents a big opportunity for South Africa.


Cities in China are categorised according to tiers and where the so-called first-tier cities, like Sjanghai and Beijing, take the lead when it comes to trends and also wine consumption, the second-tier cities now hold the big opportunities.

It is difficult to determine what defines second-tier cities. One of the formal descriptions is that they have populations of between seven and ten million, but the international judge and educator, Fongyee Walker, reckons that from a wine perspective these cities can be classified as those that have both a McDonalds and a Starbucks!

The stunning numbers that are associated with second-tier cities, as well as the less severe competition, make these cities attractive, but also bring their own challenges. At the Wine in China conference, challenges in the supply chain, lower per capita income and greater ignorance were highlighted as some of the biggest obstacles.


Everywhere in the world social media has lead to the consumer, rather than the media or wine experts, influencing purchases. The almost obsessive use of WeChat in China, means that here this is even more applicable.

Walker mentioned that wine tastings are regularly organised by WeChat groups, even outside of the big metropoles. The Chinese have a particularly high regard for knowledge acquisition, and wine education is very popular. Educators, agents and even consumers with above-average knowledge, influence wine purchases, while the influence of traditional media channels is questioned. Even Meiburg – who has written wine columns for the South China Morning Post for years – says that she has never gotten the impression that the media really influence sales.


A tasting at ProWine China of wines that are highly rated by Decanter, highlighted the major role of women in the Chinese wine market. More than two-thirds of the people who attended it were women, so too the entire panel who presented the tasting.

It is also generally said that women are leading the trend away from French red wine, to wines like rosé, white wine and sparkling wine. “The perception that wine is healthy, is very important for women and they regularly drink wine, whereas the men tend to stick with their usual spirit options.”


The critical issue of cultural differences can merit an article in itself. It is a complex subject, encompassing everything from business cards to table manners. Culture can however make or break relationships and transactions, and therefore it is important to do research and to pay attention to the detail.

The French, Germans, Italians and especially Australians who are now based in China, do not only learn the language, but also the culture. There are also examples of the top Bordeaux cellars’ new generation owners who go to live in China or Hong Kong for a period of time. That is how seriously the issue of culture is regarded.


Bulk brands were regularly the subject of discussion and are considered ice breakers, in both the rapidly growing online market, as well as in new regions and cities in China. The notable absence of international, mass-shipped South African brands were pointed out as something that handicaps marketing of South African wines in general. This leads to the question whether a targeted campaign isn’t the desired approach. As a smaller region within the bigger context, it is impossible for South Africa to be everything for everyone – especially in a market with billions of people.

Interestingly enough, words like ‘boutique’ and ‘small scale’ do not have the same romantic, positive connotations in China as in the West. On the contrary. In certain circles these terms can be perceived as unsuccessful and even backward!


Imitations are a given in the Chinese market. It is so common in fact, that it has become customary to break all bottles after an occasion where wine is drunk, so that they cannot be replicated. It is also more than just a myth that there are more imitations of top Bordeaux wines in China than the real thing. Traceability therefore is very highly regarded and South Africa’s advanced certification system is an important strong point.


Currently Chinese wine in general is by no means something to write home about. The average Chinese wine is simple and produced on a large scale. The top Chinese cellars even try to convince their own people that Chinese wine should be taken seriously.

The influence of esteemed consultants and winemakers who have studied at the best wine education institutions, is however now coming to the fore in the bottles, with Cabernet Sauvignon from the Ningxia region in particular showing what can be done. The Chinese have shown in the past that they can masterfully imitate Western products and ultimately improve them. Why would wine be any exception?


The big excitement surrounding wine in the East tends to regularly focus on China, but markets like Taiwan, Singapore, Malaysia, Japan and even Macau should not be underestimated. It is not only about China, but also about new markets at a time when traditional wine markets show a notable downturn.

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