Get an overview of the dynamics of the Chinese market for wine with this webinar. We sum up the recent figures, consumption drivers, channels and emerging trends, as well as domestic production and imports into China. Obtain tips and recommendations for selling or promoting wine in the Chinese market, including on aspects unique to EU products. Three experts active in the promotion of European wines in the Chinese market share their insights on branding and marketing.
Time stamps:
00:00:00 EU SME Centre introduction
00:03:39 CICC introduction
00:06:01 Overview of Wine Market report
00:08:24 Consumption of wine in China
00:11:11 Consumer profiles
00:13:19 Wine imports into China
00:18:39 Wine sales channels in China
00:20:17 Wine market outlook
00:21:42 Market entry requirements
00:23:06 GACC CIFER system
00:24:31 Labelling requirements
00:26:14 Advice for European wine producers
00:32:23 Experience sharing: Michele Taccetti, China 2000 Srl
00:42:57 Simone Semprini, VM Fine Wines
00:48:49 Francesco D’Aprile, P&D Consulting
01:01:21 Q&A session
Disclaimer:
The EU SME Centre is a project funded by the European Union. This recording was produced with the financial support of the European Union. Its content are the sole responsibility of EU SME Centre and do not necessarily reflect the views of the European Union.
Welcome to this uh webinar this USM Center webinar on the uh Chinese wine market my name is alesio patino I’m the business advisor of the usme center and uh today I’ll be your moderate the moderator of this event um uh so this event uh is going to be uh
Divided into three main parts uh first there will be a small introduction about our project or partners then I’ll provide um a short uh introduction to a report that we have recently released on the Chinese B market um in the second part we’re going to have three presentations of from three very
Renowned uh Professionals in the wine industry in China they will share a little bit they will introduce a little bit their experience some of the tips and then after that we are going to have half an hour um around half an hour discussion Q&A uh where we will be
Taking questions from the audience um so if you have any questions please uh write them in the Q&A section and we will address them at the at the end in the last session uh so before starting I would like to make a short introduction about our project the usme center is
Funded by the European commission uh since 2010 so already 14 years um our mission is to support European small and mediumsized Enterprises as well as Chamber of Commerce business uh support organization um we support them in getting to know China in giving information about how to
Enter the Chinese market what to be um how to be prepared to this uh to enter the Chinese market and um um yes we are implemented by a Consortium of uh chambers of Partners which you can see on the bottom and among this the China Italy Chamber of Commerce who is
Organizing who is supporting this event today and also the report that I’m going to introduce is the um is the coordinator of this Consortium um how we support companies as smmes is mainly through five Services I would like to say that everything we do all services we do are completely free of charge
You’re not you’re never going to pay a single scent um we have a SE Anis Tool uh basically a sort of quits that you can take uh on our website we have a Knowledge Center we have we publish guidelines Market access reports like the one we are uh going to introduce
Today we have an advice Center a sort of Health Des that you can use to ask um any questions you have including technical questions about uh labels uh technical standards and uh but also other general questions um completely free we have experts at your disposal to answer this we have training sessions
And we have an advocacy uh platform so um yeah I mentioned this this knowledge this is you will see later uh in the presentation this wine but we also have others on on horizontal issues like the GCC Cipher registration health food food additives but also other um issues such
As uh how to draft sales contract if you are negotiating with Chinese importer what kind of closes you should include what you should uh pay attention to so this is uh pretty much it um before uh starting I would like to give the floor to the to miss feder viani who is the
Manager of the uh pin Office of the China Italy chamber of Commerce who uh again has been very uh active and and uh helpful in supporting this activity today and the report thank you alesio good morning and good afternoon to everyone thank you very much for the invitation I’m very
Happy just to say a very few quick words in our chamber and also the support that we provide to Italian companies based here in China and also those that are interested in the market uh we are very we’re very happy as um as partners and leading partner of the Consortium to to
Be part also of all these activities that our sector base of course uh the China Italy Chamber of Commerce is uh the only Business Association that represents Italian companies here on the market uh we’re recognized by both Ministry in Italy and in China and we
Have uh over 30 years of History here in China our offices are comprehensive of all the territories in the main areas so uh Beijing Shanghai sujo and so on and so forth we have eight offices in the key areas uh of course the food and beverage and wine in particular is one
Of the main areas of expertise of our companies uh here on the market uh ital is definitely on the Forefront for what concerns the the wine sector and uh so I’m very happy today to have these three experts from our companies that will be sharing their insights and expertise to
Uh to the audience uh as a chamber of commerce allow me also to mention that we have a food and beverage working group that is therefore dedicated uh to the industry and includes all companies working in the food and beverage and Ora sector such as manufacturers importers and companies also Italian restaurants in
China um to companies here in China we also provide support expertise sharing and information just like the the one event uh we are happy to organize today with the US Miss Center so with this say uh I wish you all um a very fruitful uh a very fruitful webinar today thank
You thank you very much Federica so if you are an Italian company wi producer uh professional or if you’re based in China you’re very welcome to get in touch with the Italian chamber they have a great team of people who are ready to support you
Uh very closely so now we move into the first part of this webinar um I’m going to have a very short introduction about the report um that we have uh that we published two months ago in November so this report you can find the QR code
Here to access it on our website it’s completely free again you just uh you might need to register on our website first in order before you are allowed to to to access the download link uh but um uh yeah after that um you you will be
Able to download it so this report um is uh there are four main sections the first one focuses a little bit on the Chinese one market um covering issues such as the consumption uh consumption who are the consumers but also domestic production uh of course the most important probably section is the
Imports situation uh but also then the distribution and Retail channels and also what’s a little bit the Outlook of the market in the future second section focuses more on the regulatory side on the technical aspects um particular this Cipher JCC Cipher registration but also food safety standards what are the
Content of labels that you have to put on wine and we also have um I think it’s a very interesting section on on a cases of um imported wine rejected by the Chinese Customs it gives you an idea of from from which countries for which reasons these were rejected and um U we
Also have another section which is a more kind of um summary of what uh the challenges and recommendations are it focuses on different aspects um including one um on on geographical indications which is is a very important topic um recently for Europe and China and also one on funding and there will
Be a specific slide on this um and then we have case studies we have done interviews with uh with three uh industry professionals which uh we are very happy to host to have uh today on board they will they will share their insights later later uh but of course in
The report you can find full interviews uh very detailed interviews so um today I’m just going to give a very uh short brief overview of uh of the content of some of the content of the report again it’s it’s a very uh detailed and comprehensive report so it’s just going
To be a glimpse into um into this report is to show you what you uh can expect to find in this report so um overall the Chinese Wine Market has been uh the consumption of wine in China has been decreasing and this started actually uh well before the pandemic I think at
Least um since 2017 consumption has been uh decreasing quite um steadily I would say um however this doesn’t mean that wine is becoming less important uh on the contrary we see that despite decrease consumption the culture of wine the knowledge of wine the wareness of of
Wine um and all the cultural um let’s say um aspects around wine are have been actually uh growing so it China Still Remains a very important uh is absolutely a very important market for European wine producers um among all the varieties red still red wine is uh looks we will see
Also later in the import section but this still red wine is the most important Varity terms of Market drivers what is driving the market um um wine overall is is recognized as a healthier alcoholic beverage compared to others there is also a lot of uh investment from local companies Al and also foreign
Companies actually in local um wine production which actually contributes to more knowledge uh to to to to Growing the culture of wine in China uh of course it also maybe leads to more competition but if uh if it also has positive impact on on the awareness of
Wine um uh wine is also slowly emerging for for ordinary conception so not just for I you know when you have big dinners uh just to show off basically but also for more um for people to to enjoy it uh maybe even alone or with a few people um
There is also growing interest in in learning about wine in learning different wine regions different varities so testing and learning activities and last I would say that we all read from the news that the consumption in China has not recovered uh after the pandemic this is uh very
Very true I mean this is a fact a conception and is is is very low um but this doesn’t mean the Chinese are not spending they are spending less uh but they’re spending more carefully so so they they maybe they make more research on what they are about to purchase and
Um they make more informed choices and um uh I would like to end this Slide by saying that China is not a homogeneous Market it’s not a single Market in fact it’s it’s a it’s a market of markets um there are different markets different operators uh different actors different
Channels in each regions so you should um focus initially on one or you know on a specific region and then only after that maybe try to expand to others um terms of consumers uh of course this are very general points but there are different personas let’s say we have a
Sophisticated consumers who are somewhat frequent drinkers they um they are more in search of experience uh they have more knowledge about wine grape varieties about wine regions and and maybe they search from new new new new experiences like organic or or other um other um experiences you have an
Affluent consumers who is pretty much U let’s say a high income individual who is mostly concerned about the brands uh wants to show that he that this person drinks a very very expensive uh wine and um this I would say uh then then we have mainstream consumers which are you know
The the main the main the bulk of of the consumers these are irregular to somewhat frequent drinkers but they’re are more maybe oriented they have more price award so um so they the pising is is a more important factor for this target group compared to the previous
Two um they’re also very open suceptible to to marketing campaigns promotional campaigns especially during Commerce festival and so on you also have businesses business in channel uh there are many Chinese companies for instance for their annual uh meetings uh they they buy a lot of wine to to drink of
Course for the for the for the Neu but also to to give it as a present to their to their um employees um and this is more let’s say um price is a very important factor here as well and uh and then there’s also a gifting Channel it
Used to be pretty important uh in the past now is uh the importance is decreasing a little bit but it’s still there so um Chinese people like to give gifts uh in many occasions um and for this target group I would say packaging uh and brand uh but but but especially
Packaging is is a very important um fact of design of terms of import uh this is the most important section I would say uh wine Imports have been decreasing um significantly this started before covid this this is uh again in line with consumption also the domestic production
Has been decreasing so it’s not just Imports are decreasing while all the rest is increasing no everything is decreasing uh but I would like to say that this started before the pandemic there are different reasons for that um the main uh the most important one is
That um you know during let’s say the mid of the 20110 of the previous decades there was this uh rushing importing wine this has led to a lot of stock which remain unsold so in the previous year so so a wine that was already available on the market but not
Sold and this has affected the the amount of of wine imported later you can see from the from the chart here and um um among all the different types of wine talking about sparkling wine or bottle steel wine or or bulk wine uh bottle steel wine is um and especially red is
The most important variet you see on the second chart here the share of Bott will steal wine on the total um types of um wine imported is more than 80% so so it’s a very sparkling has been growing a little bit but it’s still pretty pretty uh small in still has a
Very small share so um in terms of the European Union Europe of course is very famous for for wine especially from a few countries and it’s widely recognized for its uh centuries old traditions of of wine making um but there’s um so so why so European Europe has a very
Important role uh in very important share in Chinese wine in the Chinese wine market but there are many competitors uh actually not that many but a few competitors which enjoy often enjoy free trade agreements with China they don’t have custom duties of wine import so um the imported price will be
Lower and this affects um a lot the competition this chart here you see for sparkling wine of course the the the the role the share of European of Europe in the Chinese wine market depends on the type of wine for sparkling is kind of a monopol 98% of share uh basically the
Totality of the sparkling wine in China uh comes from Europe um and especially we see on the second chart uh France Italy and and Spain now uh France Italy is a bit um interesting situation because France leads uh a 72% share for value of imports but it has a 20% of
Share in the volume of imports while Italy has more than half more than half of the sparkling wine bottles imported in China are Italian sparkling wine um in terms of volume but in terms of value is a bit uh is lower so of course the price is is of course France we have
Champagne basically which is very very expensive um for bottal red wine the the Europe has uh of course is is a leader uh but not as much as parling wine you see here um this chart the current uh the market share of Europe in 2022 was 62% and it
Uh what I would like to say that is that from 2020 to 2021 the market share jumped from 42% to 67% this is mainly the result of um custom duties uh imposed on Australian wine which Australia used to be a very important uh player in the Chinese B market then
Because of some political tensions there were uh some additional custom D duties which de facto kind of uh closed the door to uh Australian wine to the Chinese market so this Australian wine was kind of replaced by some European wine but uh not only also also Chilean
Wine actually and for bottle wine we see that France is still the most important actor but Chile is the second one chil has different advantages one of them is a free trade agreement with China but also that um China actually has very big wine producers uh CH Chilean wine
Producers are very big so they have a lot of industrial resources they have a lot of industrial channels to to establish a pretty solid commercial presence in China while maybe in other countries in Europe uh wineries are still very small family managed um and um maybe they lack some some of the
Resources to to to establish a solid commercial commercial pres in country uh last um bulk wine um you see the situation is very different we have two types of bulk wine here uh in containers more than 2 lit but below 10 lit uh on the left and then on the right we have
Uh containers of bigger than 10 liters so in both cases uh the leaders are United States and and Chile and um so you can actually you can go to t-o to t and just search uh you know um big container wine and then you will see
Also the brands you will see the type of packaging they have if it’s 2.5 L 3 l um you can get a lot of insights on top of um channels uh there are different channels of course are super market specialty stores we see we know like
Jenny Lu pain Beijing but also Corner St oay in other cities gujo Shanghai um these are Focus mostly on imported food and beverage and you will find a big selection of important wines there uh there are convenience store 7eleven loens these have very small choice of
Wine and um but it’s a very also very difficult sector to enter for European wines it’s very difficult to have your wine there food service restaurants international hotels restaurants this is uh I would say one of still one of the important most important channels for European wine um it suffered a little
Bit during the pandemic but uh hopefully um his recovering e-commerce but also social e-commerce uh this has been the most uh important sector growing the at the highest speed we also have one uh speaker today who will uh share a little bit how how they are leveraging this
These channels for for selling the wine crossb e-commerce um is is a different type of e-commerce it’s not exactly e-commerce but this is not very relevant for wine we will see later and then as I mentioned before there is the gifting channel so the three most important sector for European wine producers I
Would say are are are those uh marked in in red here in this slide so specialized stores even though it’s not easy to enter such uh such Stores um but still um these are important very important channels Food Service as well as e-commerce um last uh to end this Market um overview
Um many people are kind of uh you know consumption production Imports are decreasing uh but this decreasing quantity um doesn’t necessarily indicate correspond to a decreasing quality on the contrary um many experts uh think that uh that the market the Chinese market for wine is is going through a
Self adjustment uh phase is a natural uh direction of the market um so so the quality um uh so so decreasing quantity actually might benefit uh might bring benefits in in terms of quality um also the market is is is gradually evolving from a pure import export model into a a
Model where foreign wine producers and local players be it local wine producers or local commercial operators companies they have stronger Corporation there is a maybe a joint investment to do something bigger so rather than just selling a batch a container of wine to China and also uh there are new
Opportunities emerging like social e-commerce as we mentioned and as we we will see later so again I’m going a bit fast because time is is short and and I prefer to allocate more time to questions with the speakers but you will find all of this content in the report
Also in a very detailed way um terms of requirements I would say that there are two main ways to enter the Chinese market one is General trade the normal way to enter the Chinese market and the other is crossb eCommerce crossboard eCommerce is mostly used for products
Such as Cosmetics or health food uh for why I would say this is not an important way because um importing wine into China is actually pretty straightforward is is not it’s not that difficult um you need to do um just a few things the first most important one is um before you ship
Your product the wine to China you should complete a registration on a specific portal of the Chinese custom this is called Cipher registration you have to follow a few food safety standards but these standards are are not different from what okay are not different from you standard so you are
Not going to have big troubles here uh you have to have a Chinese label uh and you have to put it on the bottle um but also again the the the contract the label is pretty standardized so you’re not going to have much troubles in preparing one
Um among these the most important one is cipher registration um and it needs to we we recommend to complete it even if you’re just going to participate in a trade pair in China you’re going to ship a few bottles to to to you know to to present during the Trade Fair uh we
Advise you to complete it even in that case um specifically this this Cipher registration here there is um the link here in the slide you can access the platform we also have a dedicated guideline by the way but wine is is considered a lowrisk kind of um category
So the registration can be done independently by the wine producers and it generally takes around I would say couple of weeks to complete to have it approved once you go into the system of course you should first create an account and then you feel some information sometimes it could be a bit
Tricky but it’s not that complicated and then maybe I would say in about two weeks time your application will be reviewed and approved hopefully so take this into account and and I would like to say that the registration is completely free we are aware that there are some websites some portals which
Propose you to to complete this regist ation they even use the name gacc in their website name um but they ask for a fee like €900 fee uh these are um these are not the official channels official registration is free then of course you can work with a consultant
Will help you but that’s a different story uh the registration will still need to be done on this uh Cipher single window platform no other website um then once you complete this registration you should uh you will receive a code which you have to put on the label and I’ll
Show you uh maybe yeah here you see this is this is um the label of of an imported wine uh you see Circle in red is the code that you will receive after you complete the registration on the cipher system it must be there if the
Code is not in the label the the wine will be rejected by the Chinese Customs so then there are other types of type of content in the label uh it’s pretty straightforward I would say you know it’s it’s pretty standardized there are Health warnings storage conditions of course um wine region vintage year
Alcohol content and so on and um per standard uh you can actually the most common way is to affix it um to put a sticker on the bottle um before uh the product is shipped to China you can also actually um do it once the product arrive in China if uh
The product arrives in a free trade zone or a bonded Zone um this is a bit more complicated because the Chinese importer will then need to go to the there to stick the sticker so so um we we I recommend the first uh way going back to
Food safety standards again it’s I’m not going to focus on this but the report you will see tables we have translated all the Chinese standards into English to see uh you know what what is uh what do you have to follow in terms of um uh you know microbiological requirements
But also sugar content and so on um again this is Crystal Clear in the in the report um so I’m not going to spend more than this on this because I would like to focus on two last slides um so um we have a summary uh we have done
Three interviews with the with the three experts who are also here today but we also talked to other industry professionals uh we come we came up with a with a short summary of of the main tips uh emerg from these interviews I would say the the first most important one uh is that
Um Chinese market for wine is very competitive and we also seen there are competitors from other from other countries which enjoy uh zero tariffs so have lower prices uh lower import prices so um in order to you know uh compete in this very competitive market you need
Actually to to invest a little bit bit uh not only in terms of money but also in terms of time in terms of uh long-term planning you should um you should have a maybe a longer term Vision rather than just focusing on selling single patches of single containers of
Of China uh marketing and branding are extremely important um some would say that these are even more important than the technical features of the wine um and um I would say that some uh of the elements can be highlighted into into marketing and branding campaigns are you
Know the diversity complexity of of wine but also the linkage of the wine with the territory the history the family traditions uh so Elements which are pretty unique uh to you compared to other countries um the healthy lifestyle of white producers but also how consumers um drink wine what are the
Health benefits for drinking wine um if your wine has been recognized with some award Awards uh International Awards uh highlight this in the promotion because these awards are often very well known in China so um you know if if if a chinese consumer see this award uh they
Will say they will be pretty much impressed by it and also if you sell to other markets um make sure that uh you tell this uh because uh this shows that uh you know your wine is appreciated by in all across the globe geographical indication uh we know there is a an
Agreement between the EU and China and geographical indication wine is the most important category um within this agreement uh there are I think 1/4 of the products in this agreement covered by this agreement are wine and um so um this could be also used um even though
Are some highlight that is a bit more complex than that sometimes it may even confuse Chinese consumers because they might um not be very familiar with the concept of geographical indication so take it carefully but uh certainly something that is very unique to Europe and actually a few weeks ago there was
This legal case of Italian proo uh who which which won a case in China against Australian proo so um this this shows that um um this these kind of agreements could be beneficial um yes uh trade fairs um are very useful of course for meeting importers but um
Uh you should come prepared uh not all trade first might be relevant for you some have uh different focuses some have more professional visitors some have more Curious visitors who are just interested in testing wine without purchasing or so so you should carefully select first and by the way we have um a
Report we are producing a report um in these weeks about uh how to get prepared for trade fs and um and of course you should register your trademark before you even go to China because um um trademark issues uh bad faith registration of trademarks is a very
Common issue in China the last slide I would like to say the reason why we we decided to do this webinar today uh 18 of January is because today is also the day um during which uh the European Union has launched a call um for um a
Funding call basically uh for for for doing promotional activities in third markets for agre food product so there is one agent of the European commission called research executive agency that every year provide funding for doing Agri Agri food promotional campaigns in thir markets including China but of course also other countries around the
World there are different types of programs uh some of them can be done by a single single entity some of them must be done by two or more entities from two countries European member states um the most important thing is that the funding here um doesn’t go to a specific
Company basically to promote the company funding is allocated to Consortium to uh category um to to to Consortium trade organizations to promote the concept of that wine for instance concept of the geographical indication or the benefit the sustainability of U uh production methods or or or things like that of
Course you will also be allowed to to display your product in trade F or in your radio TV advertisements but um the funding this application should be prepared by uh consorti or trade organizations not by single companies single companies can go to their own consorti and invite them to to prepare
An application to this um but uh yeah so uh again today uh the code was published for new proposals and the deadline is pretty short I think is um couple of months here is the link I will also um provide it uh in the chat um there also
More details on this website that you can find so I would end this presentation here and so that we have time for discussion there is um of course if you have any questions write to us anytime and uh that’s pretty much it uh thank you for your attention I will
Now uh of course if you have any questions we have a Q&A later so write them in the chat in the Q&A section um now let’s move into the second part of this webinar where we uh invite the three uh renowned industry professionals to share a little bit their experience
And then after after uh short introductions uh the three speakers uh we will have a panel with with the three speakers where uh they will address questions so let’s start with mik Mr Mikel tetti who is the CEO of a China 2 um company and Mikel has many years of
Experience in um in the Chinese market um thank you Melia the floor is yours okay thank you can you listen yes okay thank you alio good morning and good afternoon to the people everybody uh thanks to alio and USB center for the big job and for the mission you have now for
Making this two Market more closed and more and more assess for everyone um yes I few second I Tred to keep 10 10 minutes is time we have to to to we have to explain our our plan um yes I have experience in the market since 30 years
About and uh mainly promoting the made in Italy products in in China is a kind of experience experience I have also received from my family du my father starting working with China in 1980 and also my grandfather working with China since before Liberation 1946 importing hats STW hats STW braids for
Hats so this is a long tradition and uh what we can I like to make some uh points few points to introduce also our our plan the first one is the considering for about the market Chinese market is changing in a general way not only for wine it’s changing so
Fast and um especially of course as the international market even the the last years for the problem of of pandemic problem and also this the present situation for the war there is another step of changing that make uh different or we should increase the approach of the market and should change the
Mentality um of course also the new social system as other colleague they explain better than me the approach also change the the way to approach of the market but the basic way to approach the market in my opinion never change the to approach the Chinese market the the
Basic point to start is the culture dialogue that is the key point to approach the market if the first point is not based on the culture dialogue probably is difficult especially for our countries to approach the market wine is a a important part of culture dialog wine is the expression of the territory
Of the history of the culture is a good uh is the card of of a country D is the expression of the historical of the historical uh tradition that’s why uh be before to concentrate in the approach in in the technical details or or or even business approach the first key point is
The culture dial to understand the culture of the especially for Chinese culture to present our culture this is the first step to approach the market in a general way is mainly for wine and food and beverage the second step is of of course to have a a correct marketing approach business
Approach so that is we can use the new strategy the new digital marketing but still in China in my opinion still valid the uh personal relationship no to create the personal relationship and to create a good network of relationship and knowledge and giving more confidence to the part
To the consumers so as you explained before very well the created a good image of the brand is the key point and create the the presence of the brand in China is also to explain the origin of the culture the third point is the technical of course
Uh expression to to work with the technical expert that can explain and give more value to the what we are presented of course of course they the product should have a high level quality background now more than before the market now have to uh approach it with
The correct products no no we canot more go ahead with some just uh simple because it’s made in Italy or made in Europe is a way to approach the market now the market want to see the the quality the quality more focus on quality maybe not the quantity but the
Quality they want to see that’s the the key points for approaching the market that we can see in the general way but mainly for wine that is a particular products and very competitors uh Market referring to the Italian wine that is uh is more uh focus on our on
Our research for my especially for myself italan whyne has some uh is suffering in the market because probably have no uh at the beginning not based the approach of the market on this main points I mean of the culture we approach the market especially with the price
With the uh offer looking for quantity that’s at the beginning maybe can be also set but not working in deep of the uh evaluating and give more image about the brand and the origin sometimes in the market we should say no no sometimes it’s better don’t
Don’t go ahead instead of go ahead and give a bad image of the brand of the products that’s sometimes is uh there is some FS that are looking the Chinese taste more than promoting their own and keep stable on their own uh quality and brand so some companies changing the
Label changing the the taste so they lose their original Ruth that is their main point so in that case French of course is make a they open the market of wine know they are more uh Pres in China mainly because they they have working in this
Way creating the the the right the right bridge and connection the cultural way promoting their products and their roots and never change too much their offer if you see the wine CH French wine have always they are they label not white label with a castle with a tradition
They don’t change their Mage they of course they try to to meet The Taste try to meet the strategies but don’t change the product this is the key point in my opinion that is uh another key point of this is of course some strategies that Italian Market have to follow and maybe
Try to copy in this case from other countries more developed like uh approach the market through groups creating some groups Italian Farm are small size not big size usually so go alone is complicate so this kind of activities should be uh developed more so the market is changing in China but
But what we are worri is that still we have to work on education about to Ed to educ at the farm to the producer how to approach the market this is in my opinion is the the weakness part of the market because competitor sometimes are more present more
Aggressive more close to the market that some Italian property producer are not too much so I think my time is ended and so the the my opinion wine is still to be presented at some luxury product that doesn’t meet like luxury like jewelry but the approach should be like
This not for all everyone not for the people but should be presented as a a unique product as the luy we do thank you very much thank you m and I’m sure uh there will be questions which we can discuss in more detail uh during the
Next uh Q&A section so now we move to the second speaker Mr simonini who is a wine educator he’s based in Shanghai and for for many years already so he has um different uh very different uh let’s say insights in how uh promotion Works how the Chinese perceive react to to the
Promotion of of wine thank you Simon for being with us and and the Flor you yours thank you alesio to invite me here I’m very glad and welcome honor to be part of this uh webinar I’m not going to be too long and try to makeing some
Point that for me as you mentioned before and also Mikel mentioned the market changing change very fast very drastically and uh the key point to in order to introduce the Italian wines to the market is to work in as a group that’s for me is the key point is the
Something that maybe sometimes as a small company they are hardly doing this it’s hard for them to work in together for many reason of course for business part and uh I feel like also the Chamber of Commerce is doing a very good job in this in order to make a many partner
Together uh I came in China in 2013 so I wouldn’t say very long time ago but it was a kind of key moment in the change of the wine business in in shangai especially because I always been in Shanghai uh all the respect shangai is not China you know better than me if
You’ve been in China you know shangai is the most International City and also probably the leading City for many for many ideas for many strategy and uh for many changes so when I came here in the beginning it wasn’t there weren’t many Wine Bar many many places selling wine in a
Professional way very few and the wine market in beginning it was a little bit more approach in terms of uh gift as you said that also decreased the quality and the label that I saw here there were most of them ocm or label made uh for the Chinese market but not
Even no in uh in Italy and that LE a little decrease and increase the quality definitely increase the quality so I can see now uh more and more even small wineries coming in and that it shows that the market is becoming much more mature ready and uh I know it’s very hard time
It’s very hard time for everybody but I can still see a bright future for this country in terms of exposure in terms of uh volumes in terms of uh possibility uh so I always try to be positive is the only way especially now is uh uh the beginning of 2024 guys I
Don’t know about you but it’s being very slow we are very close to the Chinese new here so uh we were expecting probably more but in terms of sales is a little bit slow we will see how it’s going to be after Channel the year or maybe on the second part of the
Year um still thinking that Italy is a very huge potential um when I mentioned before also when you see my uh interview uh small introduction I said branding branding for me it means uh also branding as a country nobody branding his own product as good as friends they’re very proud of this
Um and it’s easy to recognize uh champagne Bordeaux burgundi now is probably the most requested for my own client everybody in the Ora asking for burgundy and the price is Skyrocket what it used to be many appellation that not been considered now burgund is getting more and more request
So that also making the price higher uh the identity as Michela mentioned before I feel like uh you need to be more clear about Italian wines in the market so that’s something that we need to working on I wouldn’t say it’s uh my part but everybody part doing this
Identity of Italian wine a different way in terms of quality in terms of U uh knowledge because I feel like the the knowledge of the average consumer Is Not So Sophisticated but is improving I know that many times they are looking for the brand so they’re picking up the familiar faces but they
Also open to discover if on the other side you somebody able to communicate this so the key part is knowledge in the beginning uh for my side I feel like uh making the consumer and who selling wine more aware about the potential and about the quality
The strategy is that that is the that is the road to follow thank you s yes thank you for that and short and and and concise but full of insight um there are there are a few questions in the Q&A box but but uh we we will
Address them later uh very soon now we move to the third uh speaker today who um Mr Franchesco Dil who is a partner of uh pnb Consulting Franchesco has been um has a very long history in the Chinese market especially wine but not only Chinese wine and he’s also one of
Pioneers in using a digital uh platform for for selling one thank you again for being with us today and please the floor is yours thank you thank you very much for inviting me in this um in this event and also for the interview um for your report interesting very interesting
Report I’m um business consultant I work with China since 205 H mostly supporting Italian companies in different Industries to approach Chinese market as well as um Chinese some Chinese companies in approaching European market too starting from 2013 I did start a project with an Italian Winery who are producing organic
Wines and uh I tried to design a quite Innovative approach in in promoting and selling Italian the wine of this wi in China even within the mainstream of the traditional way uh of course focusing to Chinese Distributors Chinese Ora channels and so on but without waiting for ch or
Importer but setting up a company in Shanghai and importing directly the wine in China and then Distributing the wine through our Network in to um Distributors and selling directly to private customers as well as restaurants hotel and so on this traditional way um um was approached by has starting from 2013 till
2019 I have to say quite good uh quite successful but not so much and the main reason was because I was representing only wine Winery even with different labels but um in that time the market mostly focused especially in yica channel was changing the approach because hotel and restaurants were
Asking to the local Distributors not for providing one of two Winery wines or or uh some labels but they were asking more and more for the w w this so where they were asking for some solution and of course I was not in the position to provide for this service
Because I was representing only one only one Winery H with several labels but only one so we were growing a little bit but not not so fast something happened at the beginning of the of the um covid situation just in the first months because I did realize that what was happening in
China and million of Chinese were suffering stay at home without any possibility to move and enjoying uh social life and then I was thinking that this situation could affect in some way the Chinese living behaviors and the of course the Chinese purchasing behaviors and then I immediately decide
To revolutionary my to make a revolution in my business model moving through from the traditional way to online business choosing for online business the social media and especially Tik Tok going Chinese Tik Tok where there were KS with a 100,000 or million followers that could uh talk and
Introduce our wines our product our storytelling to the followers and um I was watching what was happening on online Market with crossborder Market with traditional shops on internet but I was never satisfied about this options because um this model was asking to the Chinese client to have clear idea what to
Buy and this is not the case in most of the situation in China because Chinese the awareness of Chinese customers about International wines Italian wine is not so high so they follow they used to follow what friends on people who they trust used to say and advise them so
Social media and especially doin was playing this kind of role because there are KS there are our influencer who who are trusted by their followers and they are focused on some content where they have power and they have knowledge so in this for this reason they are trustable and then sharing their view
They can talk about you and introduce your product so I choose this way I open a shop using my Chinese company Shanghai I open a shop on doin on the beginning the earliest month of 2020 in two months three months I open the shop and then I upload all our wies
Already registered and already regularly imported in China and then I I find I was very lucky to find one very powerful k at that time he was with 1 million more or less 1 million followers that I preliminary know in the past and he the name is PJ and uh he was
Married with Italian lady and uh was fascinated by the lifestyle of the the family of his wife they are living in the north of Italy up to the mountains nearby nearby CET uh so sharing the lifestyle of the family of his wife he was being perceived as in
Interesting from his followers and then he started to promote the lifestyle of Italy together with some product and we started in this way and then uh my my the business was booming immediately because while the business in Ora Chanel during the co decreased a lot the purchasing for Chinese customer
Uh linked with the home consumption was growing up very very very fast and we were in the best position to to pull of this trend why because selling online ask the supplier different business model comparing the traditional one while in the traditional one it was helpful to have several Brands several countries
Several labels for each brand no then you have few B quantity of bottles for each level on the opposite way selling online you can sell two 3,000 bottle a day this means that you ask for a huge stock of each level and this was the case of our strategy and business model
And we were ready at that time to cover this need with huge stock of each level and then we grow up in this way the main main challenge at the end of this introduction I can say it was to provide the interesting storytelling for dql because dql are people who guarantee for
You they are they have two needs money and Trust so they need to provide trustable content to their followers and then it is up to us to design this content and share with them just an example in the during the covid situation benefit from one period where
In Italy was you in Europe it was easy to travel we did organize the first live stream from the European Winery from pulia and then after a few months we Ed seven eight ches basically Europe to come and visit us in the winery in the same days during
The Harvest time and have live stream from our one sharing the real life sharing the real content of what we do who we are and how we work and it was uh the the powerful value of our proposal and then starting from there that stage we grow
Up grow up grow up and now the next challenge is to increase in terms of number of K of course now we don’t have only one we have several one but having huge number of KS of reasonable number of kls make your business much much more strong and solid in approaching this
Market thanks God in the beginning of the this year I’m not suffering any problem but we are growing up following the our expectation thanks to new events that we have organized yesterday I’ve been in Rome for a live stream with a A Q Bas in Rome last week we hosted other Qs coming
In the winery having two days live stream and it has been very challenging but uh interesting and successful sorry for being little bit late no you are not are you right on time Franchesco thank you very much and actually uh to all the participants if you are interested in in knowing more
About you know this K how do they charge or maybe some tips in working with them um there are more details in the in the case study in the report so also for what the previous speaker said everything is is more uh detailed um expl is explaining more detail in the
Report I would also have to say that Franchesco now has hundreds of thousands of sales uh on their official store on doin and wiat so five stars ratings for Logistics I mean he’s a superstar in the in this field so so he’s a valuable person to learn from so now I will move
Into uh we have different questions already um I will move into a Q&A interactive Q with all the speakers uh there are a few questions in the Q&A chat uh but of course if there are other questions this is the uh your chance to ask them I
Would start with one of the questions um that we have received which I think um it’s very uh some of you mention it um uh maybe maybe maybe I will ask uh all the two speakers to give your um insights so um there is one one person
Who asked that um you know he when when speaking to Wine Professionals in China uh this person often hears that there are two price ranges one is a high price of wine and one is low price of wine and the high price generally corresponds to French wine while the low price
Generally corresponds to Chilean wine um so this person is asking what about the mid range is there you know kind of medium price range or is it something that is just either high or low without the medium what is your um what are your thoughts on this uh maybe we start uh
Yeah who wants to take this just just go ahead Simone I saw you are okay uh middle range average from my customer feedback is between one 100 to 200 200 R&B average all say price because a basic uh what we’re talking about basic is even below this is below 100 this for my
Feedback uh middle uh uh I agree the highest standard the higher price for uh for the French wine and uh Italy has the potential in the section because to reaching the the French Market uh is always more expensive and Italy has more potential in that section for me in terms of
Variety in terms of quality it can be precisely in that Middle Market more than the lower lower talking about bul we’re talking about uh big quantity Italy is supposed to be proper in the Middle Market that is my point of view others want to add something uh otherwise we move to the another
Question okay I like to add I fully agree with Simone uh in my opinion the middle level is the more difficult not to promote because in Italy we are very strong in middle level but almost production is there the range in the farm is from 4 to8 no let’s say in Euro
For for Euro to 80 Euro so the bagar is there the competition is there how to let the consumer select this no Chinese market not easy to display many products and let the Chinese select one or two so that is the key Point low price is natural selection
Is cheap everybody cheap price high level because it’s a Famous Brand everybody can but the medium level is is more difficult that is most meet Market more mature probably I can add a little bit um that middle level like that also good value for money because uh in the early stage um
Chinese were approaching International wine French wine with I price and also good quality nowadays is not more polite to show luxury good for so many reasons that we know but for years people were familiar for testing even espensive wine but good value good quality wines and then
Now they are changing the bit moving to more polite purchasing then they are looking for good value for money Italy for good value for money is number one the point is to make good reasons in introduction our offer of course the market is not ready but I see good perspective in this
Direction because we are quite ready to sell the quality at reasonable price to 200 REM the quality of our wine has really super and then compare even with other countries so I see 20 2050 remb is aming Market in in terms of perspective that is up to us take the challenge and enter
In this segment thank you I have two follow-up questions on this one comes from the chat uh but before that I have a personal question um franisco you mentioned good value for money so they have to see the value so my question is what is the value what uh what do Chinese consumers
Think um is valuable what is the value of of a wi how do they perceive the the the value of way like they get drunk easily or it tastes as well I can share I can share uh the strategy that I follow I don’t used to go in technical issues when I
Introduced the wine I just introduce um basic information about the wine characteristic then I move to the back to the storytelling just for an example no the winery that I work with they produce all organic wine native grapes without Oak without barck and some wines are already internationally awarded so organic
Native grapes without barck make people curious and then I focus on these stories not just to make people curious and ask them to test for the first purchase then if they like of course there is uh a process where they are familiar with buy game buy game in do I
Can say I can say that after about four years experience number of reorders uh customers are about 20% in our in our show in our sh and I think it is very good very good result very good thank you Franchesco uh the other question uh was more
Related because we talk a lot of about Italian one but what about Spanish one there’s a person asking about Spanish what’s the uh you know the the position the recognition of Spanish wine uh in China wants to take this I know you all focus on Italian wine but maybe you also
Know I am not an expert on Spanish wine but for what I can see in the market the perception of many Chinese for the Spanish excluding few top wines is on the middle low quality no quality but middle basic range as a perception I’m not talking
About what is the real value of the wine because many Spanish also in the Spanish market and in the Spanish identity I notice also here in shangai increasing the the variety and the labels the winery coming from Spain but still uh they suffer from a big
Competitor like SP like uh us like Chile for the price like us France of course has a big market so Spain suffer a little bit as we are doing in some way but maybe we a little more potential than them but it’s not up to me to say
This uh yeah I can add um besides some experience I’ve had with some big uh brand in with Spanish uh I think think the Spanish usually have a good uh marketing uh strategy they are more aggressive probably than us you can see for example in olive oil olive oil in
This big distribution is Spanish not only because they offer they have probably quality and price at the moment they ship price for Vol oil but they they have aggressive uh activity but I agree with Simon yeah maybe the the the target the idea of the consumer is of the Spanish wine is not
Like of course French or or Italian or Chile or California there’s not this kind of level okay so so another follow-up question which is even more tricker I would say so uh there is uh this person asking what about wine from other smaller countries we know in Europe
There are many countries that have that have their own wine this person is asking Cyprus but there are also other countries I’m thinking about Bulgaria Slovenia and many countries which produce wine and are actually also present in China what do you think about um you know this these smaller countries why the your
Perceptions who is brave enough to take this question or maybe you can just say what what they can do eventually to to promote their wines I think sorry yeah I think that country sorry thank you country brand could be less strong but it doesn’t mean that they could not comparing with France or
Italy baby or Spain but it doesn’t mean that they cannot approach this Market I think the mostly is related with a kind of differentiation it should be a clear value proposition to share a clear you have to give good reason to Chinese customer to try and test your product no
And this message has to be clear no if you don’t have strong country brand coming from Bordeaux blah blah no you have to find other ways to make Chinese curious about your product and then uh why not yeah I can yeah sorry moment please please no I was just saying briefly I I
Was just comparing recently one example for me South Africa that a few years ago it wasn’t not even on the map uh and now South Africa is very very requested very high popularity but they came here as a big flag allog together as mid middle and small
Producer the however South Africa has a quite a long history in wine production wine production even a very good quality uh but they reached China quite recently uh that for me is an example so it takes time but uh Cyprus can be an example I don’t know coming here in a
Wine Fair attending a wine Fair all together and flag first and all the all the wine behind yeah I I I confirm what I have told before I think because the Approach at the beginning should be based on culture dialogue the expression of the country for special country in Europe
They have tradition in wine as well like say Cyprus or Romania or other wine like for example Georgia is a good wine in in good Market in China uh I think that is the big the first step to start so the typical production uh of the they can have
Market if they have a good approach in the culture dialogue thank you and um so so uh building on this uh I see some questions related to what is the role of national Chambers of Commerce institutions could they do more I would say of course they could always do
More um but we see uh a lot of uh sometimes efforts delegations that fly to to China to canot Trade Fair or or doing spending a lot of money to to work with a k for a live streaming session and but maybe sometimes the results the
Return is not as as good or maybe not as sustainable not as longterm as it could as it is expected so um I don’t know if you have any comments on this on the role of Institutions what they could do more and maybe how they can do it better
Because we also have some participants that come from business trade organizations from uh so it’s not just uh companies so if from your perspective if you have any advice for them uh yeah Following also some uh there is a question I see in the chat not direct to me that is also referring
To your yes point about the institution and uh yeah the institution has a an important role no an important role because when also Simone franisco told about the to approach the market in a group no as a group of companies not only one that is not only for one
Usually but for but one especially so the institution the Consortium uh have to do this one anyway the the institution can can be the the the key point for organized group to select especially to select the quality of the company then there is some expert that select the quality of the products
But first to approach the market the one project the institution can be no the top the head of the of the of the group that is the key Point unless they have some sometime financial support and promotional supports they can help but also for make also selection sometimes
Because Chinese market as a famous penologist uh B told China is not for all all people all companies not all for only those have a clear idea and approach can do the can do can approach China so for the group uh institution has a important position in
Go I I agree very much and it’s also what we try to do as part of our activities the usme center uh China is not for all you should be very you should be very clear about your message but I would also add that you should have
Very uh I would say enough resources and commitment for long-term uh expansion in the market so not just trying it like like like like this so I don’t know if Simon or Franchesco would like to add anything or we move to another question for may we can move to next
Question for my side Francisco sorry okay if institution I can talk about my Channel online if institution can support group of Italian companies no to approach and manage CS promoting not as individual Brands but the the region the country some aspect of our lifestyle producing content useful for K’s to promote
Italy and then make and then leave to the individual company or Consortium the the the the role to sell themselves no this balance can be very helpful in in the online Market nowadays because producing content is not so easy for the individual companies thank you Francesco and I
Would like to take uh this comment to remind you that about the funding opportunity from the European Union which doesn’t needs to be applied by uh trade organizations and consorti but this funding goes exactly for this purpose so it’s rather than promoting a single Winery or single label it
Promotes aspects such as sustainability such as tradition such as linkage to territory aspects like this and um so um you know if you’re interested in this and I think you should get in touch with your consorti with with a piness organization and maybe try to see there’s also funding at the national
Level many countries I know some some e in Italy but also eex in in Spain and other uh other countries also have their own funding so also get in touch with them um we have a few minutes I would go with couple of other questions before um
And in the there is one uh related about Trends so this person is asking um what is uh the impact of new trends in Europe um uh in China so so basically are new trends that are growing in Europe are emerging in Europe to they also occur in China for instance and
This person gives the example of uh natural wine or orange wines which are growing uh especially among young consumers do you see the same in China and uh or maybe do you see that the two countries are disconnected in terms of Trends I can start shangai is in shangai is a big
Booming about natural wine uh is very big booming uh I request even even the local producer many producer from China they’re doing in uh now organic or not even organic probably natural why that uh in some way for a new market like China for the Young Generation that
They are kind of uh always looking for something new because the natural one is totally out of the well it’s literally completely different than the standard wine as we know uh and uh I can see a lot of request uh I don’t know how long it will
Be this wave that’s something that I don’t know I don’t know how long it’s going to keep the the fashion and the request because already some of my client they are moving back to more nor classic wine maybe biodynamic that is not natural just to don’t be
Confused uh and uh something that is a little bit more standard wine than the natural that is my feedback others I I agree the when you approach the market also the producer should have something different not to others something to make some also to catch the interestes of the consumer
Of the distributor maybe you present the company as organic production or natural wine or other no alcohol wine but maybe later you sell the the regular wine no but the the way to approach in the communication is that this company this producer has a kind of research no is a kind of new
Products H you know in China is also wine is combined with healthy China everything is a health you know is is is a good approach so that is Al the key should be also marketing key to open the market maybe you sell the the the
The basic one or the other one the other people selling but how to make the brand more interesting and uh unique this is also a marketing strategy very good yes I can say that from our side promoting during the video live stream the label of the green organic label on the
Back label of the bottles is the more important um uh message that we give in promoting our wine and it is the mostly well perceived from the customers very good and if I may add there very more comments uh orange wine I remember I was living in in Beijing
Until a little bit more than one year ago um and I remember orange wine it was growing a little bit there were some bars focusing only on orange wine and selling a 350 400 rimi per bottle actually so also pretty expensive yes not cheap not cheap yeah and and there
There also some countries such as Georgia aeran so not just uh of course Italy as well I think I don’t remember all this but but um it was uh interesting to to see that and there was there were a couple of bars um so now um I would take only the last
Question which is a more kind of um to end this discussion about okay so what um so we have seen uh Imports consumption were are decreasing a little bit at least in terms of numbers um we also know that the consumption the economy in China is uh a bit below
Expectations let’s say Chinese consumers are more careful in how they spend their money so um given this uh against this spectr uh given this context what do you think um what do you think European wine producers should uh should do and uh what’s uh what could be an approach a
Strategy that they can use to you know to to to uh into this uh during this period and maybe what actions that can be done there was also another question which was not answered about um you know okay how can I promote this uh uh how
Can I pass this message so maybe one or two minutes each who wants to start okay uh so I think yes qualtity is decreasing but not only because the problem of the covid or war or other or economy probably was a trend already started um because the market is
Readjusting Market is readjusting for some way as also Simone and franisco say the market in some big city the big city make the market the main Market in China no but this probably is not the real Market no because the market in China is very big and the market probably should be
Developed in the medium and small City that need to be educated and we can educate in the quality not the quantity in my opinion especially for the European producer is for that has middle uh small Med Enterprise should be focused on Quality quality and education I suggest also to educate the producer
Not only the market because in my opinion the weakness part are the producer that should be educated because the consumer the consumer in China are ready to be educated study they like to travel like franisco say they want to visit the farm taste though they are ready to study to
Approach sometimes we don’t find the same willing from the producer not interest to fly to China educate and explain probably because they have a a good attitude to wait the buyer in the especially some region like TOS Veno to Amilia where the buyer like tourist no they have a good market so
They’re not more internationalized as should be probably but this is a point by the way the market should be uh approached in this way educated quality follow the expert technical expert and marketing expert thank you m Franchesco Simone want to add us anything or but we did suffer this
Year um a decrease in terms of consumption mostly related with more expensive wine H in terms of quantity we did not suffer H but the mix of purchases was moving from more at cost to cheaper one um mostly in the beginning of 2023 the first five six months in the second
Part we have seen something of different coming back to the normal interest for good wines and also expensive wine too and this during this Chinese New Year we have sold a lot of top range products of of our product list so again uh people need to be curious
And approach your product if they have good reason to do that so following what our colleague already said is it up to the producer to introduce in the best way our products and our companies and make their purchase interesting for their experience testing experience thank you Francisco uh I agree with Francisco the
The key point is the communication the communication of the from the producer to the market and uh find the the right target um I was reading a famous book probably about marketing and uh everything started from why so why you choosing my wine why you choosing my product Simon cic is a
Leader on this I mean you need to start to thinking why you choosing my S or my bar instead of yours you need to give a history you need to give a a full package that’s for me is one of the key of the communication one of the want to
Start to thinking about uh more than how why and then you’re building everything behind that thank you Simone and and this is a very important uh consideration so before the how and when and I think the why is is even more fundamental is the basic so
Thanks uh to Francesco Simon M for your insights um again many of these uh many of these uh comments ins sites uh have also are also including the report uh we advise you to download the report which is free you will find also some screenshots from uh
From um concrete activities in the slide that you see here there’s a QR code uh it leads to um a short survey we would really appreciate if you could take one minute of your time to to to fill it and also maybe eventually uh propose some
Topics uh that we could on which we could do other events in the future um some question there are still some question in Q&A unfortunately we don’t have time to answer all of them but I invite you to contact us to to maybe um yes to write to us uh with these
Questions we will try to provide uh an answer to to this question here you see the address so um also final reminder we are going to circulate the slides of this event uh but also the recording of This webinar is going to be published on a website uh your personal information
Will not be uh published anywhere so it’s and um and that’s it I think uh it was a very interesting discussion men inside these are our socials uh you can follow uh this accounts for for for for being up to date with our event uh actually we
Have more we also have another event tomorrow on Cosmetics if if any of you is interested in cosmetics um but we also have other on trade fairs and and many other upcoming so follow us please and um yeah I think uh that’s it uh thanks uh thank you all for your
Participation thanks to the Italian chamber for your support in this uh thanks to the speakers for your insights and I’ll see you next time