NEWS
CHINA'S IMPORTED WINE MARKET SLUMP AMID LOCKDOWN MEASURES
By Tony Zhu
18-4-2022
Credit: Jida Li/Unsplash
China’s imported wine market has dropped substantially since the Chinese New Year due to lingering coronavirus outbreaks which led some major cities including Shanghai and Shenzhen go into lockdown.
The Global Times newspaper quoted a Guangzhou-based wine merchant as estimating that the drop in imported wine volume in the past two months amount to some 50 percent year-on-year, mostly due to logistic disruptions posed by the sporadic outbreaks of COVID-19, tightened cash flow and shrinking consumer demand.
The pandemic control measures on transport of goods had caused rising uncertainty for wine merchants, especially in Shanghai and the coastal regions where affluent Chinese consumers made up the bulk of wine lovers in the country.
"The people in the Yangtze-River Delta, and in Shanghai city in particular, are prime consumers of imported wine, accounting for at least 30 percent of our market segmentation," said the Guangzhou wine merchant.
Late or suspended delivery in the region has made it difficult for the wine products to reach consumers lately, he added.
Huo Xingsan of the China Alcoholic Drinks Association said some wine merchants are so frustrated that they decided to leave the trade.
"The ongoing epidemic situation in China is one catalyst for the shrinking market demand, but it is not the only reason, other factors including inadequate inventories of imported wine have also contributed to the waning trend," Huo said.
In 2021, China imported a total of 427 million litres of grape wine, a year-on-year decrease of 1.4 percent, data from the General Administration of Customs revealed.
Meanwhile, the number of imported wine business operators dropped from 8,181 in 2018 to 7,920 in 2019, industry outlet Wine Business Observation reported, adding that although figures for 2020 and 2021 were not released, several industry insiders believed the decline would be even greater, possibly hitting 20 percent.
Market analysts said that Chinese wine consumers now have more options as domestic wine producers have cranked up production and investment, making domestic wine brands more competitive.
Analysts also pointed out that Chinese wine consumers are now expecting more from imported wines, leaving the lower end of the market in less demand.
They believe that the lower end segment of China’s imported wine market will continue to decline even after the pandemic.
(the writer can be contacted at: info@thewinechronicle.com)
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