"Huaxia Liquor News" reporter Xu Feiyuan Huaxia Liquor News
For more than a decade, Three Years in Shanghai's former French Concession has been a bar for people to relax with a few drinks. Founder Leon Liang hosts tastings to educate drinkers from the emerging upper-middle-class class.
However, during the pandemic, as business took a severe hit, Liang turned it into a wine specialty store where people could buy alcohol to take home or drink at parties. "When we ran the bar in 2021, we were able to sell about 1,500 bottles a month, but now we sell more than 3,500 bottles a month. Liang said.
In China, wine sellers are having a hard time, even before the pandemic. Wine consumption has been declining for the past six years. 40% of the wine consumed in China is domestically produced, so imported wine occupies an important position. According to the Liquor Importers and Exporters Branch (CAWS) of the China Chamber of Commerce for Import and Export of Foodstuffs, Native Produce and Animal Husbandry, wine imports in 2023 will only be one-third of what they were in 2017, and the import value will drop by about 60% to US$1.2 billion.
What was once a bar was converted into a wine store after the pandemic
Some industry insiders say wine sales in China are slowing down after years of explosive growth.
"The Chinese wine market really started to develop in 2001, when China joined the WTO. After that, the wine import duty was reduced from 65% to 14% in 3 years. "As a result, from 2004, wines, especially imported wines, entered a period of rapid growth until 2017." ”
At a major annual wine show in Shanghai last November, wine suppliers described the initial period of growth as "crazy".
Australian wine exporter Vikas Gupta at the wine show
Vikas Gupta, an Australian wine exporter, said: "I'm just a small businessman, but I've sold so much wine that I haven't had time to go home for 30 days. Since 2008, he has been participating in wine exhibitions in China.
Since the pandemic, Gupta's sales have fallen by 70%. "In the wake of the pandemic, consumption has changed. "I think people don't want to spend money on wine anymore." ”
He also blamed the decline in sales in part on China's crowded wine market.
"Consumers are lost, you walk around the show and there are two or three hundred thousand wine products to choose from. In response, he is expanding his product line while selling Scotch whisky.
"The liquor here is for business, and the company gives it as a gift to its customers. Sebastien Carreau, a seventh-generation winemaker at Vignobles Carreau Selection in France, said, "If you're not in business, you don't have to give away. ”
法国加罗家族酒庄第七代酿酒师Sebastien Carreau
Sales of his wine in China are only 40% of what they were in 2019. Carreau is working to diversify his market, with an eye on the United States and Europe.
He said the wine market was susceptible to trade relations. In 2020, China launched an anti-dumping investigation against Australia, raising tariffs on Australian wine to up to 200%. "In 2021 and 2022, sales of Australian wine in China fell sharply. "China lifted punitive tariffs last month.
U.S. wine exports to China have also been affected due to ongoing trade tensions. According to CAWS, U.S. wine exports to China in 2023 will be $51 million, down about one-third from 2017.
Liang said he doesn't have an American brand in his store because distribution costs are too high. In addition to tariff reasons, the production cost of American wine is also relatively high.
"For higher-quality wines, such as Cabernet Sauvignon from California's Napa Valley, they usually cost around US$40 to US$70 (RMB300 to RMB500). In contrast, its retail price is much higher than some of the popular French and Italian wines he sells.
But even so, Yin argues, producers and sellers have reason to be hopeful about wine sales in China, which remains one of the world's top 10 wine consumers.
"Wine accounts for only 2% of China's alcoholic beverage market. In China, Yin said, people prefer to drink beer and domestic baijiu. "China is still largely an untapped wine market with a lot of potential for expansion. ”
Moldovan wine merchant Abdukhalilov Rysbek imports wine from his homeland to China.
"We want to enter the Chinese market, mainly because of the war in Ukraine. We used to be able to sell 15 million bottles of wine a year to Russia and Ukraine. As soon as the war began, we lost two markets. He said from his booth at a trade show.
Even NBA star James Harden is bullish on China, launching his wine brand, J-Harden, in China.
Last summer, he appeared in the live broadcast room of the Internet celebrity "Crazy Brother Yang" to promote his brand wine. Unexpectedly, 10,000 bottles of red wine were sold out in a matter of seconds, and Harden was shocked by the purchasing power of Chinese consumers and flipped on the spot to celebrate.
But Liang believes that his success may come more from the traffic of "Crazy Little Yang". "If I had to send Harden to another lesser-known live broadcast room, I don't think it would have generated such high sales. ”
Liang says it's hard to get a good profit margin by selling wine online. Instead, he pinned his hopes on brick-and-mortar stores. He has just opened his third branch in Shanghai, which has a lot of mid-range restaurants. "The wine list in all restaurants was poor. Liang said.
He estimates that if diners see his restaurant and hear that he has won a blind tasting competition in China five times, they may pay 300 yuan to buy a bottle from him and take it to the restaurant. Many restaurants in Shanghai don't charge extra for bringing your own drinks.
Liang also opened a wine shop in Chongqing, but the residents there were not as spending-savvy as Shanghainese, and he planned to make inroads into the eastern Chinese city of Hangzhou.
"I think the Chinese market is recovering. "More and more people are still drinking wine. They are looking for good wine at a good price. (Compiled by reporter Xu Feiyuan, the pictures and texts are all from Marketplace)