Matthew Deller MW reports from Shanghai after five days immersed in the market, including three days at ProWein Shanghai.
The experience has provided a clear, if challenging, picture of where the China wine market stands in 2024.
Right now, it’s evident that we’re in uncharted territory.
The market is at a low point, distributors are heavily overstocked, and Australia’s re-entry has proven to be more of a disruption than a demand-driven event.
Distributors, already struggling with surplus inventory, now face the added complexity of potentially accommodating Australian wines, yet without clear consumer pull to justify it.
The anticipated enthusiasm for Australian wine has not materialised as expected.
Traditional demand drivers – corporate gifting and entertaining, restaurant trade, and casual consumer purchases – have stalled, compounded by a turbulent economic backdrop.
China’s recent real estate downturn has severely impacted consumer confidence and spending capacity, with many investors questioning the value of their assets.
As a result, everyday Chinese consumers are being far more cautious with their discretionary spending, impacting non-essential categories like wine.
Yet, there’s a noticeable shift among younger consumers, who are starting to turn away from traditional Chinese spirits like Baijiu and show curiosity about wine.
For Australian wine, this is both a new opportunity and a significant challenge.
We’re not returning to a market that’s been holding out for our re-entry.
Instead, we’re entering a fundamentally different landscape, one that requires a renewed approach to building consumer loyalty and trust from scratch.
Interestingly, there’s an increased preference for lighter, fresher wines that convey a strong sense of place, coupled with an emphasis on sustainability and storytelling.
Younger Chinese consumers are drawn to these attributes, especially as they seek products that align with personal values and are open to trying something different from the choices of previous generations.
This shift presents a significant opportunity for Australian producers who are prepared to engage with these emerging consumer demands.
However, this will take more than traditional distribution and marketing; success will come to those willing to invest in creating approachable, engaging wine experiences that resonate with this new audience.
For the Australian wine industry as a whole, the way forward in China will require a long-term view.
Our brands must be ready to rebuild consumer loyalty from the ground up, meeting the market on its terms rather than relying on pre-existing momentum.
China is open to new experiences, but it will take fresh thinking, patience, and adaptability to establish Australian wine as a valued and enduring choice among the next generation of Chinese consumers.
Matthew Deller MW is CEO of Wirra Wirra in McLaren Vale.
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