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China’s rapidly growing wine market goes digital

China’s rapidly growing wine market goes digital article image

Wine buyers in China are getting more discerning about how and where they buy their favourite drop. 

With an estimated half a billion mobile internet users, more buyers are preferring to buy online rather than at a liquor store. 

According to Tech In Asia, Jiuxian, one of China’s largest wine specialist e-commerce sites, has secured 420 million yuan ($69 million) in new funding this year to take advantage of the new trend. 

Jiuxian sells red and white wines, champagnes and spirits from around the world. 

The new funding follows news that China has overtaken France to become the world’s biggest consumer of red wine. 

The rise of online wine sales is tied to China’s rapidly rising mobile internet penetration. 

According to recent figures from the China Internet Network Information Centre (CNNIC), 500 million of its 618 million internet users (about 80 percent) access the internet via mobile devices. 

The growth of Jiuxian and online wine sales in China defies expert predictions. 

Distribution centres 

In 2009, the CEO of international wine exhibition VINEXPO Robert Beynat dismissed the Internet as a viable platform for selling wine. 

“It is not a circuit for wine sales, the Internet will always be marginal, and it will stay that way,” said Beynat at the exhibition in Bordeaux, predicting that online wine sales will top 8 percent of global sales at most. 

However, online wine sales in China last year accounted for about 27 percent of total sales, according to estimates from France-based Bordeaux Management School. 

Jiuxian president Hao Hongfeng told Chinese tech news site Tech QQ the company now has distribution centres in Beijing, Shanghai, Guangzhou, Tianjin, and Wuhan, and cover 2,000 Chinese cities and counties. 

The latest fundraiser aims to set up distribution centres in every provincial capital in the next few years in order to speed up delivery. 

Not only are Chinese wine merchants peddling their wares online, but foreign merchants are also looking toward China’s internet marketplace as they become aware of the trend. 

All-time high 

Amazon began offering Californian wines through its Chinese portal last year, according to China Daily

The article reports that Californian wine exports to China hit an all-time high of $35 million last year. 

China is now the fifth-largest export market for Californian vignerons, according to Linsey Gallagher, vice president of the Wine Institute, a Californian wine advocacy group. 

These days, Beynat is singing a different tune regarding online wine sales. “We will probably see corner stores disappear eventually,” Beynat told Reuters. 

Big opportunities 

Beynat says brick-and-mortar wine stores are in decline everywhere except China. 

According to VINEXPO, the rise of wine e-tailers in China is just getting started. 

In a 2013 report, the organization predicted that online wine sales in China will grow by 47 percent by 2020. 

This will provide big opportunities for Australian wine producers in coming years.

Wine imports from Australia grew by nearly 150 percent from 2007-2012, according latest figures, with demand particularly strong for premium Australian wines. 

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