Wine vs. Champagne in China
Many Chinese recognize Lafite as one of the most expensive red wines, but they struggle to name the best champagne in the world.
In China, the red wine market is booming; owning prestigious wine has become symonymous with wealth and social status. However, champagne, which has been associated with luxury and power for centuries in the West, has yet to receive such recognition and acceptance in the East.
“Compared with red wine, the acceptance of champagne is still limited,” said Wang Wei, Director of the Comit Interprofessionnel du Vin de Champagne (CIVC) in China. CIVC is the trade organization of champagne in France that oversees the global champagne market. Its main mission in China is to promote champagne by telling the story behind it to the Chinese.
Officially introduced to the Chinese market in 2006, the demand for champagne has been increasing at a very gradual pace. Out of 300 million bottles produced annually, only 1.3 million bottles were sold in China in 2012, an increase from the 300,000 bottles sold in 2006. About half of the demand comes from Shanghai. Consulting firm Euromonitor reports that 900,000 liters of champagne were consumed in China in 2011, compared to 1.3 million liters of red wine consumed.
There are three main reasons for the slower adoption of champagne in China.
Champagne may not be quite suitable for the Chinese palate. “Chinese people do not like the acidic taste of champagne. They also do not like wine with bubbles in it,” said Vance Yang, champagne master with Le Sun Chine in Shanghai. The Chinese also do not tend to like cold beverages. A market insider said that one way to make champagne’s taste more acceptable for Chinese consumers is to add syrup to reduce the acidity, which is providing big business opportunities for syrup manufacturers, including France based premium syrup maker Monin.
Champagne is much newer to the Chinese than red wine and its received perception is not yet mature. “Red wine entered the Chinese market early and people are more familiar with it. Drinking red wine is trendy nowadays,” said Federico Tabja, Chile’s trade commissioner. “In Western countries, champagne is consumed before meals. However, in China, on the rare occasions champagne is needed, most is drunk in bars and clubs,” added Wang.
Finally, the different trading policies between wine and champagne also limits champagne’s popularity. “Compared with the massive trading model employed by red wine traders, champagne producers and traders want to maintain the premium nature of the wine,” said Wang. “The price of red wine can fall extremely low. However, the price of champagne will have a bottom line.” The cheapest bottle of champagne in an ordinary store in China is as high as 500 rmb (US$80.26). The price will be much higher in bars and clubs. Whereas only 50 rmb will suffice for a cheap bottle of red wine.
As with all luxury products, successful marketing campaigns and consumer education can boost champagne’s image in China. “We have seen significant growth in the champagne market in the past six years and we have high expectations for the market. We want demand in the Chinese market to be as high as it is in Japan,” said Wang. Japan is currently the largest champagne market in Asia.
photo credit: thedrinksbusiness.com