Guide to Export Australian Wines to China

(2024 updates) China has decided to remove punitive tariffs on Australian wine, signaling a significant thaw in the previously frosty diplomatic relations between Beijing and Canberra. Here are the key points summarizing this development:

• Removal of Tariffs: Starting Friday, March 29, 2024, China will lift the 218% tariffs previously imposed on Australian wine, as announced by Australian Prime Minister Anthony Albanese.Diplomatic Thaw: The removal of tariffs follows improved relations between Australia and China, which deteriorated after Australia excluded Huawei from its next-gen network developments and called for a COVID-19 origin inquiry.Economic Impact: Before the tariffs, China was the largest market for Australian wine, accounting for 40% of Australia’s wine exports. The tariffs led to a drastic 97% drop in exports to China by the end of 2021, compelling Wine Australia to close its Shanghai office.Government Statements: Australian leaders praised the decision, noting it came at a critical time for the industry and highlighted the benefits for both Australian wine producers and Chinese consumers.Market Re-entry: Treasury Wine Estates and Accolade Wines, major players in the industry, expressed optimism about re-entering the Chinese market, though they cautioned that trading levels might not immediately return to those of 2020.Ongoing Efforts: The Australian government acknowledged the fortitude of its grape growers and wine producers during the tariff period and expressed gratitude for their support.

This positive development marks a pivotal moment for the Australian wine industry, potentially revitalizing its exports to a major market and enhancing bilateral trade relations between the two countries.

Australian wine has been gaining popularity in China in recent years. With its unique blend of fruity and complex flavors, Australian wine has captured the attention of wine enthusiasts and casual drinkers alike.

In fact, China has become one of the largest importers of Australian wine, with many Chinese consumers appreciating the high quality and affordability of these wines. As the demand for Australian wine continues to grow in China, many winemakers are working to create new and innovative blends that appeal to Chinese tastes.

Overview of the Chinese Wine Market

The Chinese wine market has been rapidly growing in recent years, making it one of the most important markets for wine producers worldwide. According to research, China is now the world’s fifth-largest wine consumer, with a market value of around $21 billion.

The Chinese market is dominated by red wines, which account for more than 80% of the total wine consumption. This preference for red wine is due to cultural beliefs that red is a lucky color and symbolizes good fortune. However, white wine and sparkling wine are also becoming increasingly popular among the younger generation.

The demand for wine in China is driven by the growing middle class, who are becoming more interested in wine as a status symbol and a luxury product. Additionally, the government’s anti-corruption campaign has led to a decline in the consumption of high-end spirits, leading to an increase in the demand for wine.

International wine producers are taking advantage of this growing market by investing in Chinese vineyards and partnering with local distributors. French wines are particularly popular in China, with Bordeaux being the most sought-after region. However, Australian, Chilean, and American wines are also gaining popularity.

Wine consumers in China

According to a study, in 2022, the Chinese population consumed approximately 0.88 billion liters of wine. Revenue in the Wine market amounts to US$27.17bn in 2023. The market is expected to grow annually by 3.93%.

The volume of wine is expected to amount to 1,779.00 mL by 2027. The Wine market is expected to show a volume growth of 1.8% in 2024.

The average volume per person in the Wine market is expected to amount to 1.14L in 2023.

Why Australian wine is popular in China? 

Australia is one of the largest exporters of wine in the world and China is one of its biggest markets. In recent years, the demand for Australian wine in China has been increasing rapidly due to its quality and affordability.

The value of Australian wine exports to China reached $318 million in 2023. This growth was driven by strong demand for premium Australian wines, particularly red wines.

There are several reasons why Australian wine is popular in China. Firstly, Australian wine is generally considered to be of high quality and is produced using modern winemaking techniques.

Secondly, Australia has a favorable climate for growing grapes, which allows for the production of a wide variety of wines. Additionally, Australian winemakers have been actively promoting their products in China, which has helped to increase awareness and demand for Australian wines.

Finally, the growing middle class in China has led to an increase in demand for luxury goods, including wine, and Australian wines are seen as a high-end product in the Chinese market.

According to the Australian Grape Bureau, the export of Australian wines to China has achieved extraordinary results over the past decade.

Evolution

The export of Australian wines to China has seen significant growth in recent years. Today, China is Australia’s largest wine export market by value, accounting for more than 39% of total wine exports. 

In 2018, China imposed anti-dumping tariffs on Australian bottled wine, which affected exports from some of Australia’s largest wine producers. These tariffs were lifted in 2019, but the industry continues to face other trade barriers, such as high tariffs on bulk wine and regulatory hurdles.

Despite these challenges, the Australian wine industry remains optimistic about the potential of the Chinese market. The industry is investing in education and promotion efforts to build awareness and appreciation of Australian wines among Chinese consumers.

Additionally, the recent signing of the China-Australia Free Trade Agreement is expected to provide further opportunities for growth in the wine trade between the two countries.

Renowned Australian wines in China

Some of the most popular Australian wines in China include Penfolds, Yellow Tail, Wolf Blass and Rawson’s Retreat already enjoy great fame in China.

These wines are known for their rich and complex flavors and are often paired with a variety of Chinese dishes.

How to adapt your products to the Chinese market?

Australian winemakers can localize their products to the Chinese market by understanding the preferences and tastes of Chinese consumers. This includes considering factors such as the sweetness level, the color of the wine, and the label design.

Additionally, Australian winemakers may want to consider partnering with local distributors or retailers who have a strong understanding of the Chinese market and can help with marketing and distribution efforts.

It’s also important to comply with Chinese regulations and obtain the necessary certifications for exporting wine to China.

For example, Penfolds has been operating in China for over 20 years and has adapted its products to suit Chinese tastes and preferences. They have created a special range of wines specifically for the Chinese market, including a red wine called “Bin 9” that is said to pair well with Chinese cuisine. They also have Chinese-speaking staff to cater to their Chinese customers and have even incorporated Chinese cultural elements into their branding and marketing.

Digital Marketing and E-commerce 

Australian wine has been gaining popularity in China in recent years, and this trend has been reflected in Chinese social media. Chinese consumers are increasingly turning to social media platforms like WeChat, Red, and Douyin (also known as TikTok) to learn about and purchase Australian wines.

Using Little Red Book (Xiaohongshu) and Douyin effectively can revolutionize the way wine brands engage with Chinese consumers. Here’s a comprehensive strategy on how to leverage these platforms to promote wine in China:

Utilizing Little Red Book (Xiaohongshu):

1. Content Creation: Create visually appealing posts that showcase your wine’s unique aspects, such as the vineyard, harvesting process, bottling, and tasting notes. Emphasize the story behind the wine to connect with users on an emotional level.

2. User Reviews and UGC: Encourage customers to post their own experiences and reviews about your wines. User-generated content (UGC) is highly trusted on Xiaohongshu and can significantly influence purchasing decisions.

3. Influencer Collaborations: Partner with lifestyle and food influencers on Xiaohongshu to reach a broader audience. Influencers can create themed content around your wine, such as pairing it with different cuisines, hosting wine tasting parties, or showcasing visits to your vineyard.

4. Educational Content: Post educational content that helps consumers understand wine better. This can include the basics of wine tasting, differences between wine varieties, and tips on storing and serving wine.

5. Exclusive Offers: Use Xiaohongshu to offer exclusive promotions or limited-edition releases. This can create buzz and encourage users to make impulse purchases through the app’s integrated e-commerce features.

Leveraging Douyin (Tiktok):

1. Engaging Videos: Produce short, engaging videos that highlight the sensory experience of your wine. Show clips of the wine being poured, the rich color in the glass, and people enjoying the wine in various settings.

2. Live Streaming Sessions: Host live sessions where you taste wines, discuss pairings, and answer questions from the audience. This direct interaction can boost engagement and drive sales, especially if viewers can purchase the wine directly through Douyin during the livestream.

3. Behind-the-Scenes Content: Share behind-the-scenes content from your vineyards and production processes. This transparency can build trust and deepen consumer interest in the craftsmanship behind your wines.

4. Challenge Campaigns: Initiate fun challenges or contests that encourage users to create their own wine-related content, such as “Best Wine Toast” or “Creative Wine Pairings”. This can increase visibility and engagement across the platform.

5. Celebrity Endorsements: If budget allows, partnering with a celebrity to endorse your wine can dramatically increase visibility. When a popular figure shares your wine on Douyin, it can lead to viral trends and significant brand exposure.

By integrating these strategies on Xiaohongshu and Douyin, wine brands can effectively tap into the vast and growing market of Chinese digital consumers. These platforms offer powerful tools for storytelling, direct sales, and customer engagement, making them ideal for promoting unique and high-quality wines to a discerning audience.

 

On these platforms, Australian wine brands are leveraging influencer marketing and user-generated content to engage with Chinese consumers.

 

 

For example, some Australian wine brands are partnering with Chinese wine bloggers and KOLs (Key Opinion Leaders) to promote their products to their followers. Other brands are running social media campaigns that encourage users to share photos and reviews of their Australian wine experiences.

In addition to social media, Australian wine brands are also using e-commerce platforms like Tmall and JD.com to sell their products directly to Chinese consumers. These platforms have become increasingly popular among Chinese consumers who are looking for high-quality imported products.

Furthermore, these platforms allow Australian winemakers to sell their products directly to Chinese consumers without the need for a physical presence in China.

Case Studies

In recent years, Australian wine has been gaining popularity in China. This success is due in part to a number of factors, including the quality of Australian wine and the growing middle class in China with a taste for luxury goods.

One Australian winery that has successfully navigated the Chinese market is Penfolds. Penfolds has been selling wine in China for over 20 years and has built a strong reputation for quality and consistency. In 2019, Penfolds released a limited edition wine, the 2016 Grange, exclusively for the Chinese market. The wine was priced at 19,999 yuan ($2,800) per bottle and sold out within minutes of its release.

Penfolds has also been successful in marketing its wine to Chinese consumers. The winery has partnered with Chinese e-commerce giant Alibaba to sell its wine online, and has also launched a WeChat mini-program to engage with consumers and offer personalized wine recommendations.

Another Australian winery that has seen success in China is Yalumba. Yalumba has been exporting wine to China since 2006 and has built a strong reputation for its Shiraz and Cabernet Sauvignon. In 2019, Yalumba launched a new wine, the Y Series Shiraz Viognier, specifically for the Chinese market. The wine was designed to appeal to Chinese consumers’ taste for bold, fruity red wines.

Overall, Australian wineries have been successful in the Chinese market by focusing on quality, consistency, and targeted marketing. As the Chinese middle class continues to grow and demand for luxury goods increases, Australian wine is poised to continue its success in China.

We are your local partner in China!

In the Chinese market, Australian wine has shown a relatively stable performance. Sales and market share of Australian wine in China have been growing, but the competition in the Chinese market is also becoming increasingly fierce.

The success of Australian wine in the Chinese market is partly due to its high quality and diversity.

However, as Chinese consumers become more brand and culture-oriented, Australian wine needs to work harder to promote its brand and culture to maintain its position in the Chinese market.

We are a China-based marketing agency offering cost-effective solutions to foreign brands interested in tapping into the Chinese market. Our team of Chinese and foreign experts has the experience and know-how needed to succeed in this lucrative, yet complicated market.

Gentlemen Marketing Agency offers many digital marketing and e-commerce solutions, such as web design, e-commerce and social media marketing strategies, localization, market research, KOL marketing, and more.

Don’t hesitate to leave us a comment or contact us, so that we can schedule a free consultation with one of our experts, that will learn about your brand and present you the best solutions for your China market strategy.