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Canadian Wines and China's Burgeoning Market

September 1, 2011

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Recently, the ATS has noticed a significant increase in attention to the Canadian wine industry in the media and in the agriculture industry itself. The ATS has responded by providing our clients with as much up-to-date information as possible including our recent report on The Wine Market in China:Opportunities for Canadian Wine Exporters as well as previous blog posts such as Virtual Wineries: Canada's model for the future? Therefore ATS jumped at the opportunity when we were contacted by a company, Web Presence in China, who offered to provide us with insight into the wine market in China and the potential that the Chinese market holds for Canadian wine exporters. Web Presence in China is a team of professionals based in Beijing with a Canadian branch which facilitates business opportunities with Chinese customers. The company focuses on China SEO, marketing to China, and writing and translating content. Below is Web Presence in China's take on the scope of the Chinese wine market for Canadian vintners.

The Perfect Storm: Canadian wines and China's burgeoning market

The convergence of two factors - Canada's wave of wineries going virtual and China's burgeoning wine market - could combine for a perfect storm of wine exports. Those who navigate with skill should see record volumes of their product reaching Chinese shores.

Many Canadian vintners are aware of the potential of the Chinese wine market, but perhaps not as clear on its scope. Although Canadian wine exports to China almost quadrupled from 2007 to 2010, from $2.5 to $10 million, the market itself was $10 billion in 2009. Australia and New Zealand took just over a modest one percent of that year's revenues, for a total of $112 million.

With Datamonitor projecting the China wine market to double to $20 billion by 2015, Canadian vintners, virtual or otherwise, can confidently aim at revenues to at least rival Australia and New Zealand's by then. Why? Like New Zealand, Canada enjoys a wide and ingrained reputation in China for cleanliness, high standards, and long-standing Sino friendship. Unlike New Zealand, Canada has a virtual brand monopoly on ice wine and late-harvest wines in China. Instructive, therefore, to consider that New Zealand maintains a strict quality-over-quantity pricing model, selling nothing in China for under 200 RMB per bottle.

Of course, a thousand rocky shoals lie between the Canadian wine exporter and his ever-growing Chinese consumer base. The time, cost, and red-tape of setting up physically in China are proverbial, and should only be braved by those deep of both pocket and patience. Even so, the other traditional model of finding Chinese partners to set up distribution takes considerable time, money, and micromanagement, otherwise the net result is most often a muddied brand (think “conflict of interest”), stalled logistics, and poor sales. Add to that frequent allegations of Chinese entrepreneurs diluting wines and copycatting the labels for short-term profit, and the Canadian vintner has a formidable voyage to the Chinese customer ahead of him.

Ironically, that voyage can be avoided entirely, for those vintners ready to embrace the Internet as the exponentially leveraged marketing tool that it is. A Canadian wine brand that properly localizes its site for the Chinese customer, and then markets it correctly online, creates a Chinese shop that brings customers from all over China to it, rather than negotiating the endless middleman obstacles that a physical presence necessitates.

Can a web presence in China be as effective as a physical presence? Much more so, in fact. Consider the time and effort it would take to get a Canadian wine on the shelves of one hundred retail wine vendors in first-tier cities in China. Consider how many of the customers in each store will choose that wine, given no sales support other than labeling.

Now consider a comprehensive web presence for a Canadian wine brand, with links, articles, and other cannily-promoted content pulling however many of the 460 million Chinese online every day, across all of China, who are interested in wine, to that brand's site. The site educates readers about the eco-friendly, highest-standard production of its offerings, and why they should never buy a bottle of “Canadian Ice Wine” for three dollars. Better yet, that reader can make a purchase directly from the site. Options such as an affiliate marketing program can incent customers to become that brand's marketing reps, spreading the invaluable word-of-mouth that trumps the efforts of a thousand earnest salesmen.

Aside from cutting out middlemen and avoiding a myriad of physical presence issues, a properly localized and marketed website takes advantage of the second-tier phenomenon. While a plethora of luxury shopping options await the moneyed citizens of Beijing, Shanghai, and Guangzhou, millions upon millions of newly-affluent Chinese in two hundred other large cities have only limited access to foreign luxury products, much as they desire them. Thus China's position at the vanguard of e-commerce. Both the Chinese government and the giants of China's heated internet portal industry (Baidu, Sina, Taobao, Tencent, et al), are making it easier and more popular every day to shop online. The path to the exponentially larger market Canadian wineries can command in China couldn't be clearer, at least in terms of lowered risk and unlimited reward.

Web Presence In China, a Canadian firm with headquarters in Beijing, is a one-stop shop for bringing Chinese customers to your business. Canadians working with a Chinese team localize your website and pull customers from the 460 million Chinese online. Web Presence In China can also provide virtual offices in Beijing, while hiring and managing dedicated sales staff for your company.

Until next time,

Joseph Cooke
North America Branch Manager
Web Presence in China, North America Branch
www.web-presence-in-china.com
Tel: +1-604-351-4184
Toll-free phone: 1-888-542-9742
Email: joseph.cooke@web-presence-in-china.com
Check us out on Facebook!
Follow us on Twitter: twitter.com/#!/WebPresInChina

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