The Abacus

Wine Australia


Wine Australia has an article today that provides yet another illustration of what the rise of China’s middle class can mean for Australian businesses.  Three points stand out:
1  Growth is huge and increasing
Australian wine exports to China increased by 40 per cent in 2016, to $520 million.  Last September, China overtook the US as Australia’s most valuable wine export market.
2  It's the middle class again
The article quotes Adrian Zhang, Wine Director at the Park Hyatt, Shanghai:  ‘An increasing number of Chinese people are embracing wine.  As their wine knowledge increases we see how it affects their drinking behaviour.  For example, diners at hotel restaurants are becoming more aware of wine drinking culture and habits such as food and wine pairing, and ideal temperatures at which to serve wine.’
The number of Chinese drinkers of imported wine grew by 10 million in two years, to a total of 48 million in 2016.  As we see in so many cases, much of that growth occurred online: 21 million Chinese people purchased wine over the internet in just the first half of 2016, and China’s online retail market for wine has now reached $630 billion.
3  The story has only just begun
Thanks to ChAFTA, tariffs on Australian wine will reach zero in 2019.  The article points out the enormous potential still remaining in China’s second and third tier cities, whose residents are becoming increasingly sophisticated in their knowledge of wine:  ‘Consumers in the smaller cities are outspending those in the higher tier cities so it’s important that we share the Australian wine story in these second and third tier cities to secure market share for our wines as their wine knowledge and appreciation for wine grows.’
As for wine, so for Australia’s other high quality foods and beverages, as well as our high quality offerings in all the other products and services that appeal to a growing and aspirational middle class.  
The entire article can be found on Wine Australia’s website



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