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Marketing policies in China paying off big time for Italian wine exporters

by Emanuele Scarci

In the first eight months of 2016, Italian wine exports to China outperformed the overall market by more than six points. The Italian market share (5.5%), however, remains too low for such a top exporter -- despite being the world’s largest wine producer, the country it still only in fifth place among the main partners of Beijing.

In the first eight months of 2016, China imported wine for €1.4 billion, with a jump of 24%. Italy grew by 30.4%, according to data from Nomisma’s Wine Monitor.

“These are the first positive effects of the promotion policies set in place in China by the Italian government,” said Giovanni Mantovani, the CEO of Veronafiere trade fair. “The trend in exports sees us, at the end of the year, having record sales of €120 million. Trade fair Vinitaly will do its share, both on the incoming side as well as for guaranteeing a widespread coverage of the Chinese territory, which is crucial for recovering the market gap accumulated over the years.”

Denis Pantini, the head of Nomisma’s Wine Monitor, sees a structural growth in China: “In the last three years China has doubled its wine imports. Last year it surpassed Canada in fourth place in the ranking of consumers and this year it is nearing Germany, which it will likely surpass in 2017.”

“The customs data on imports are the only concrete data we have,” underscores Marco Pizzoli, the General Manager of GIV Shanghai, “because the figures regarding consumption are incomprehensible, also because of the fragmentation of the Chinese distribution. In general, however, wine in China is considered a young and trendy product but the penetration is very low: for the Chinese, the habitual consumer is one who drinks wine twice a year.”

In the Celestial Empire, according to Nomisma figures, beer monopolizes at 80% the alcohol consumption, followed by wine from grapes and rice wine, each with a 5% share, and by hard liquor for almost all the rest.

This year, the GIV group will sell approximately 1.5 million bottles in China, a big part of which on Alibaba’s online platform TMall. E-commerce is very important in China (it has 688 million surfers), “but for now,” admits the manager of GIV, “the results have been lower than expected, despite having received a 2% validation on TMall. However, I confirm that next year we will sell 100,000 bottles.”

In short, Italian wine achieves good results in China, but not enough compared to its potential.

“We are struggling,” observes Pizzoli, “not only because of an historical delay but also because we must explain to the Chinese our 300 varieties, while the French work with about thirty. Furthermore, the competitors from Australia and Chile have it easy thanks to the zero duties negotiated with their governments. Brussels instead often argues with Beijing.”

What should be done?

“Of course, we should insist,” responds Pizzoli, “the penetration is low but there are 1.4 billion Chinese. In the end, the numbers are very large.”

And, in fact, the Chinese market is one of the priority objectives of Vinitaly International. The Verona company is not limiting itself to guiding the Italian manufacturers at the Chinese trade fairs but is available, concludes Mantovani, “to implement, in partnership with the manufacturers, the multi-platform Italian Wine Channel to expand on-line marketing through the more innovative channels and to spread the peculiarities of Italian wines and varieties.”