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          Italian wines see rosy future in China

          By Zhu Wenqian in Beijing and Yang Jun in Guiyang | China Daily | Updated: 2019-10-17 09:36
          Liu Qiang (right), general representative of Genagricola in China, talks to an Italian exhibitor during the 9th China (Guizhou) International Alcoholic Beverages Expo in Guiyang, capital of Guizhou province, on Oct 10. [Photo by Yue Wang/For China Daily]

          Growing appetite for new varieties prompts consumers to look beyond traditionally popular French and Australian offerings

          In the past, Chinese consumers tended to be less familiar with Italian wines than their French and Australian rivals, which entered the Chinese market earlier. Now, quality-conscious drinkers are taking an interest in a more diversified range of wines, driven by growing incomes and increasingly sophisticated tastes.

          Italy, with more than 60,000 wineries, produces more than a quarter of the world's wine. It is continuously pushing ahead with promotion of its wines in China, as it is bullish on the significant growth potential.

          Most Italian wines are sold in Fujian, Zhejiang, Jiangsu, Hebei, Sichuan and Liaoning provinces, as well as Shanghai and the Inner Mongolia autonomous region. Products made in southern Italy have been better-received in China, Italian winemakers observed.

          Wines made in southern Italy taste less sour and bitter and more fruity. They carry a reasonable price tag, with many products selling for about 100 yuan ($14) per bottle, said Fabio Marini, export manager of Cherri, a winery in Italy.

          "Most wineries in Italy are not big, and they have different focuses. Italian wines are relatively fresh for Chinese consumers. Most Chinese prefer strong wines with high alcohol content, and Italian wines cater to that appetite. While the costs and taxes they face in China are relatively high, we hope there will be improvement in that regard," Marini said.

          Generali Agricoltura SpA, or Genagricola, one of the largest wine distillers in Italy, established its sub-affiliate company SinoDrink in China in 2008, and now it sells nearly 1,000 Italian wines from more than 50 Italian suppliers to Chinese consumers. It also sells other products such as mineral water, coffee and wine drinking utensils.

          Last year, SinoDrink sold 1.3 million bottles of Italian wine in China, and it's sales have seen an annual growth rate of 30 percent in the past few years.

          "We mainly sell our products to business people, large-scale banquets and high-end restaurants. But we have seen pretty good sales at some hot pot restaurants as well. Over half of our products were sold through dealers in China," said Liu Qiang, general manager of Genagricola in China.

          "E-commerce platforms are a new form of sales channel and we have launched our flagship store on Tmall. Yet, wine is a relatively special product, as it embodies unique culture and needs to be appreciated and tasted personally," he said.

          "Some wines that are widely promoted and have strong brand impact in China will be better sold through e-commerce channels. Other niche products from various wineries have certain disadvantages online," he said.

          Chengdu Two Lions Trading Co Ltd, a dealer for an Italian winery in Chengdu, Sichuan province, said in the past three years, the company saw its sales revenue in China increase by 20 percent annually. Its main consumers are those aged between 25 and 40.

          "We plan to invest 3 million yuan in the promotion of Italian wines in China, in areas including product development, advertising, and staff training. Next year, we plan to cooperate with major e-commerce platforms JD and Tmall to sell our wines," said Augusto Bordini, general manager of Chengdu Two Lions Trading Co Ltd.

          Last year, the total export value of Italian wine reached 6.2 billion euros ($795 million), and the bilateral trade value between China and Italy reached $54.24 billion, up 9.1 percent year-on-year.

          "China has entered a period of accelerated consumption upgrading, and the consumption structure has improved from survival to growth and enjoyment. Wine is undoubtedly an enjoyable consumer product in China, and such consumption trends have brought greater opportunities to Chinese and Italian wine companies," said Massimo D'Alema, former Italian prime minister.

          "Guizhou province, a liquor-making region, has rich resources, a pleasant climate, and huge potential for development. It is attractive to investors. Guizhou has many similarities with Italy, and there are many areas available for potential cooperation," he said.

          From January to July, retail sales of consumer goods nationwide achieved 22.8 trillion yuan, jumping 8.3 percent year-on-year. In July, the retail sales value of tobacco and liquor products increased by 10.9 percent over June, according to data from the Ministry of Commerce.

          "The global wine industry as a whole is on the rise, and opportunities coexist with challenges. The wine industry in China should continue to explore new technologies and operating models, and strengthen cooperation with global firms to achieve high-quality growth," said Qian Keming, vice-minister of the Ministry of Commerce.

          In China, supermarkets remain the main sales channel for wine purchases, followed by liquor stores. Consumers of wine have become increasingly younger, according to consultancy Frost & Sullivan.

          Last year, consumption of liquor compared to wine globally was half-and-half, while in China it was seven to one, indicating significant room for growth for wine in China. The average per capita consumption volume of wine in the United States has been more than 10 liters a year, while the number is lower than 1.5 liters in China, Frost & Sullivan found.

          "With continuously growing incomes in China, more consumers are pursuing healthy and quality lifestyles. More people are expected to purchase wine as part of their daily lives, the wine industry is facing rosy prospects. Local distinctive wines made in smaller producing areas have become more recognized by Chinese consumers and they will embrace more growth opportunities," said Neil Wang, president of Frost & Sullivan in China.

          Wang Jin and Zhao Yandi contributed to this story.

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