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MIL OSI –  Source: Asia New Zealand Foundation – Carving out a wine market in China By Matt Calman Charlotte Read has been involved in the wine industry for most of her life. Her father was one of Hawke’s Bay’s first grape growers in the 1970s, during the infancy of the New Zealand wine industry. Now she is trying to convert Chinese palates to the award-wining wines of New Zealand winery Villa Maria. Read became Villa Maria’s first dedicated Chinese-based Asia market manager in 2010. She has spent significant time in both Shanghai and Beijing managing two China-based staff. Previously she was based in London as Villa Maria’s UK/European market manager. China is a fledgling market in terms of wine. Its supermarkets have small sections devoted to wine compared to the large volumes displayed in New Zealand supermarkets. But the past two years have seen a shift in Chinese wine buying habits. Wine was predominantly bought for gifting and banqueting but a change of government in 2012 led to a crackdown on lavish spending. “Now a more consumer-oriented wine culture is emerging which is essential for long-term sustainable growth,” Read says. Of a population of nearly 1.4 billion people an estimated 35 million drink imported wine, up from just 19 million two years ago. Imported wine makes up just 12 percent of the wine consumed in China. “Back in New Zealand there’s pressure to get a big presence in China, fast. But we need to have realistic expectations around what the size of the prize is and the timeframe to achieve it in,” Read says. “The wine-drinking public is still a very small group, but it’s growing rapidly and it’s that potential we are here for.” The westernisation of the restaurant experience, and the concept of social wine drinking going hand-in-hand with that sort of occasion, is slowly transforming China from a banquet-only culture. Red wines from the Bordeaux region of France have proved popular. They were an early pioneer in the market and have been well marketed to the point those brands are synonymous with wine in China. In fact, 90 percent of wine drunk and much of local production in China is red wine. “It’s what is preferred because it’s what was known first. In some sectors some people don’t even know that white wine exists. That is the challenge for New Zealand in that our mainstay is white wine.” However, members of the educated, emerging middle class, and women in particular, are very receptive to white wine, Read says. Villa Maria has maintained a presence in five-star hotels, restaurants, retail chains and major tier-one cities through its 15-year relationship with wine importer Summergate Fine Wines. In recent years social media and the internet has become a vital marketing tool. The Villa Maria team in China, with help from an agency, are very active on social media platforms Weibo and Wei Xin (WeChat). Villa Maria posts content about its brand, and about New Zealand, in both English and Chinese to its followers (Villa Maria has more than 20,000 followers on Weibo alone). E-commerce (buying and selling products online) is also a rapidly growing channel for wine sales, with China surpassing the United States as the largest E-commerce market in the world in 2012. China’s imported wine market has two main realms – the cheaper end dominated by large-volume wine-producing countries such as Spain, Chile and Australia, and the premium end of the market. “There are two speeds of the market here. There’s the very cheap end where it’s very price sensitive but New Zealand doesn’t want to play there,” Read says. Awards and accolades are important for brand perception with Chinese consumers. Villa Maria has just been named fourth most admired wine brand in the world by Drinks International Magazine, the only New Zealand winery named in the top 10. “If you build a strong brand you can command the premium. Chinese people will pay when they understand the quality.” Read says New Zealand’s annual wine exports to China totalled $27.7 million (NZD) to the end of January, which meant the market was rebounding to 2012 levels. In 2003, New Zealand Winegrowers figures estimated the annual exports to China totalled just $209,000 (NZD). Read is responsible for a huge territory – from Dubai to Japan and everywhere in between – but being a leader in the China wine market is key to the Villa Maria brand. “It’s symbolic of how important China is to our business … and how we are dedicated to developing this area. China is a market requiring patience and perseverance.”   – -]]>