We will analyze the launch of the French wine in the Chinese market and examine whether it meets the expectations and methods of the Chinese consumption. For this, we must determine the consumption patterns of the country and adapt them in accordance with laws of the Asian market in a cost-effective manner. We must define the objectives and issues, business plan, the target market size, demand, competition, and distribution channels before drawing a marketing plan and a development plan.
Wine production in France is highly fragmented, while it is much more concentrated abroad as in Australia where there are only two major wine groups. In addition, foreign competition is increasing, mainly because of the marketing tools that are well equipped for clear labeling and attractive packaging.
Fortunately for France, Bordeaux wines gradually found their high quality image, by working to make them exclusive. France is experiencing a decline in consumption, contrary to growing global demand. 30% of the French population does not consume wine. The two most active countries in the wine market in Asia are Japan and China. The latter tends to have more importance in the international wine market.
Demand is exceeding the supply for the high end wine in the big coastal cities like Shanghai. Wine imports are sharply increasing in China which had an increase of +36% in volume and 43% in value in 2003. This means that wines imported in China are more expensive. China imports majority of its wine from France, and this share is steadily rising: +200% in value between 2004 and 2005. As for the wine country, the growth of its exports have progressed since 2003, with an increase of 29% by volume and 48% in value.
The Grands Crus are selling well and are very profitable, whereas the imported wines are becoming harder to sell. Regarding consumption patterns, we notice that wine is increasingly consumed in small measurements. In China, there are over 1.3 billion people, with 200 million potential consumers.These products are imported within the next two years. China is the largest wine consumer market in Asia.
In 2002, it consumed more than 3 million hectoliters of wine. If Chinese consumption reaches an average of 7 liters per person per year, the potential is enormous. The world market is worth about $250 billion for wines and spirits in 2005. The French wine market shares were 8.4 billion euros in 2001.
China is a huge country with an area corresponding to 18 times that of France with 1.3 billion people or 22 times the French population. China is the biggest consumer of wine in Asia as well as the biggest market economy in the world. China's population is young (47% below 30 years) and therefore suitable to adopt the habits from the West. The market for consumer goods (the category under which wine features) is estimated at 200 million consumers and the estimated number of urban consumers exceeds the total population of the United States and is expected to increase with rise in living standards.
Tags: French wine, Chinese market, Asian market, target market size, demand, competition, distribution channels, marketing tools, foreign competition, the French population, consumption patterns, China, market economy
[...] The frequency Consumption is marked by a strong seasonality: Importers realize 50% of their annual turnover during the Chinese New Year, May 1 and National Day, importers are 50%. Consumption is highest during the holidays Offer The Product The wines of Cotes du Rhone The Cotes du Rhone wines are probably the most diverse wine from France. They exist as red, white and rose wines, generally dominated by Grenache (reds and roses) or Grenache blanc (whites). General information on the Rhone wines: Location In the Rhone Valley, from South Lyon to the Mediterranean Sea Size Covers six departments: Rhone, Loire, Ardeche, Drome, Gard and Vaucluse Size of vineyard 70,000 hectares (170,000 acres) Grape varieties Red: Grenache 55% White: Clairette 35% Production 450 million bottles 14% of wine production in France Wine type Red wine Fruity red wine Dry white wine The products sold in China is a Cote du Rhone wine, that is fruity red Competitors Domestic competitors Chinese wine is mostly made from homegrown grapes blended with cheap imported wine in bulk, which gives a poor quality product that dominates the low-end market. [...]
[...] While Chinese consumers generally declare themselves confused by the abundance of wine (especially in the many French labels) available to them, our wine will be uniquely presented in the market and therefore easily identifiable Packaging It is mainly the packaging that will highlight the brand and this trendy image of the wine will attract the people. Unlike traditional 75 cl bottles, our wine is sold in a bottle of 50 cl.The first innovation is therefore the packaging. Our wine will be called "French Touch", which suggests dynamism and therefore youth. [...]
[...] The French wine market shares were 8.4 billion euros in Structure: Alcohol consumption in China: The biggest producers: Alcohol consumption in France: million million million Distribution of exports in France Top exporter in the world): Distribution of wine consumption in Asia: France should give importance to its leading export product, but this task is difficult and we feel significant decreases in certain periods Demand The potential market China is a huge country with an area corresponding to 18 times that of France with 1.3 billion people or 22 times the French population. [...]
[...] consumption Explode sales by per year per capita Targeted Sales of French wine clientele have increased by High purchasing year New patterns of consumption and Demand new customers The demand is much Exporters of red greater than the wine are more Define a supply for high end numerous The supply market strategy for wines in big coastal is very wide market cities like Shanghai Taking market which allows positioning share companies to Consumers differentiate Differentiate Affluent population. themselves themselves from Image of good living Chinese wines This is a consumer "gift" or "pleasure" Strong potential Determine the Offer for independent best Stay aligned with businesses distribution Red wine, fruity market prices to solution bottle Chinese domestic Set a price production accounts policy justified in China competition Distribution networks Two distribution Concentration in networks: Europe Please read the The China National standards and Import and Export laws to meet Private companies New perceptions that are fully of wine sales in China) the company and collection to Price its products enter the market The Chinese place Product great importance improvement and quality Environment Barriers to Economy market entry for Global oversupply of competition wine and intensified Protects international organizations competition from competitors Decrease in the euro/dollar conversion rate . [...]
[...] We also seem the most appropriate in terms of penetrating the Chinese market Sales Force To sell our products in China, we have a choice between different solutions: - Establishing a subsidiary in China A need to recruit our own sales force that markets our products and to acquire premises are the two things we are looking at currently to improve our marketing standards.This solution is very demanding and requires heavy expense in terms of human, financial and labor resources. [...]
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