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The Growing Market for Australian Wine Exporters

As Australia’s largest trading partner, it should come as no surprise that exports to China continued to grow in 2018. However, the emerging middle class in China presents a massive opportunity for Australian wine producers in the coming year.

 

During 2017 and 2018, growth in the Australian wine exporting industry soared a record 51%, to break the $1 billion-dollar barrier – the only country to have ever exported that value to wine to a single country in one year.

 

Over the past 5 years, domestic consumption of wine in Australia has slowed. With research suggesting that this trend will continue, the Chinese market presents a wealth of opportunities for Australian wine exporters, particularly those interested in operating in the e-commerce market.

 

After experiencing significant growth in recent years, the Australian wine exporting market to China is currently valued at $2.57 billion-dollars but is projected to grow by a further $1 billion-dollars by 2023.

 

Credit: Wine Australia

 

So why is 2019 the year to enter the Chinese wine market?

 

In 2019, all tariffs on Australian wine exports to China are scheduled to be completely eliminated under the Free Trade Agreement. As a result, this will continue to make Australian wines the most competitive in the market with other wine exporters contending with tariffs as high as 20%.

 

For those companies looking to enter the Chinese wine market, the number 1 key to success is technology. The reach and accessibility of the e-commerce sphere presents a great opportunity for producers to increase brand awareness, develop a demand for your product and establish a market share.

 

The e-commerce sphere in China has experienced significant growth in recent years with 48% of all Chinese wine purchasing conducted through online avenues. Therefore, the prior necessity for brands to maintain a presence in brick-and-mortar stores has significantly declined. Thus, companies that invest in developing a strong online presence in China, will definitely receive a strong return on investment.

 

Second only to France, Australia has the largest amount of wine exports to China. To put this into perspective, France has 46% of the global wine market share whilst Australia has only 12%. This is despite the fact that only 1% of Australian websites are fully functioning in mainland China, with a reported 99% experiencing some form of loading issue or incompatibility.

 

For Australian wine producers looking to enter the Chinese market, now is the time. With only 2% of the Chinese population having identified themselves as “wine drinkers” the opportunities for growth in the Chinese market are only just beginning.

 

Developing an integrated digital marketing strategy that encompasses the customer persona of the Chinese market as well as featuring strong online capabilities, will ensure that new entrants to the Chinese market develop brand awareness and capitalise on Chinese consumers new-found taste for Australian wine.

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