Who’s Who of Guangzhou

Guangzhou was one of the first mainland cities to open its doors to the world when it began hosting the Canton Fair in 1957. Since then, it has been a trading hub for a variety of industries, from furniture to machinery. With a ready-made market of experienced business people, Guangzhou and nearby emerging powerhouse Shenzhen are good points of entry to China. Their trading history and proximity to Hong Kong makes access and communication easier than in some other mainland cities. 

Importers

Wine consumption in China is growing, but it still trails the rest of the world’s by more than half, which leaves room for wine merchants, new and existing, to expand their businesses. South China’s most populous city, Guangzhou was the country’s second-largest wine importer by volume in 2017 (15.7m 9-l cases), only marginally behind Shanghai (16.7m). The two areas combined shared 50% of China’s overall imported wine by volume and 64% of its total import value, making Guangdong an important market. There is a strong preference for foreign over domestic wines, with France the favourite, followed by Australia and Chile (both of which have free trade agreements with China). Italy and Spain also have a footprint thanks to a few specialist importers. And wine imports from the US are growing. According to customs data from January to March 2018, China imported $23m worth of US wine, up 46% compared to the same period in 2017. South China alone imported $21m of US wine in 2017, the US Department of Agriculture’s Foreign Agricultural Service reports. 

In Guangzhou, as in elsewhere in China, wine is no longer considered a luxury. It is consumed on a growing number of occasions, including business lunches and family gatherings. Celebrations are still the most popular events for drinking still and sparkling wine, but while there is anecdotal evidence that more women are drinking bubbles and Moscato, sparkling is not trending as much in Guangzhou as it is elsewhere, partly because it is not considered the most quaffable of wine styles for south China’s ganbei culture, but also because sparkling wine is not as well-understood, asserts Baron Hong, general manager of Pran Wines, which imports Australian wine into China. 

Nightclubs and karaoke (KTV) bars are the exception to this rule, providing a robust “underground” market for bubbly, but the demand in those venues is for cheap Prosecco and entry-level bulk wines, and purchasing is controlled by a colourful underbelly of characters. No-one knows precisely how many companies import wine in Guangzhou. 
Estimates range from 500 to 3,000, not including grey market channels. 

ASC Fine Wines, one of China’s largest wine importers by volume, began importing to China in 1996, with offices throughout China, including in Guangzhou. ASC distributes 1,000-plus wines from more than 100 wineries in 16 countries, including fast movers from Australia’s Brown Brothers and France’s Domaines Barons de Rothschild.

Aussino World Wines has more than 1,000 labels in its portfolio. As well as sales and distribution, Aussino has a retail network of more than 200 stores and a steadily growing e-commerce business. The Guangzhou-based importer has also opened offices in other Chinese cities and begun offering training courses and education through the Aussino Wine Academy, led by Grace Cai.

East Meets West Fine Wines, head-quartered in Shanghai, has a significant presence in Guangdong and represents 70 wineries from 12 countries. Everwise Wine, established by Michael Tse in the mid-1990s in Hong Kong, began importing Australian and New Zealand wines to the region. Since setting up in China in 2004, the company’s portfolio has expanded, but Tse says Everwise retains its reputation as an Aussie specialist.

Jebsen Fine Wines has been importing wines from prestigious producers Champagne Bollinger, Marchesi de Frescobaldi, and Rosemount Estate to China for more than 25 years. Jointek Fine Wines, which was established in 1988 initially to represent well-known spirit producers, has been focused on wine since 1996 and now has seven retail stores in Guangzhou, plus a strategic partnership with Sam’s Club nationwide. Jointek is in the process of launching a bonded warehouse in Guangzhou to improve warehousing and logistics, facilitate cross-border trade, and offer supply chain support to businesses.

Summergate represents more than 80 brands from 19 countries, many exclusively. The importer handles popular New World brands such as Villa Maria and Concha y Toro. Torres China is a key player in Guangzhou, selling more than 400 wines from 14 countries, including wines from Opus One, Egon Müller Scharzhof and, of course, Familia Torres. Beyond these large importers, there are many importers for which wine is a side business after, say, soy sauce or shoes. Guangzhou-based Yangcheng Food, a major condiment producer and food importer is one such, covering brands including Blue Nun, Sylvester, and some low-end Bordeaux reds. 

Exhibition epicentre 

Held twice a year, generally in May and November, Interwine is the region’s dominant wine show. The May show (it will move to June in 2019) is the larger of the two and attracts more visitors; November’s is more for local companies and clientele. Wines exhibited are generally in the entry-level price segment seeking high-volume opportunities. Rita Jia, deputy general manager of the group that organises Interwine, said wine promoters in China are winning when it comes to introducing wine to consumers’ everyday lives. “We want educated people to drink wine every day for lunch and dinner,” she said, optimistically. Already an epicentre of trade for so many industries, Jia believes Guangzhou offers an opportunity to incorporate wine sales into existing business and trade networks.

Retailers

Retail access is better in Guangzhou than it is in other Tier 1 Chinese cities like Shanghai, say market insiders, but not as good as it is in nearby Hong Kong. Supermarkets Metro, Olé, Taste, Carrefour, and ParknShop capture a large share of wine sales, followed by department stores and specialist wine shops. 
Value-seeking consumers are driving supermarket business up in the RMB100 to RMB200 ($14.75 to $29.50) range, while the average retail price is RMB150 to RMB200 (for wines that wholesale at RMB53). Consumers seek out heavy bottles, like those from Chile, with classic, historic-looking labels. “When people start consuming wine, an impressive bottle is important. Afterwards, the considerations are price and brand,” says Jointek director  and vice-president Franco Yeung.

Cantonese people might be more likely than Shanghainese to accept a new wine, 
regardless of brand, but only if the price is right, says Kent Tsang, editor in chief of “The Black Wine Guide”.

E-commerce

Web sales became popular in China in 2012 to 2013. The main online sales points are JD.com, Alibaba’s TMall, Taobao (mainly for bottles price at less than RMB100), plus offers via social media channels Weibo and WeChat. Yesmywine.com and Jiuxian.com are the most popular wine-specific e-channels in Guangzhou.

“Young consumers aged 20 to 35 are more influenced by internet searches,” Jointek’s Yeung claims. “Online businesses are super-aggressive in pricing, so retail operators have had to change their prices as well. A bottle of Rawson’s Retreat that sells online for RMB35 might retail for RMB40-RMB45 in a supermarket.”

Sommelier shortage?

Renowned for appreciating excellent ingredients, Cantonese people love dining out on great cuisine, but unlike Europeans, guests are largely unconcerned with food pairing – wine has historically been relegated to a backseat at banquet tables. “There are so many foodies in Guangdong, so the wine culture is bound closely with the local dining culture,” Tsang says. “Just as diners welcome exotic ingredients into the local cuisine, the market is open-minded to wines from less well-known producers. But that does not necessarily mean wine decisions are based around food pairing.” 

When it comes time to make a selection, guests in many of Guangzhou’s five-star hotels might once have found themselves flying solo. As recently as 2014, there were 15 five-star hotels in Guangzhou and only three had sommeliers. But the city no longer lacks luxury hotel chains and the experienced wine experts that come with them. “The number of international hotels is now closer to 25, all of which have sommeliers,” Yeung says. Wines are more likely to be bought by the bottle than by the glass due to concerns about a wine’s perceived freshness, observes Fion Tam, also a Jointek director and vice-president.

Media and peer-to-peer influencers

WINE magazine, published by a state-owned Guangzhou publishing house, dominates the glossy print scene in southern China and is strongest on its home turf. The magazine hosts wine tasting events and the annual Golden Bottle awards.

Guangzhou is more KOL-driven (key opinion leaders) than its Tier 1 city counterparts, Shanghai and Beijing. Notable influencers include Huang Shan, a freelance wine journalist, novelist and reviewer with about 50,000 WeChat followers at last count. Dennis Lin is a wine writer, author, judge, and consultant to international wine boards. Many influencers are trainers and educators first. Sophie Liu is a wine writer and educator for the online dining resource the “Penguin Guide”, with more than 51,000 Weibo followers and a number of wine books published internationally. 

Guangzhou’s hometown heroes are blogger Pan Jiajia, who has 13,500 followers and also happens to hold a PhD in Wine Economics, a WSET Diploma, and is general manager of Guangzhou Jiachen Wine Trading Company. Skilled sommelier Grace Cai  is general manager of wine education and publications at Aussino Group. Another sommelier-turned-educator, Sylvia Liu, shares her wine knowledge and opinions with a Weibo audience of 3,500, her WSET students, New Zealand wine pupils, and scholars of the CIVB Bordeaux Wine School. 

The Guangdong market is an open door, dynamic and distinct from other Chinese markets in the east and north. A centre of trade and one of China’s top wine importers, Guangdong welcomes a diverse range of wines to grace a growing number of dinner tables and menus. While not a perfect model of pricing and quality, Guangdong is one of China’s key wine markets and gateway channels.