Wine markets in Asia are quickly expanding, which means that it’s the perfect time to take advantage of growing consumer demand for greater variety in alcoholic beverages. If you wish to access new high-growth markets and promote your wines in a fast and compliant manner, it’s helpful to be aware of the vast opportunities the market offers.
Pernod Ricard Korea, the Korean unit of the French wine giant, has seen dramatic growth in the South Korean wine market in recent years. The company’s liquor sales, including those of wine, increased 33% year-on-year for two consecutive years, reaching 160 billion South Korean Won in 2021-22 (about $US 121 million).
The reason: Immense potential for foreign wine producers in Asia’s wine markets.
In this article, we’ll discuss important Asian wine market insights, as well as straightforward solutions to make the most of the opportunities that come with starting your wine business in a new market.
Why Should You Enter New Wine Markets in Asia?
The Asian wine market is expected to attain annual growth of 5.19% by 2027.
To better understand the specific countries that most contribute to this growth, we conferred with Benjamin Birot, the APAC Managing Director of Your Wine Rep and a wine connoisseur with over a decade’s experience in the APAC wine industry and wine market trends.
Birot says, “Greater China is far and away the largest Asian market for wineries, thanks to Hong-Kong’s contribution (the value of imported wines was $1.3 billion in 2021). But Japan’s wine imports show figures similar to mainland China’s (an imported wine value of around $1.7 billion in 2021).” As for South Korea, the number of wine drinkers has jumped to 12.6 million in 2022 from 10.2 million in 2017.
One of the reasons Birot cites for the escalating growth in the market is the increasing role played by wine education in Asia. These increasingly educated consumers are more willing to look for new experiences. Chinese consumers, in particular, are buying wines from an array of brands, countries and regions of origin.
Changes to Local Wine Markets in Asia
Secondly, Birot says, “Lifestyle trends, mostly among millennials, have been driving a lot of wine consumption for the past few years.” On top of that, Asian wine consumers are now focusing more and more on wine knowledge and the quality of wine rather than on the quantity they consume. This quality factor, Birot explains, is also making them curious enough to broaden their wine selection.
For example, in China, wine has now become a serious alternative to Baijiu, the country’s national spirit and one of the world’s most popular. China’s population of imported wine drinkers has grown by about 14% since 2019.
In terms of logistics, importers have an advantage given that the number of wine consumer who have already bought various wine categories online has now surpassed 50%, according to Wine Intelligence. This further lowers the barriers of entry into the Chinese wine market.
“China has the highest proportion of online shoppers among all alcohol consumers, and the country stands out from all other markets in terms of overall eCommerce penetration and maturity,” declares Birot.
“If we correlate purchasing powers and wine consumption, China’s wine markets are just past their infancy and are on the way to a healthy long-term growth,” Birot adds.
The Top European Wines in Asian Markets
Singling out the market share of the most-favored wines and varietals from Europe by Asian wine drinkers is tricky. This is because preference depends on countries and sub-markets and market data changes quickly.
For instance, GlobeNewswire’s Research Report on China’s Wine Import 2023-2032 reveals that China imported 28 million liters of fresh grape wines in 2021.
According to Birot, “Burgundy is trending in China for high-spending consumers, which means Pinot Noir and Chardonnay are on the rise. Basically, historic wine regions and/or varietals are strong; Bordeaux blend (Merlot and Cabernet), Rhone Valley Blend, Australian Shiraz.”
Meanwhile, in Japan, French and Chilean wines have the lead. In South Korea, the most popular red wine varietals are Syrah and Cabernet Sauvignon, while Sauvignon Blanc and Chardonnay lead the way for whites.
How to Tap into the Growing Wine Market in Asia
In a market as complex as China, Japan or South Korea, a direct presence is necessary to conduct business locally. As laws and regulations change (and are implemented) promptly, you need to have your staff on-site to oversee the markets and help develop your supply chain networks.
Here are two initial steps you can take to seize opportunity:
Work with a Professional Employer Organization (PEO)
Professional Employer Organizations (PEOs) like INS Global provide comprehensive and ongoing employment support in markets globally, including Asia. We can help with administrative onboarding, payroll, tax registration, and more, to facilitate your winery’s compliant and flexible market entry into the Asian region – all without your or your team’s physical presence there.
Plus, with a PEO, you can test the waters in Asian wine markets quickly before deciding to scale your winery there in the long run.
Build Relations with Asian Winemakers and Importers
When expanding to Asia, especially China, you must take into account the language barriers and fast-changing consumer habits. An onsite experienced winery representative can help build strong relationships with Asian wine importers and participate in the key wine shows.
Your Wine Rep, for instance, is a winery alliance with an established network of over 70 wine importers and market knowledge in the APAC region, especially in China and South Korea. They are also adept at solving myriad “small problems,” like supporting importers with their requests and sending them wine samples quickly and efficiently.
Birot says, “Importers are traditionally multichannel, but there is a trend toward more direct distribution channels, thanks to online platforms and the rise of B2C importers.”
Expand into the Asian Wine Market Efficiently with INS Global
INS Global can help you hire and manage HR for professional onsite wine representatives when expanding your presence in Asian wine markets. Our experts have the tools and experience necessary to build strong relationships with Asian wine importers. INS Global also offers support in solving “small problems” such as quickly and efficiently managing day-to-day HR functions for staff in Asia.
With our market knowledge in the APAC region, especially China and South Korea, INS Global can help wineries expand into the Asian wine market efficiently. Our team has the resources to help wineries build their presence and identify new importers in the region.
Establishing a presence in Asian wine markets helps your wine business increase profits by building brand reputation among Asian wine importers and fostering new relationships with Asian partners. To properly reap the fruits of your winery’s expansion into the Asia Pacific or global wine market, you need a reliable and experienced global expansion partner.
INS Global has assisted winery clients in reaching for their global expansion goals for more than 15 years. Our local expertise makes scaling your winery’s operations easier while accessing local resources and networks in the Asian region.
Get in touch with us today to learn how we can help your wine business expand into the Asian market.