wine.plus Mr Philipp, how do I make wine successful in China?
Jörg Philipp: First of all, one should be aware of two things: China does not need wine from Europe. Its own production is enormous. There is still a lot of Chinese wine in steel tanks and barrels that wants to be sold in the country. There is no global statement about which wines from Europe can be sold in China. Just as there is no "China". The inhabited part of the country covers an area that would stretch from Malaga in Spain to far beyond Moscow - with the same cultural diversity. Wines that are excellent for southern China may be unsuitable for north-eastern China. As an example for understanding: South China is more suitable for light wines. At the same time, acidity is perceived as unpleasant there. This means: Riesling is difficult. It would be suitable for northern China, where people have a certain tolerance for acidity. However, the Chinese in the north prefer red wine with strong alcohol. And by strong, I mean 14 to 16 percent, because Chinese rice wine with 53 percent is preferred in these regions. Therefore, a look at the individual, regional markets is very helpful. In the Guangdong region alone, there are about 120 million inhabitants living in one belt. This makes it a market unto itself!
wein.plus So I need a local partner who can help me enter the market. How do I find one? There are enough business people who smell the money behind it, but don't have the slightest idea about wine.
Jörg Philipp: Most Chinese have nothing to do with wine, a wine culture is not established. But they see that there is money to be made from it. Therefore, one has to look: Who has been in business longer, who focuses on wine? But I don't recognise that right away, because most business partners earn their money with other things. But there are definitely specialised importers who do business with the West. Most of them have lived abroad for a long time and wanted to bring this lifestyle home with them. Relatively many of them are in the bulk wine business. But to find the right partners, you need reliable knowledge of the circumstances.
wine.plus Where is wine normally drunk?
Jörg Philipp: Never alone, but always in company and together with food. But then with pleasure and a lot of it. There is no cult or culture around wine, as there is around tea, for example. Therefore, one must be aware that in the case of economic uncertainty, wine is one of the first consumer goods to be saved because it is not anchored. This is different from what happens here.
wein.plus How can I prevent my wines from gathering dust on the shelf?
Jörg Philipp: A lot of wine in China is sold traditionally, i.e. through personal contact - just not in wine shops or through the usual channels we are familiar with. Young people, some of whom no longer follow these old structures and whose buying behaviour has completely switched to mobile phones, buy online. They even get better advice and information about the wines there. Wine shops can therefore only be seen as displays of the importers. This can lead to curious situations: One winery was very satisfied with its sales in China. However, the wines were nowhere to be found in shops or restaurants. The importer had its own clientele and did nothing for branding. Often this remains the responsibility of the wineries.
wein.plus How do you assess the bureaucratic effort involved in exporting?
Jörg Philipp: Manageable. If you export to Japan, you will easily cope with China. The documents are clearly specified and with the right transporter and an experienced service company, wines are easy to import. But this is only true as long as there are no incidents like the trade war with the USA or disputes like with Australia.
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wine.plus I know from my own experience that the paperwork and requirements in Japan are extremely high. Questionnaires are handed out with details that belong in the cellar book
Jörg Philipp: If I am used to this meticulous work like for Japan, then I can also export to China, because so many details are not required. You need the analyses, the export certificates and a few certificates. That is no more time-consuming than for other markets. But there is a lot of demand for it. It is common there to call in the middle of the night and ask questions about the product. For small family businesses, this can be a big challenge. If you don't have a good office organisation or a partner, both of which cost money, then I advise against doing business in China. It doesn't pay off for small quantities, because the certificates of origin also cost money. If the importer suddenly withdraws from the wine market, you can quickly find yourself alone. Because replacements are hard to find. Everything has already happened! So you should never become too dependent on this one market.
wine.plus Again and again you hear about the problem of the many wine counterfeits.
Jörg Philipp: There are aspects that absolutely have to be covered beforehand, such as securing the rights to the name. China has its own procedure for this. After all, securing a trademark worldwide does not include China. Counterfeits do occur and are currently gradually decreasing due to stricter controls. Culturally, it looks like this: When a product is copied, it is a sign of appreciation and shows that one has made it in the market. While there is certainly a material loss for the company concerned, one should also include the appreciation behind the copy. However, as soon as it damages the reputation or is possibly harmful to health, the same situation arises as in other countries. But: In the meantime, product piracy is much more strictly controlled and punished. Because more and more products are being produced in China that are worth protecting. So they now understand the value of intellectual property more in our sense and care about it.
wein.plus Is it important to be there yourself and present the wines?
Jörg Philipp: Yes. Chinese only believe things when they see them themselves. Whatever I tell them, I have to prove it. In China, moreover, you are picked up by the importer as host, taken to the hotel, have dinner together, are looked after around the clock. Likewise, this full service is expected when they visit Europe. I experience it again and again at trade fairs: Collecting business cards and polite comments means nothing. No one would openly say that the wine does not suit the customer. That would mean a loss of face for the producer. In China, communication takes place on completely different platforms. E-mail, for example, can be completely forgotten. An email to China is wasted effort! You have to deal with the culture and the circumstances. What you should never underestimate is the size and diversity of the country. There are 56 minorities and huge regions that have developed different taste profiles, business practices and cultural approaches. The language is the same, but the culture is extremely different. With the right prerequisites, however, China is an exciting and promising market. Those who already have export experience should be able to find their way there.