South African wines have continued to perform strongly in China – a developing market the country believes holds significant potential.According to Marcus Ford, Asia market manager Wines of South Africa (Wosa), who is based in Shanghai, South Africa is on track to export somewhere in the region of R450 million worth of wine to China this year.He said while the volumes and value of wine currently being exported were essentially only at 2019 levels, this was a strong performance by South Africa considering the overall market for imported wine in China had not recovered to the same level as before the outbreak of Cov id-19.“We remain focused on increasing our wine footprint in China and that focus is on the export of bottled product rather than bulk,” he told Freight News.The decision to not focus on bulk wine exports was because Chinese wineries used bulk product as a blending agent to improve their wines.According to Ford, two factors are at play when it comes to South Africa’s growth in the Chinese wine market.“Firstly, the market is maturing and there are more consumers and importers looking for the next new category or trend in wine in China. There are also more mature buyers who understand the exceptional quality to price ratio of our wines,” said Ford. “I think it is important to understand this is relevant at all price points. The second factor is clearly the huge gap left by the Australian category.”Diplomatic rows between Australia and China saw tariffs of up to 212% being slapped on Australian wines going into China, resulting in Australia’s market share in China falling from more than 40% in 2020 to only around 5% this year.Several countries have seen this as an opportunity, including South Africa. France, however, has managed to pick up a large proportion of the slack and has increased its market share in China significantly – as has Chile.South Africa has, however, been one of the biggest winners in terms of growth over the past 12 months or so in China.“Our market share is still small, at only 2%,” said Ford. “What is noteworthy is that in the past year this has doubled, which is extremely encouraging. One trend that we have seen is that there are some major global brands who have switched their origin from Australia to being produced and bottled in South Africa. We need to be thoughtful about this as it may be a short-term fix.“Overall, however, I think it will help put South Africa on the map – both to the trade and consumers.”He said there was no denying that China was a complicated and difficult place to do business, and it required a lot of work and investment. “Producers need the appetite and patience to navigate the market and build relationships. Hard work and persistence is required in the Chinese environment, but it does bring very strong rewards.”According to Ford, while it is difficult to generalise about which wines out of South Africa are the most popular in China, there is increased interest in boutique producers.“These producers are finding homes in China and are doing well. Sparkling and white wines are still on an upward trajectory, and I am optimistic that this is a strong and sustainable trend.”Ford said a lot of work had gone into building the Chinese market, but it was critical going forward to keep up the momentum. “China’s economy is growing at around 6% a year, and there is a growing population for whom imported wines are an aspirational product. We need to be relevant to these buyers. If we, as an industry, all work hard on China, there is every reason to believe we can sustain long-term growth here and double our exports over the coming three to five years.”
