Grape expectations from Argentina

Since the partnership was formed in 2011, sales of Catena Zapata's wine have increased steadily, Crotta said. "We are working closely in China to avoid infringements of our wine," he added.

People with experience in the industry, however, do not encourage winemakers to concentrate on China's big cities such as Beijing, Shanghai and Guangzhou. "Competition in first-tier cities such as Beijing and Shanghai is very fierce. There is only limited space for a newcomer such as Argentine wine," said Antonio Mompo from Wines of Argentina. 

With nine years of industry experience in China's market, Mompo was convinced that the real business potential for the wine industry lies in China's emerging second- and third-tier cities, where increasing disposable income enabled the residents to try some affordable foreign wine.

"Rutini's success is very telling - just one province in China is enough to push up its sales," Mompo said. "China is a continent in terms of business strategies. It is very complicated and all its submarkets are very important," he added.

Submarkets, in the meantime, may also have lower thresholds. It does not require a big brand promotion to enter these markets, which means there are opportunities for small wineries. Krontiras is a small winery in Mendoza and this year it managed to send a container of premium wine to an importer in Northwest China's Shaanxi province.

"This is our first container to China. We hope this could lead to something and we are very optimistic," said Thanassis Vafiadis, manager at the winery.

Wine generation

Who are the wine drinkers in China today? According to the report by Rabobank, a large proportion of them are aged between 20 and 39 who earn more than 4,000 yuan ($630) a month in a skilled profession.

To most Chinese, wine has a positive connection with the Western lifestyle and is not yet considered as luxurious as whisky or brandy, or as ordinary as beer, according to the report. This would provide a wine supplier with a strong market position when competing with makers of other liquors, the report said.

"Grape wines are more likely to attract either younger, better educated, wealthier and/or female drinkers than baijiu (China's traditional spirit) or beer...with the potential to form a strong and dynamic consumer base in years to come," the report said.

In the meantime, the report also pointed out that the number of people drinking wine is still relatively small and limited in geographical scope. And it may still take some time before Chinese wine afficionados start exploring imported wines in big numbers.

"It will still take some time before the Chinese get familiar with the wine culture so, rather than being led by the brand, they could choose wine based on personal judgment and preference," agreed Mompo with Wines of Argentina.

Yet Mompo said he also noticed an emerging younger generation who have developed a genuine fondness for the wine culture and are catching up very fast. This younger generation has formed its own wine circles through the Internet where they can share information and knowledge, Mompo said.

So far this generation is still at a relatively early stage of its life and does not have enough purchasing power but, when the time comes, "China will change the world's wine industry," Mompo added.

zhousiyu@chinadaily.com.cn

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