Napa Rocks in China

photo credit：internet

 

“It’s noticeable that Napa fine wines rocks in my business” Wu Xianghua, general manager of a fine wine company in China, told WBO writer.

 

Zheng Ziqin, a wine merchant from Shanghai, starting his Napa wine business in 2009, said, ”Napa wine accounted for 25% of my total business last year and 43% this year. ”

 

Falling trend of American wine imports value and volume has hit bottom in 2015 and first half of 2016 in Chinese market, according to Customs data. 

 

Imports volume and value of American wine reduced 22.19% and 20.9% respectively in 2015, priced at USD 5.16 per liter. Imports volume and value reduced merely 0.31% and 9.82% respectively in first half of 2016, priced at USD 4.87 per liter. However, Napa wine only made up of 4% in total Californian wine production, this shows that Napa was just accepted by a minority of China consumers.

 

“It’s hard for low end American wines to compete with Chilean and Spanish wines, but high end American wines are regarded to be prominent  in China, the representatives are from Napa, which were not affected by Chinese market reform“ said Zhu Yuzeng, director of Guangzhou AMG Wine, whose Napa wine sales has increased 30%. 

 

According to his analysis, a majority of Napa consumers used to drinking wines from France and Australia. Napa rocks with ratings-conscious consumers, even though it only makes up for a small proportion in sales.

 

Due to its good profit margin and outstanding quality, Napa rises by the observation of Wu.

 

photo credit：internet

 

“French wines such as Cru Bourgeois and Grand Cru Classe are transparent in price system, pricing at CNY100-300 (€13.55- 40.63) in Cru Bourgeois and CNY 300-1500 (€40.63- 203.17) in second to fifth growth respectively. When it comes to the advantage that there’s no ranking in Napa, which is known for fine wine like Screaming Eagle and Harlan Estate, so there's still big space for pricing.” As a fine wine merchant from Tianjin put it.

 

While some still predicted that high profit will not be sustainable in Napa wines. Zheng said, “The greatest barrier Chinese has met is high price problem. But internet made it possible for consumers to detect price gap between China and other countries.”

 

Zheng highlighted, “Gross margin should go back to rational. If sold out at USD100, tax and transportation fee added afterwards, it should be sold out at USD160 in China. But what we saw is double or triple price before.”

 

At the same time, Zheng assumed that devaluation of CNY to USD has brought slight 10% increase in Napa importing cost, which made it even tough in China.

 

If the article wins your recognition, don’t hesitate to share it to more wineries and vintners.