A Strategic Investigation of the Determinants of Wine Consumption in China

Abstract:     
Purpose -
While the demand for wine in Europe is decreasing, the demand in Asia is growing. China, in particular, has shown strong growth in wine import and consumption since 2001. Chinese wine consumers have, therefore, attracted extensive attention from wine retailers and hospitality operators. The purpose of this study is to determine consumer characteristics, buying behaviour, and the factors that influence the Chinese wine consumer. The main objectives are to identify the variables that determine consumer types and consumers’ decision-making in the buying and consuming of wine, thereby providing all stakeholders with a platform of useful information for their marketing strategies.

Design/methodology -
The study applies qualitative and quantitative methodology together with a literature review and a strategic environmental scan of the Chinese wine market and consumer behavior. The results of an online survey are also analyzed and presented.

Findings -
The results of the study suggest that consumer education, wine related activities, channels of communication, taste, country of origin, quality, and price rank are important factors influencing the buying and consumption behavior of Chinese consumers.

Research limitations/implications - Results suggest that there is a need for retailers to develop and implement informational and educational marketing strategies to educate and inform consumers in ways that reflect their needs and expectations according to demographic characteristics.

Practical Implications -
For all stakeholders in the wine supply chain such as producers, importers and exporters, distributors, and retailers the challenge will be to:
1. Penetrate an emerging and important market to establish presence and capture market share;
2. Strive for long-term growth and profit sustainability; 3. Create competitive advantage through core competencies to support strategic planning and execution; 4. Promote and sell quality products applying the principles of yield management: “to charge the right price, to the ideal consumer, at the right time, in the right place”; and 5. Build brand loyalty and create long-term customer relationships to support growth and prosperity.

Social Implications -
Results from this study suggest that there is still much work ahead to understand the Chinese wine consumer market. This study offers stakeholders, especially end-retailers, useful findings and directions to gain consumer confidence and build brand loyalty. Special attention should be given to the alcoholic beverage retailer and hospitality operators for whom wine revenue is the core of aggregate beverage revenue. To reach these goals, stakeholders in the field need the right tools and information. Scientific inquiry, through academic research can provide answers to practitioners in the competitive landscape.

Originality/value -
This empirical study contributes to the body of knowledge in the field of consumer behavior in relation to wine consumption in an emerging market. The results benefit players in the wine supply chain; with end-resellers such as retail and hospitality operations potentially benefiting the most.

Keywords: wine consumption, China, consumption determinants, consumer behavior, wine marketing strategy, competitive strategy, beverage management

JEL Classification: L11

Accepted Paper Series