Chinese import demand for wine: evidence from econometric estimations

Abstract

By estimating the demand for imported wine in China, this study investigates Chinese consumer choices in terms of wines and countries of origin, as well as the competition among suppliers. The Restricted Source Differentiated Almost Ideal Demand System (RSDAIDS) model is applied. Three goods (still bottled, bulk and sparkling wines) imported from the main exporting countries (France, Italy, Australia and Chile) and from the rest of the world are analysed. The model also includes socio-economic variables and seasonality. The results show that price sensitivities are different: inelasticity for sparkling wines, elasticity for bulk wines and different degrees of responsiveness for still bottled wines. France plays the role of market leader, and competitive interdependence emerges among its followers. The estimation of import expenditure is characterised by the widening of the wine portfolio. The minor followers generate high competitive dynamism. Relationships of substitutability or complementarity between wines and sources emerge. Finally, research perspectives of wine marketing are suggested.

Wine consumption in China: profiling the 21st century Chinese wine consumer

“…Wine consumers are more likely to live in large urban areas such as Shanghai, Beijing, Guangzhou, Chengdu, and Shenzhen (Li et al, 2011;International Wine and Spirit Research, 2013). As noted in Lin and Wang (2010), Agnoli et al (2014), and Capitello et al (2015), there are important differences between people living in urban areas and in rural areas; the former is related to modernity, which in China leads to the consumption of foreign products, and the latter is linked to traditional consumption patterns. In addition, as Ripari (2005) points out, the difference in income between the urban and rural sectors is important.…”

“…Chinese consumers are influenced by a history, culture and values that are very different from those of a Western consumer (Taylor, 2014). But in recent years, as noted in Capitello et al (2015) and Gómez et al (2015), the Chinese wine consumption has undergone major changes underlying a modern Chinese consumer, who adopts the Western lifestyle, and prefers foreign products (Zhao and Belk, 2007;Li et al, 2011;Bi et al, 2012). Wine is a drink reflecting the expectations of this new consumer, generally a young consumer.…”

French Wine Exports to China: Evidence from Intra-French Regional Diversification and Competition

“…Wine has become a more regular consumption commodity for a growing segment of Chinese customers who are interested in wine and wine culture (Muhammad et al, 2014). The upper middle class, specifically the well-educated younger generation, plays an important role in the rising share of fine wine in the Chinese alcohol consumption market; the very expansion of the middle class has driven the demand for wines in the entry level and commercial wine price segments (Capitello, Agnoli, and Begalli, 2015). Drinking wine—particularly imported wine—does remain a symbol of social status (Li et al, 2011; Xu et al, 2014), in reach of a growing number of people.…”

Country-of-origin effect and millennials’ wine preferences–a comparative experiment

“…In general, however, it is reasonable to imagine that the history, tradition, and reputation of France in the world of wine generates a considerable effect, especially at the international level, in the appreciation of the overall quality of French wines (Vrontis and Papasolomou, 2007). Consequently, that translates into a higher average selling price per litre (Brooks, 2003;Schamel, 2003;Capitello et al, 2015). It is not yet clear whether and how the reputation of the country-of-origin affects newer consumer segments in wine consumption and hence, the focus is now on millennials, the segment on which wineries are investing the most, knowingly or unknowingly.…”