Australian wine company plans to expand in Chinese market

Penfolds, the Australian wine producer, plans to own both a vineyard and a winery in China in the coming years, further positioning itself as a key player in the country's liquor market, said a senior executive.

Since the company currently does not have its own vineyard in China, Jack Wu, Penfolds' general manager for China, said this move will not only invigorate the company's brand but also drive economic growth in China's wine-producing regions such as Ningxia Hui autonomous region and Yunnan province.

Driven by a burgeoning middle-income earner group and a rising demand for wine, whisky and coffee in China, as well as improved China-Australia economic and trade ties, the Australian company will continue to expand its sales networks in online channels, top and second-tier cities to seize more market share within the country.

"Attracting young consumers, conducting cross-industry marketing strategies and developing business on digital sales platforms will be our priorities to grow in China over the next three years," said Wu, adding that wine culture, education and brand awareness are still the key factors in expanding the presence of the company's wine in the country.

Apart from the 2024 Collection Launch in Beijing in early August, Penfolds has been promoting a "multi-country of origin" approach to introduce more of its products made in its wineries in countries such as France and the United States to Chinese consumers in recent years.

As a major wine-consuming country in the world, China witnessed a 1.78 percent year-on-year increase in wine imports, reaching 130 million liters in the first half of 2024. Meanwhile, its import value soared by 20.63 percent on a yearly basis to $710 million, statistics from the General Administration of Customs showed.

In addition to markets in China's Yangtze River Delta region and Pearl River Delta region, Wu noted that Shandong and Sichuan provinces have also emerged as major markets for the company's products.

He voiced confidence that the visa-free policy for several countries, including Australia and France, will encourage more corporate executives and professionals to travel to China, leading to increased business exchanges.

Highlighting that Chinese wine is gaining recognition and popularity among an ever-growing number of domestic consumers, Guo Xin, a marketing professor at Beijing Technology and Business University, said that more global winemakers are eager to explore Chinese market and build partnerships with local companies to seek fresh growth points.