As the Mid-Autumn Festival approaches, a key season for wine sales in China, importers are navigating a market filled with mixed signals. While August brought a slight recovery after the summer slump, many wine distributors report that demand remains significantly lower compared to last year.
With the festival, set for Sept. 29, typically driving high sales through gift-giving and banquets, the question on everyone’s mind is whether this festive season can deliver the expected sales boost in a challenging economic environment.
Slow Recovery in August Sales
Importers across China’s major wine-consuming regions report a varied but mostly subdued market. Some distributors experienced an uptick in sales, driven by preparations for the festival. For instance, Shanghai-based Pran Cellar Australia, one of China’s top 50 wine importers, saw a 30% increase in August sales compared to July, according to CEO Hong Boyong. He attributed the rise to a large pre-festival order. Similarly, Fond Wine in Xiamen and Euphrosyne Wine Culture Diffusion in Tianjin also saw significant sales increases—up by 20-30% and more than double from July, respectively.
Despite these gains, many importers acknowledge that these figures may not tell the whole story. Chen Hui of Euphrosyne noted that the spike in sales was largely due to July’s dismal performance, where orders were scarce. “The improvement in August is significant, but it’s more of a rebound from a poor July than a reflection of strong overall demand,” he said.
Falling Behind Last Year’s Sales
While some categories are faring better, the overall market remains soft compared to last year. Pan Liu, marketing director of Wintek (Shenzhen) Import & Export Ltd., shared a sobering outlook. “Last year, one of my distributor clients sold 200 cases of premium wine to a factory. This year, not a single order has come through yet,” she said. She added that last year’s Mid-Autumn sales were already weak, and this year looks to be worse, with projections suggesting only one-fourth of 2022’s sales volume.
An importer from Guangdong, who requested anonymity, expressed similar concerns. She noted that the market is noticeably quieter this year, with the sluggish economic environment affecting consumer confidence. “It’s not just wine, every industry is feeling the pinch. Businesses are closing down, and people are cutting back on gifts and dinners, which traditionally drive wine sales,” she explained.
Economic Headwinds and Cautious Stocking
The challenging economic climate is not only dampening demand but also making distributors more cautious. Wu Yonglei of Fond Wine observed that distributors are now placing smaller and later orders, a stark contrast to the bulk purchases of past years. “They are more conservative now, only restocking when they see client demand,” he said.
Chen of Euphrosyne echoed these sentiments, adding that distributors no longer place bulk orders based solely on product recommendations. “In the past, they might order 100 cases of a product they liked, but now they’re waiting for actual demand to materialize,” he said.
This caution is also reflected in restocking patterns, with luxury brands performing better than mid-range and entry-level wines. Li Yajun, CEO of Merveille Business in Shanghai, noted an increased interest in prestigious labels such as Château Lafite Rothschild and Château Mouton, driven by gift-giving for the festival. “Since August, we’ve been shipping second wines from Lafite and Mouton every week. The luxury segment is holding up better as people are focusing more on collecting and enjoying high-end wines,” Li said.
Luxury Wines Outperform, Entry-Level Wines Lag
While luxury wines are seeing steady demand, mid-range and lower-end wines are facing more sluggish sales. Wu of Fond Wine pointed out that entry-level products, particularly dry whites priced around RMB 100, are still moving, largely due to dining gatherings. However, there has been no significant surge in sales across most categories.
Lei Yumeng, general manager of Zhejiang Xuanyi International Trade, which supplies wine to tobacco shops and e-commerce platforms, reported a lukewarm restocking environment for most wines. Even in this challenging market, Penfolds remains an outlier, with Bin 407 and Koonunga Hill performing relatively well. “Penfolds wines are still being restocked more frequently, particularly for business occasions and online sales,” Lei explained.
Outlook: Mid-Autumn Festival’s Impact Uncertain
With the Mid-Autumn Festival just weeks away, the wine market in China faces an uncertain outlook. While some importers are cautiously optimistic about a festival-driven sales boost, many are bracing for another year of underwhelming performance. The weak economic environment has sapped consumer confidence, leading to a sharp decline in both gift-giving and banquet hosting—traditionally strong drivers of wine sales during the festive season.
Despite pockets of resilience, particularly in the luxury segment, the broader wine market in China remains fragile. As importers grapple with cautious distributors and softer demand, all eyes will be on the Mid-Autumn Festival to see if it can deliver the much-needed boost to wine sales. However, the consensus among industry insiders is that this year’s results will likely fall short of expectations, with the ongoing economic challenges casting a long shadow over what was once a bright spot for the wine industry.
Source: Vino-Joy