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China wine targets middle class

Premium sales to China will not give Australia’s wine industry the bounce it is hoping for, a new study suggests.

Melbourne University academics say an exporting focus on high-priced wines is being undermined by a new Chinese drive to buy local.

The findings, to be published in the Journal of Research in Marketing, counter the assumption that Chinese consumers pay top dollar for foreign gifts to ­impress friends and associates.

Marketing researcher Angela Paladino said the Australian documentary Red Obsession had fanned a perception that China’s wealthy readily paid stratospheric sums for the best imported labels.

But she said the super-rich tended to target French wines, considered higher status than Australia’s, and they were not the key market anyway.

Paladino said the biggest market potential lay in China’s burgeoning middle class, which was moving away from the traditional tipples — rice spirits and beer — as growing incomes fuelled an interest in wine. But these consumers were rejecting Western ­associations.

“They want modernisation, but they are much more appreciative of their local culture and norms,” she said. “Supporting the Chinese community is seen as important for ­social status and image, (which are) huge drivers of behaviour.

“If you can relate to this group of consumers, you’ll be able to find a new emergent market for wine. But to do that you really have to distance yourself from Western associations, and localise a little more.”

Paladino said previous studies had found Chinese wine lovers preferred foreign brands. “But most of them (focused on) Beijing, Shanghai and other really large cities. This study spans the ­regional and poorer cities of China. This is where we’re seeing these effects.”

She said exporters should consider branding their products with Chinese names rather than established Australian titles such as Penfolds and Jacob’s Creek.

The study was based on hundreds of surveys translated into Chinese by co-author Nicole Ye Yang, a Melbourne doctoral student. Paladino said the survey had been designed carefully because Chinese consumers had a tendency to “over-report” intentions to buy foreign goods.

Wine exports to China fell 7 per cent in 2013 and 8 per cent in the first half of 2014.

- This story was originally published by John Ross for The Australian.





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