The Chinese wine market will grow from CNY268.6 billion ($42 billion) in 2021 to CNY462.4 billion ($72.2 billion) in 2026, registering a compound annual growth rate (CAGR) of 11.5%, as a rebound in economic and social activities will spur on-premise and off-premise wine sales, says GlobalData, a leading data and analytics company.

GlobalData’s report, “China Wine – Market Assessment and Forecasts to 2026” reveals that the market growth will be primarily driven by the still wine category, which is set to register the fastest value CAGR of 11.5% over 2021–2026, followed by the sparkling wine category with 11.3% CAGR.

Bobby Verghese, Consumer Analyst at GlobalData, comments: “Wine is becoming a popular alcoholic drink among Chinese consumers owing to its perceived health and beauty benefits, and the influence of Western lifestyle habits. Young Millennials and Gen Z adults, who wield considerable purchasing power, are reshaping the Chinese wine market. Wine vendors are adapting the product offering and marketing and branding activations to suit this young cohort. In addition, wine brands are building their presence on leading ecommerce portals such as Alibaba Tmall, targeting these digital immigrants and natives.”

However, COVID-19 lockdowns and restrictions continued to undermine wine sales in 2021, with the value sales in local currency units declining annually by 2.7% in 2021. On-trade sales contributed the bulk of wine sales in China in 2021, followed by food & drinks specialists and hypermarkets and supermarkets.

Verghese adds: “Wine companies are leveraging digital and social media marketing strategies, including live streams with key opinion leaders and celebrity brand ambassadors to connect with younger audiences. Manufacturers are also introducing small-size wine bottles to encourage novice drinkers to try out their brands or labels.”

The per capita expenditure (PCE) on wine in China decreased from $36 in 2016 to $35.6 in 2021. While this surpassed the regional average of $21.8 in 2021, it fell below the global average of $65.3. The PCE on wine will increase to $60.1 in 2026 in line with the economic recovery and increasing household disposable incomes.

Yantai Changyu Pioneer, Dynasty Fine Wines Group, and Tonghua Grape Wine were the top three companies in the Chinese wine market in volume terms in 2021, while Changyu and Dynasty were the leading brands.

Verghese concludes: “The stringent COVID-19 lockdowns in key markets such as Shanghai, Beijing, and Chengdu provinces have taken a further toll on the wine market in 2022. As the pandemic dissipates and the economy rebounds, wine consumption is set to soar. Overseas winemakers from France, Chile, and the US, and local wineries are in a race to fill the void left by waning sales of Australian wines, which were hit badly by the anti-dumping tariffs and the political standoff between the Chinese and Australian governments.”