Chinese wine consumers have responded differently to Covid-19 compared with Western consumers. Chinese wine consumers remain cautious.
Traditionally, most wine is consumed in the on-trade, but even after lockdown has ended, sales have not picked up in restaurants and other on-trade venues. Economic factors may continue to impact wine sales for an extended period after the outbreak in China. Foreign travelers are also banned, which has a big impact on hotels and restaurants that were a hub for international meetings and events. In fact, many of the best hotels and restaurants remain closed because of this lack of events.
For Chinese people, wine is not yet essential for their daily life.
Chinese wine consumers have responded differently to Covid-19 compared with consumers in established wine markets such as the US and Europe. Wine plays a more social/ business promoting and celebrating role in China. It is not yet essential for daily life. In the US and Europe, wine sales increased as people’s time at home increased during lockdown. It's a different story for Chinese consumers. Right now, there is no mental availability for wine. If people are looking to alcohol to de-stress, many of them will first think about Baijiu or beer. Spend on alcohol is affected as some Chinese consumers are worried that consumption weakens their immune system.
As governments begin to ease movement restrictions, consumers may start to gradually leverage additional channels for their alcohol purchases. For example, e-commerce greatly benefited from strict movement restrictions in China. However, as restrictions started to ease, there has been some return to brick-and-mortar retailing at the expense of e-commerce. The gradual reopening of restaurants is providing consumers with additional alternatives as well.*
Author: David BECK