Mar. 26 (NBD) -- With upgrading competition between China's domestic wine makers and foreign counterparts, the wine imports doubled over the past five years, while the wine production at home was declining.

China's domestic wine makers are seeking for new growth engine amid decreasing production.

Sun Jian, CEO of Yantai Changyu Pioneer Wine Company Limited (Changyu), one of China's oldest wine company revealed to NBD that the company is shifting towards medium- and high-end wine businesses at the China Food & Drinks Fair held in southwest China's Chengdu last Friday.

Sun said that his company isn't eyeing the low-end market, because to scramble for the bottom-end of the market is dangerous for an enterprise.

Coincidentally, another domestic wine producer China Great Wall Wine Co., Ltd (Great Wall) announced that it plans to push up the terminal retail price of its wine products at the supermarkets to above 50 yuan (7.9 U.S. dollars).

It's noticed that China's wine makers are adjusting their strategies under the impact of low-price products of foreign brands.

Photo/Shetuwang

Customs data shows that in 2017, China's wine imports stood at 2.789 billion U.S. dollars, representing an increase of 17.95 percent year on year; the imports volume reached 746 million liters, up 16.88 percent compared with the same period of the previous year; and the average price was 3.74 U.S. dollars per liter which was nearly 10 percent lower than the price of 4.14 U.S. dollars per liter in 2013.

Sun introduced that there are inexpensive imported wine on the market, for instance, 1 euro (1.2 U.S. dollars) per liter. To Sun, such wine is not quality products and it doesn't meet the demand of people with medium income and the circumstances of China's current consumption upgrade.

However, the low-price wine is taking up a huge market share.

Vintage China Fund director Yuan Jiang explained the reason lying behind the transformation of China's wine giants is the impact posed by imported wine.

Zhu Danpeng, a researcher at the China Brand Research Center noted that as the consumption upgrades, the sales of medium- and high-end wine brands are satisfying. Domestic wine producers will not give up such opportunities and will make certain moves accordingly as soon as possible, Zhu added.

In Sun's opinion, China's wine market is expected to embrace continuous growth and China will become the world's second largest wine consumer in the coming five years from its current 5th place.

Great Wall's general manager Li Shiyi believed that consumers previously take an interest in whether the wine is imported or not, but now what they care about is the quality of the products.

This echoes the view of all domestic wine companies. As Sun said, Huawei, China's telecommunications behemoth, set a good example of going out which could be learned by wine makers. Once a company has gained international presence, it will be recognized, Sun noted.

Yang Zhengjian, deputy secretary general of the China Food Association, commented that Changyu and other domestic wine makers intend to leverage the opportunities created by high growth of imported wine in order to build themselves into international firms and accelerate their global expansion.

The strategy is to build strong Chinese brands by deploying globally, integrating global technology, raw materials and talents, and adopting an international vision and standards, Sun concluded.

Email: gaohan@nbd.com.cn