WITH a burgeoning middle-class and a newfound thirst for table wine China has emerged as the new frontier for the global wine industry. McWilliam’s Wines has helped lead the charge, finding that family ownership and a long history of winemaking in Australia are invaluable assets when trying to sell wine to China.
The lure of wine export to China is a tempting one, given the size of the market and their increasing appetite for wine. But the competition among thousands of international exporters is fierce. Some have had great success, while others are struggling to find their place in the market.
McWilliam’s has cemented itself as one of the most sought after and trusted wine groups in China and the greater Asia-Pacific region.
However, it is not as simple as turning up on China’s doorstep with boxes of wine. There are many obstacles to success. Language barrier, high import duties and a fragmented market are some.
Fortunately, McWilliam’s has managed to navigate many of the pitfalls by adhering to its well-formed values.
McWilliam’s Sales Director Asia Pacific Garrick Harvison said much of the company’s success could be attributed to an ability to build “guanxi”, a Chinese term for strong relationships.
“The fact that we are family-owned and adhere to long-held values has helped us immeasurably,” says Garrick. “Coupled with our strong history of winning accolades it means we can go to market with great confidence.”
Wine Australia Regional Manager China Willa Yang supports this notion and acknowledges that family-owned and highly-awarded companies are highly regarded in China.
“Chinese consumers have very limited knowledge about wine. There is limited brand awareness in China, so only several Australian big brands are known to the public,” Ms Yang said.
“Honesty, integrity and keeping promises are essential to doing business in China, so businesses are well served to uphold these values.”
Garrick says that good principles and a reputation are not enough though- it is important to have the ability to adapt to customer and market requirements, as well as commit to regular travel to support customer requirements.
“The size of the Chinese market and our isolation as a market means that there can be difficulties from a logistical sense. Small changes to demand from their end can mean big disruptions and the need to adjust shipping and supply. To be able to be successful in China, you have to be flexible and able to be constantly adapting to what the market wants.”
Garrick also says that austerity measures introduced by the recent change in government have meant a real shift in the market. While some of the European and French luxury wine brands have been demanding ever increasing prices, they have seen a decline, while McWilliam’s has continued to perform strongly due to a more accessible price/quality ratio.
McWilliam’s has been in the Chinese market for 16 years and the numbers point to the increasingly important role of China for the company’s global wine business. To put it in perspective, 2013 saw China as the fastest growing market for McWilliam’s.
Garrick also says that the market in China has no ceiling and McWilliam’s are in the perfect position to ride the boom.
“There are over 1.35 billion people in China, their economy is continuing to expand and their thirst for wine is ever increasing. We’ve been there for a long time and our reputation as a family owned company with a long history of integrity and honesty in business, coupled with a portfolio of award winning wines, holds us in good stead for the future.”