Building roads for Wine in China w/ Ian Ford & Nichole Mao, Nimbility Asia

Navigating a very fragmented and dynamic Chinese wine market is challenging. Ian Ford, Founding Partner, and Nichole Mao, Partner of Nimbility Asia, help guide wineries to the right pathways for import partners and building demand in China. They also discuss how important domestic Chinese wine production is, the market for US wine in China, and the importance of wine education.

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Detailed Show Notes:

Wine buying is very fragmented

An importer can sell direct, with no middlemen
With few regulations, one can buy wine everywhere, e.g., supermarkets, distributor friends, wine bars
Online ordering important, ~10-20%, WeChat, Alibaba, Jing Dong

"Go to retailers"

Sam's Club - known for wine sales to the mass market
Leading grocery stores - Jing Dong, Hema

Promoting and selling in China

Chinese social media platforms have integrated e-commerce (e.g., WeChat vs. Whatsapp, Douyin vs. TikTok), so people can immediately click and buy
KOLs get commission or paid upfront to promote, lifestyle influencers are important
Traditional wine media stays w/in the wine trade and doesn't reach the mass market
Need good importer(s) for availability, no longer need to be exclusive
View importers as partners, 1,000s of active importers, e.g., DTC importers (Vine Hu, Wiki Wines), big guys (ASC, Summergate, Torres) have extensive sales teams, operate omnichannel
Wine trials are necessary - tastings at festivals, grocery stores, etc.
Word of mouth is increasing in importance - as large KOLs are now often paid, people relying on smaller KOLs in their network more

Domestic production

Majority consumed in China, exports growing off a small base
Boutique wineries (50-100k bottles) - looking at more exports, most in Ningxia, the premium winegrowing region
Guochao movement ("national wave") - Chinese supporting domestic brands

US wine in China

9th largest by volume, 6th by value
Punitive tariffs hit imports, tariffs are more than tariffs, but a signal by the gov't not to buy the wines becomes a stigma
US wine doesn't have the legacy or prestige of Bordeaux, Burgundy, or Tuscany, but have the prices
Premium US producers are American centric not good at exports (Ridge being an exception)

Import duties

Including import, consumption, and VAT duties and taxes
Three levels:
Free Trade - ~26% - Chile, NZ, Australia (previously); wines ~1x US price
Baseline - ~48.5% - France, Italy; wines ~1.5x US price
Punitive - US, Australia (now); wines ~2x US price
Australia went off a cliff since tariffs - France benefitted the most, then New Zealand and South Africa

Wine Education important for growth