Q: Your company name is interesting, is there a story behind it?
A: Yes. Though my company is established only ten years ago, the term “French Paradox” has existed for nearly two centuries. It derives from the observation that Frenchmen suffer far less incidence of coronary heart disease than other European or American people. The phenomenon was first mentioned by Irish physician Samuel Black in 1819. Then during the famous TV broadcast "60 minutes" presented in November, 1991 on CBS, Doctor Serge Renaud talked about this paradox before several millions of American audiences, and gave the proposal that red wine decreases the incidence of cardiac diseases. After that, the French wine saw unprecedented jump in sales volume. Industry analyses showed that wine-drinkers presented less risk of death due to cardiovascular disease than non-drinkers. In fact, wine present in blood accelerates the elimination of cholesterol. My business is lucky enough to be the first company to register the term in China.

Q: What is the China Wine market like currently, especially the imported wine market?
A: Contrary to many western presumptions, China has been making wine for over 2,200 years. There have been commercial wineries in China since the end of the 19th Century, but wine production has only evolved into a serious industry in the past three decades after China’s opening-up. Currently, China has over 500 wineries in operation. The top ten wineries represented over 60% of the total production, while three domestic wine firms produce half of Chinese wine.

Imported original-bottled wine only has about 7% wine market share in China, and the bulk foreign wine bottled in China has about 5% market share, while the rest is secured by many Chinese domestic brands. The majority of imported wines are from Europe, but in recent years New World wines from countries like U.S.A, Chile, Argentina, Australia, New Zealand, and South Africa see a significant growth in China, largely due to their attractive prices and different traits and tastes.

Compared with Top 3 domestic brands Chang Yu, Great Wall and Dynasty, imported wines are of higher prices, and often are distributed in high-end markets such as star-grade hotels and luxury restaurants and clubs. Their consumer groups are mainly high-to-medium income urban classes or foreign visitors. Their distributors are mainly foreign-owned or JV sales companies and small Chinese traders or distributors.

Q: What are the major concerns of the imported wine players in China?

A: Firstly, most Chinese people have a scarce knowledge of wine. Beer, white spirits and yellow rice wine are the top three alcoholic drinks consumed in China. Chinese people use Jiu to refer to all types of alcohols, from Pi Jiu (beer), Bai Jiu (white spirits) to Putao Jiu (grape wine). The word Jiu is always related to the state of intoxication. There is no such notion as food matching or wine tasting, even for middle-and-high class Chinese. So that you have to spend a lot of energy and money to educate the Chinese mass. You’d better help to establish wine clubs, hold wine tasting fairs and more.

Another problem is few foreign wine brands made enough high profile marketing campaigns, which is partly because many foreign wineries are not familiar with Chinese business and marketing models. Combined with the introduction of foreign wine brands to China only two decades ago, few foreign brands are remembered by Chinese wine consumers.

In regards of channel, domestic brands enjoy strong and extensive distribution channels, and most channels have been bought out by Chinese wine companies, while foreign brands lag a great distance from Chinese counterparts in distribution. Their channels are often scarce and scattered. As mentioned before, Chinese consumers have not yet possessed wine quality examining skills, therefore distribution channels are a determining factor in the sales success.

Foreign brands also face strong competition from Chinese native brands. Due to their tremendous market share, domestic Chinese brands have deep pockets to invest. They secured many domestic vine lands and some of them contracted foreign grape production base as far as New Zealand to guarantee their production. They also spent heavily on brand promotion and channel building. At the same time, large foreign companies have not yet entered the Chinese wine market, and those resource-lacking smaller foreign wineries cannot compete with Chinese state-owned wine companies.

But the overall Chinese wine trend is that more and more Chinese are beginning to appreciate high quality foreign brands which are associated with fashionable and romantic life style, as their living standards see continual growth. And many industry analysts also predict foreign brands will have ever greater popularity and sustained growth in China.