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Dalian: The Northeastern Hub of the Mainland Red Wine Market

One of the fastest growing mainland wine markets, Dalian's consumers also have increasingly sophisticated tastes.

Photo: Red wine: The preferred tipple of affluent Dalian consumers.
Red wine: The preferred tipple of affluent Dalian consumers.
Photo: Red wine: The preferred tipple of affluent Dalian consumers.
Red wine: The preferred tipple of affluent Dalian consumers.

A distinct red wine culture is beginning to take hold in Dalian, with this northeastern coastal city seen as one of the mainland's most rapidly developing wine markets. Known as a stylish and free-thinking city, it has been swift to not only adopt wine as a preferred tipple, but has also embraced many of the other aspects of viticulture – including wine tasting classes, high end logistics services and even a dedicated Wine & Dine Festival.

Such is its enthusiasm for all things grape-related that the city was recently named as the mainland city with the fourth greatest market potential for the wine industry – after Wuhan, Taiyuan and then Zhengzhou. The findings came in a survey by the Shanghai-based Fortune Character Institute (FCI), a market research agency specialising in the luxury sector.

For the majority of consumers in Dalian, their first exposure to red wine is unsurprisingly via local shopping malls and supermarkets. As the red wine market continues to grow in significance, a number of these supermarkets have taken to establishing dedicated wine zones. The rising turnover here is largely down to imported brands, which currently account for more than 50% of red wine sales.

In line with this, there has been a growth in the number of specialist red wine retail stores and subscription-only wine cellars. While many of these offer both domestic and imported brands, the most in-demand items tend to be imported wines, especially those available in their original packaging – seen as a guarantee of authenticity. A number of local wine merchants have even invested in overseas vineyards and are producing wines specifically for the Dalian market.

La Cuvée du Château, a well-known red wine chain store brand promoted by the Dashang Group Co Ltd, for instance, has been keen to establish a foothold in the Dalian market. These proprietary wine brands, produced at Château Lezongars, the group's French vineyard, are exclusively available in the company's stores across China.

The designated red wine zones within the Dashang supermarkets all mimic the decor of their counterparts in French outlets. Capitalising on the rich foundation of the wines' varietal styles, this format is seen as combining professionalism, style and quality. It is aimed countering the current price-led sales strategy by educating consumers and establishing a premium positioning. To this end, every wine variety on offer comes with a full description and tasting notes.

In terms of presentation, the original wine boxes are widely utilised, all against a backdrop of artistically-designed, highly-professional displays. These outlets also feature many of the hallmarks of red wine culture, including cellar motifs and oak barrels. All of these have been designed to create a premium experience for purchasers.

Aside for purchasing wine for home consumption, there is also a growing penchant for visiting red wine bars. Typically, such establishments boast a quiet and refined ambience and have been created as add-ons to the existing premises of many wine merchants.

While, previously, Dalian consumers frequently bought red wines specifically as a gift, over the last two years it has become more common to make such purchases to share with friends or even as items of everyday consumption. This is seen as a clear sign of the growing sophistication of the Dalian market.

Over the past two years, there has also been greater level of transparency in term of wine pricing. This has seen increased demand for those wines perceived as offering good value for money, while needlessly expensive vintages have been left on the shelf. As the market has become discerning, it has also become less susceptible to significant fluctuations in demand in response to minor price variations.

Typically, better-informed Dalian consumers no longer subscribe to the adage that "expensive wines are better wines". Their preference is to seek out those wines that match their tastes. When it comes to buying wine, though, more than 92% of consumers remain highly concerned about the place of origin. This is seen as reflecting the improved market knowledge of many Dalian wine buyers.

As the living standards of Dalian consumers continue to rise, the city's wine culture is becoming ever more engrained. This has seen the city positioned at the very forefront of the wine industry in China's northeastern region.

Shirley Li, Dalian Office

Content provided by Picture: HKTDC Research
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