COVID's Impact On Chinese Fine Wine Consumers


I'm going to be talking about the impacts on china's why market on how those impacts affected consumers buying behaviors. First of all this year. The buzzword hearing is locked down on but in china and we talk about lockdown. It's in the strictest sense one household household can only allow one person to go out once a day to purchase all the necessities unlike in europe. Or in the us where you have the luxury to go out and to do a lot of chores. In china it's really strict on areas. That are most affected by the pandemic. You're not even allowed to go all. There's a community officer who is on standby just to send all the necessities to you to your door. So this is the contact where talking about when we want to understand kovic impact on china this is also the circumstance under which a lot of the business have to operate for three months from late january to april. So this is something i want to want. Everyone who's listening in to bear in mind to keep it in the back of head on back of a mind to understand the corvettes impact. So i upon. I'm going to talk about cova impact on china's wine imports. So what happened to win. By the end of january china had locked down the whole country as a result restaurants hotels essentially closed and miss the most important chinese new year sales for anyone wondering how big and how important is chinese new year for a lot of wind merge and a lot of the a lot of them who i talked to told me chinese new year wine sales account for roughly twenty percent or even up to thirty percents of their i knew sales so imagine seven day period was lots okay and then imagine. That period was attended for three months. That's the challenge facing a lot of the importers in china and of course logistics were delayed because quickly the pandemic spread from china to the rest of the world Even when china in may and june recovered from the pandemic countries are like ryan's italy and you were in the depth of the pandemic dot affected global logistics while because we have the latest figures from china customs at a showed import volume declined by thirty percent. Thirty point eight percent to three hundred forty seven million leaders in poor value declined roughly thirty percent as well to u. s. one point eight four billion. This is quite significant. Because i want to joe attention to the fact that last year china's one import value already declined. We saw roughly ten percent job in volume terms and one percent in value terms because of the economic slowdown and trade war between china and was so the downturn. We are saying this year is a continuation of what happened last year as well. So that's you know might have a projection for what is to expect on what's to calm right okay. So next one. I am going to talk about because of the job in wine. Imports and how it affected merchants consumers and the price points are was sane on the shelves merchants of course when you have stalks that are meant to be depleted for chinese new year. That a stew setting in the warehouse. What you do when you have uncertainties facing forward you'll become a more cautious your becoming more cautious with your spending what to buy how to budget. That's natural response. A market exit suddenly. We're seeing a lot of merchants exiting the market. Unfortunately one of the examples with sane is from jovial. Many of you guys familiar with jovial so basically joe view is a wine and agricultural importing company backed by the tech giant nenova. Five years ago when it entered the market to stop two important should be winds. It costs a lot of fanfare and naturally they had the peak around twenty key bruns. Included a the biggest Organic winery madonna in in chile. And also jong here moe's fabulous wines earlier this year due to the pandemic it's general manager said they're suspending the wine business. This is not a small one time importer. we're looking at a company. Dots actually has the scale. That's the direct impact of the pandemic. I'm coffee cards. Of course a lot of wineries and importers were having zero sales in february in particular consumers when you have job uncertainty because of the pandemic what are you gonna do. You're becoming more cautious with. You're spending your accounting or the non essential standings unfortunate wine is counted as numb- essential on like you know maybe in france or italy or in the us consumers of course they're trading down if they are buying winds at all. They are really budgeting what to buy. You know what is the best value. What is the most affordable wine outing the market this can be reaffirmed by the expert on expert data we just from burgundy from january to september export volume to china shop to by roughly thirty percent and in value terms jumped by roughly around twenty percent and we see some increases in areas where Or shop elise. Those kind of increases assertion guan crew premier cru in terms of red and whites that Racing price-wise wines priced under one. Hundred orrin be is the most popular category one hundred. That's about fifteen dollars. So what happened to on trade and why on trade matters like any other. Why importers in in the war in europe or in the us traditional ones heavily dependent on trade on restaurants and bars and hotels to win. The pandemic happened especially in china. Were the strictness of the lockdown is so severe on so carefully scrutinized at enforced restaurants bars were treated during the pandemic on china. We're talking about country that has ten million restaurants chinese new year. Like i said completely shot during the seven day. National holiday dining sector alone lost five hundred billion. That's seventy six billion. Us dollars lockdown. Measure of various strictness were enforced from end of january to april lasting three months. Even in some cases restaurants were allowed to open. Are you can only do delivery service delivery service it go to. It's a growth factor at a hall make makeup for what's lost from in dining services and heidi loud. That's another biggest restaurant chain. China lost to five billion to stirring saint periods just to give you an idea of the severity of on-trade unfortunately among all the alcoholic beverage categories. Wine was hit the hottest. This is not said by me. This is actually coming from one zooming secretary general of china alcoholic drinks association which is the official drinks association in china. That's regulate Anything related to alcohol in china. It's very powerful organ and he basically said homecoming function for wine was essentially non existent as heavily relies on social consumptions such as restaurants to the decline with shoppers. A wong stall too short before giving any thinkers on the decline. But we can guess it's melted doubled. It's not a single digit

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