My OperaExporting Wine to China
Friday, March 23, 2012 8:59:50 PM
China is one market that any exporter should not ignore. The United States, being one of its major trading partners, has recently increased its presence in various businesses that caters to domestic demand for consumer goods and services from the west, hence the explosion in exporting wine to China, agricultural products, and even retail.
China is presently in the middle of structural reforms affecting both its economic and political structure of government. Problems on income disparity, corruption, and social discontent are now being addressed by the political leadership to hasten China’s stimulus package for good governance.
With the political leaders on top of the situation, a sustainable development model for China can be expected to come to fruition, and help propel the country to becoming an economic power in the 21st century.
A World Bank Report entitled ” China 2030: Building a Modern, Harmonious, and Creative High Income Society” has been undertaken in coordination with the Development Research Center of China’s State Policy which laid down the groundwork for China’s development plan in the next twenty (20) years.
With this development happening in China, the economy is expected to grow at an exponential rate with expectations of its markets opening more towards freer trade. For exporters, this will help alleviate the already complicated process of exporting wine to China.
With the emergence of an expanding middle class and an already established “ultra-rich” community, many luxury items and brands are now entering the market from many countries. However, exporting wine to China can be a lucrative business option for any businessman. Wine exporting to China is a rapidly growing industry. Businessmen can can do brisk business selling wines to the more affluent sections of society and the emerging middle class. Red wines are popular making up 90% of the market, with white wines coming in second and growing each year. The typical market profile are young urbanites between the ages of twenty (20) to thirty-five (35).
The production of wine in terms of domestic output, falls beyond the expected growth rate of the target market, thereby opening opportunities for exporters from the United States to tap into this market. In the years 1995 to 1996 alone, exports of wine to China had grown to 500 percent from initial levels of US$200,000.
There is stiff competition from domestic wines that sells 50 to 80% lower than imported wines. The price difference is attributable to stiff import tariffs and taxes imposed by the government.
Aside from tariffs and taxes, other problems that have to accounted for are import restrictions and quotas, safety regulations, packaging and labeling laws, and currency restrictions, among others. all of these things must be accounted for when exporting wine to China.
There is now a new mode of market entry to tap China’s market. This would be in the form of joint venture arrangements to jumpstart operations and hasten the process of income generation. This has been successfully done by a French vintner who was able to generate sales of 500,000 bottles under this arrangement. With joint venture, sales is expected to hit 5 times its present levels in three years time.
With China’s booming economy, and its yet untapped growing market, American vintners have every reason to ride the Asian Dragon on its way to the 21st century!
Exporting Wine to China
China is presently in the middle of structural reforms affecting both its economic and political structure of government. Problems on income disparity, corruption, and social discontent are now being addressed by the political leadership to hasten China’s stimulus package for good governance.
With the political leaders on top of the situation, a sustainable development model for China can be expected to come to fruition, and help propel the country to becoming an economic power in the 21st century.
A World Bank Report entitled ” China 2030: Building a Modern, Harmonious, and Creative High Income Society” has been undertaken in coordination with the Development Research Center of China’s State Policy which laid down the groundwork for China’s development plan in the next twenty (20) years.
With this development happening in China, the economy is expected to grow at an exponential rate with expectations of its markets opening more towards freer trade. For exporters, this will help alleviate the already complicated process of exporting wine to China.
With the emergence of an expanding middle class and an already established “ultra-rich” community, many luxury items and brands are now entering the market from many countries. However, exporting wine to China can be a lucrative business option for any businessman. Wine exporting to China is a rapidly growing industry. Businessmen can can do brisk business selling wines to the more affluent sections of society and the emerging middle class. Red wines are popular making up 90% of the market, with white wines coming in second and growing each year. The typical market profile are young urbanites between the ages of twenty (20) to thirty-five (35).
The production of wine in terms of domestic output, falls beyond the expected growth rate of the target market, thereby opening opportunities for exporters from the United States to tap into this market. In the years 1995 to 1996 alone, exports of wine to China had grown to 500 percent from initial levels of US$200,000.
There is stiff competition from domestic wines that sells 50 to 80% lower than imported wines. The price difference is attributable to stiff import tariffs and taxes imposed by the government.
Aside from tariffs and taxes, other problems that have to accounted for are import restrictions and quotas, safety regulations, packaging and labeling laws, and currency restrictions, among others. all of these things must be accounted for when exporting wine to China.
There is now a new mode of market entry to tap China’s market. This would be in the form of joint venture arrangements to jumpstart operations and hasten the process of income generation. This has been successfully done by a French vintner who was able to generate sales of 500,000 bottles under this arrangement. With joint venture, sales is expected to hit 5 times its present levels in three years time.
With China’s booming economy, and its yet untapped growing market, American vintners have every reason to ride the Asian Dragon on its way to the 21st century!
Exporting Wine to China
