Entry Report to Chinese Wine Market
Executive Summary
This report discusses all of the relevant aspects relating to the entry of Dorrien Estate wines into the Chinese market. In the course of due diligence, this report outlines all relevant information required for entry to a foreign market.
The uncontrollable factors such as the Chinese economy, political climate, technological, socio-cultural and legal factors are first extrapolated showing that China is the second largest economy in the world and plays an influential role in the global economy. The robust economy has given rise to high levels of disposable income, leading to increased demand for foreign products, and in particular, Australian wine. Politics and the economy are closely inter-related, with the Chinese socialist market economy being governed by the Communist party of China, which may pose certain political risks for a foreign organisation entering the market. Chinese business practices are also interwoven with socio-cultural elements highlighting that the Chinese seek to form close personal relationships with trading partners. A hybrid legal system that is difficult to navigate, coupled with difficult distribution infrastructures may pose as barriers to entry for foreign organisations.
The report also delivers a market audit, showing that there is a potential 250 million consumers spread across six distinct market segments. Cultural attitudes reflect that wine is seen as sophisticated and represents images of luxury and decadence, driving consumption. Three Chinese companies hold a 90% share of the market, with the remaining 10% held by foreign entities. Distribution and transport of wine is predominately controlled by a small set of distributors who have access to on-trade and off-trade distribution channels. Foreign wine is commonly priced between AUD$14-66 per bottle, and all major competitors use a mix of advertising such as TV and print and promotional activities such as trade shows, wine competitions, in-store promotions,
This report discusses all of the relevant aspects relating to the entry of Dorrien Estate wines into the Chinese market. In the course of due diligence, this report outlines all relevant information required for entry to a foreign market.
The uncontrollable factors such as the Chinese economy, political climate, technological, socio-cultural and legal factors are first extrapolated showing that China is the second largest economy in the world and plays an influential role in the global economy. The robust economy has given rise to high levels of disposable income, leading to increased demand for foreign products, and in particular, Australian wine. Politics and the economy are closely inter-related, with the Chinese socialist market economy being governed by the Communist party of China, which may pose certain political risks for a foreign organisation entering the market. Chinese business practices are also interwoven with socio-cultural elements highlighting that the Chinese seek to form close personal relationships with trading partners. A hybrid legal system that is difficult to navigate, coupled with difficult distribution infrastructures may pose as barriers to entry for foreign organisations.
The report also delivers a market audit, showing that there is a potential 250 million consumers spread across six distinct market segments. Cultural attitudes reflect that wine is seen as sophisticated and represents images of luxury and decadence, driving consumption. Three Chinese companies hold a 90% share of the market, with the remaining 10% held by foreign entities. Distribution and transport of wine is predominately controlled by a small set of distributors who have access to on-trade and off-trade distribution channels. Foreign wine is commonly priced between AUD$14-66 per bottle, and all major competitors use a mix of advertising such as TV and print and promotional activities such as trade shows, wine competitions, in-store promotions,