Following China’s prestige-dominated first wine era, the decade of the 2010s saw a developing culture of wine as a daily drink and a gift at important festivals. Consumer attitudes toward wine may have shifted in the long run as a result of Covid’s restrictions on socializing, especially family functions.

What has changed in the Chinese wine market during the last 12 months? The indications appear to be heading in opposite directions at first look.

As China clamped down to combat the Covid-19 virus, social interactions were reduced and customary giving celebrations, such as Chinese New Year, were effectively cancelled, the volume of wine consumed in 2020 was considerably lower than in prior years. According to IWSR data, wine volumes in China decreased by about 20% in 2019-2020, with the volume of imported wine dropping by more than 30%.

Despite this, according to Wine Intelligence’s consumer usage and attitude data, the underlying remembered behavior of imported (as well as domestic) wine drinkers in China – a population of over 50 million people – showed remarkably little change in 2021 compared to previous years. Reported on-premise wine consumption declined in 2020, as expected, but has already rebounded in 2021.

So, how can there be a huge decline in the volume of wine drank in China while there is no discernible adjustment in the frequency with which people consume wine? This sudden and dramatic divergence in metrics that had previously been aligned and are based on rigorous and consistent methods suggests that we are witnessing another watershed moment in Chinese wine consumer behavior, similar to the decline in prestige wine usage after 2013, and the rise of the Millennial-led’regular’ wine drinker from 2015 onwards.

In actuality, China’s wine market has always been split into two segments, with some overlap. One is the regular, habitual wine buyer, whose purchases represent a wide range of wine events both at home and away from home. “This typology is often urban, educated, affluent, and international in outlook,” says Richard Halstead, COO Wine Intelligence. “Their behavior shows evident similarities with consumers in developed wine markets – wine drinking is at least a monthly, if not weekly, occurrence.”

Wine Intelligence predicts that over 55 percent of the more than 50 million semi-annual imported wine drinkers consume imported wine at least once a month. This monthly drinking population represents about 6.5 percent of the urban population aged 18 to 54, but just 2.5 percent of all Chinese adults. To put this in perspective, China’s monthly wine drinkers are around the same size as the UK’s monthly wine drinkers, or a third of the US’s monthly wine drinkers.

The second’market’ for wine in China is much larger – and far more vulnerable to the winds of fashion, politics, and circumstance. This is the percentage of Chinese adults who buy wine once or twice a year as a present or for a special social occasion. These festivities usually coincide with key Chinese calendar dates such as Chinese New Year, Mid-Autumn Festival, and the increasingly famous Singles Day on November 11th, when single people are celebrated and gifts are purchased, mostly online. During these periods, the wine category sees a significant increase in sales from those who would not ordinarily buy wine.

This enormous cohort of infrequent wine buyers looks to be driving the major change in volume in 2020. When one considers the pandemic’s tremendous disruption of event-based socializing in China, as well as the similarly large “bullwhip” effect of a very big population doing something slightly different for a period of time, this makes sense.

So, what does this imply for winemakers? Unless there is a significant shift in government policy toward alcohol, the wine market will continue at similar, lower volume levels than it was at its peak in the mid-2010s. With more experienced and regular customers driving volume, there will be even less place for low-quality products and obvious counterfeit wines, both of which are already on the wane thanks to the shift in wine shopping to e-commerce, where negative reviews can destroy reputations. More positively, as regular customers begin to extend their palates, there will be more room for less well-known genres, origins, and locations, notably higher-quality domestic wines.