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VOL.3 September 2011
Success Through the Grapevine
How one wine importer has become dedicated to supplying China with superior quality South African wine
by Yu Nan

According to Si, Sun & Diamonds specializes in middle-to-high-end wine at more affordable prices. For example, table wines from South African wine estates, that are often placed on their distributors' order lists, are about 100 yuan ($15) a bottle. "Also, we introduced Alto wines, the most widely recognized wine across South Africa as well as internationally, to China," he added.

South Africa wine is becoming popular in the Chinese market. According to the data from the South Africa Wine Industry & Information System (SAWIS), South African bottled wine exports to China increased by 60 percent from March 2010 to March 2011.

Over the years, China has seen its consumption of wine increase. The figures show that the volume of wine consumed in China doubled from 2005 to 2009. SAWIS also forecasts that China's wine market will continue to grow in value and will reach $6 billion by 2014. The number of wine drinkers will rise to about 34 million by 2015.

The booming Sino-South African wine trade, along with Sun & Diamonds' dedication and passion, has seen the company's wine sales rise within a short period of time. "We had imported in total of 10 20'GP containers [of South African wines] in 2010 only one year after we started the wine business, all of which were soon sold out," Si told ChinAfrica.

Si said that both the elite communities and middle and upper income white-collar workers mainly share the love of their top wines. This is especially prevalent in top-tier cities such as Beijing, Shanghai and Guangzhou. The remaining orders come from the companies engaged in Sino-African economic and trade activities, which range from gift giving, festivals, as well as large-scale receptions for business events.

Despite the wine-drinking population in China growing fast, Chinese people have their own preferences in wine consumption. For example, some consumers prefer wines with a soft rich texture that is full of a fruity flavor, according to the wine importer.

Apart from South African vineyards, the company has also cooperated with some local wine exporters to meet different needs in taste. Martyn Mills, President of MCM Wines, a renowned wine company near Cape Town, is one of Sun & Diamonds' close partners.

Mills is a pioneer in making South African wine available in China. He said that there is a limited portfolio of South African brands in the Chinese market, and those brands actually have done very little in promoting wines of South Africa.

"South African wine producers must understand China's language, culture and tastes, if they want to expand their market shares further," he said, suggesting that a good choice is to find local wine distributors or importers responsible for sales in China. Sun & Diamonds has helped Mills make his time-honored wine brand from the Constantia region available in the Chinese market for years, with sales steadily rising.

 

Discover the glamour

Due to the economic recession, a decline in demand had resulted in some South African producers to withdraw from the traditional export market, such as the UK. However, demand from China, a new market, was encouraging.

Therefore, experts from the Johannesburg-based Standard Banks Group Ltd. suggest that South African wine producers need to look at increasing exports to China as the country is set to become the seventh largest consumer of wine by 2012.

However, Si believes that the Chinese wine market may be overestimated.

He said that wine consumption awareness is still quite low in China. Premium wine, for example, is more likely to be purchased as a gift item rather than for personal consumption. And also, overall sales of South African wine remain modest.

"The South African Government should be doing more to support wine exports while South African businessmen should launch efforts to promote their brands regularly in the Chinese market," he added.

At its current stage, the company's top priority is to expand their market presence and identify potential customers, instead of solely focusing on making money. "We are planning to open another wine store, occupying over 100 square meters next year, about 10 times the floor space of the current one. This is in order to enable more Chinese consumers understand and discover the glamor of South African wine."

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