Consumer groups and market potential
Xi’an, located in China’s inland area, is somewhat less developed comparing to coastal cities, so its purchasing power is relatively weaker. Consumers’ acceptance of products is also affected by regional culture. For example, it is cold in Northern China, so people there tend to drink more spirits. Since wine is of lower alcohol content, its market development process in Northern China is relatively slow.
But in the mean time, Xi’an has been booming in recent years, so the purchasing power of local consumers has been rising along with the economic development. Moreover, regardless of age and social class, consumers’ desire for healthy and high-quality life is consistent, so the potential of the local market is still great.
Xi’an is actually a very interesting market to comment on. Currently, Xi’an has more than 10 million people, but when you compare to 2016, the city only had 8.5 million people, and what we are anticipating is that by the end of 2021, Xi’an should have over 12 million people. The 3 to 4 million new inhabitants are mostly graduates from good universities. So in a lot of ways, Xi’an is a young market that has a lot of growing potential.
Features and market share of popular products
Although wines produced by famous wineries are relatively pricy for this region, they still take a large local market share, mainly because of the popularity of the winery brands and their rich cultural traits. Since the wine culture is profound, consumers who are not familiar with wine tend to choose products of famous wineries such as Chateau Lafite or Chateau Latour. Comparatively speaking, consumers might choose smaller wine brands till they have more knowledge and understanding of the brand culture.
The biggest competitors for Canadian wine would be the old-world wine, which we are talking about France or Italy. People tend to buy in to the story that the old-world wine tends to be better. Xi’an is an immature market in many ways, so people do tend to go for the safer way in choosing their products that are produced in traditional wine-production countries, like France and Italy.
Canada is part of the new world wine region. Compared with that of the old world, wines from the new world are softer, fruitier, more balanced in acidity and higher in alcohol content, which could be more popular in the northwest. Canadian ice wine is very characteristic and renowned. Consumers around Xi’an like ice wine because of its sweet taste, which is very much in line with the taste choices of people in Northern China, and it is also easy to match with food, such as desserts.
Ice wine is Canada’s national wine with a long-lasting culture, so it is easy to be accepted by local consumers. But ice wines are relatively expensive, which limits consumers’ choices.