Cheers in China! Spanish Wine in the Chinese Market

Tuesday, March 5, 2019 - 17:00

TBS marketing professors decode the internationalization strategy of Spanish sparkling wine producers in China

cava-in-china

"Catalan cava companies have managed to decode and penetrate the Chinese market," said TBS Barcelona professors Noelia Jiménez-Asenjo and Diana Filipescu. According to their study Cheers in China! International marketing strategies of Spanish wine exporters, in order to achieve this they have had to adapt the marketing policy they had applied in other countries.

"Although they maintain the brand and the characteristics of the product, they have adapted the price and distribution to the Chinese market," explains Jiménez-Asenjo, who has explored the internationalization strategies in the Chinese market of six cava companies: Freixenet, Codorniu, Juvé i Camps, Mestres, Sumarroca and Raventós Rosell. 

Standardization or adaptation

"Unlike cases such as that of Oreo cookies, which sells differently flavored products depending on the international market, the companies producing Catalan cava did not alter their product in any of its characteristics. In the same way, the name of its brand and its presentation remained unchanged, "says Jiménez-Asenjo.

However, a peculiar case is that of the price. "A bottle of Freixenet cava can cost around €7 in Spain. In China, the positioning of sparkling wine is that of a luxury product, and therefore the price must adapt to this perception. A bottle of Freixenet can cost the equivalent of 50 dollars there" explains Filipescu

Finally, regarding the distribution networks, Filipescu also comments that "the infrastructure in China is less developed than in the country of origin of the analyzed companies, and it is essential that they adapt to it and to its intermediaries, on whom they depend a lot".

Sparkling wine with instructions for use

"The consumption of wine, and especially sparkling wine, in China tends to occur sometimes for a mere appearance in order to get closer to Western society. Sometimes they buy certain brands of wine because of the packaging, but they do not consume them or they do so in bad conditions; they do not know that it has to be cooled, for example”, says researcher and marketing professor Jiménez-Asenjo. "This holds back consumers from repeating their choice, becoming an important barrier to internationalization."

The possible solution comes from France: "French companies provide knowledge on champagne and how to consume it, and Catalan cava companies are taking advantage of the market opening that this entails and, although the process of change will be slow, this strategy could reverse this problem ", concludes Jiménez-Asenjo.

New competition and new markets

"Traditionally”, says Noelia, "the main wine producing countries were France, Italy and Spain. Today, countries or regions of the world such as Chile, Argentina, California, New Zealand or Australia also export quality wine worldwide”. This growing competition (the so-called ‘new world producers’) is encouraging Spanish companies to find new horizons for export.

"China is one of the countries that is currently making the most progress in the wine market. It is increasing GDP and consumption, which makes the country a very popular destination for exports ", explains Noelia Jiménez-Asenjo. Many companies found their next goal in China, but they were failing to establish themselves in the market.

 

Publications referenced in this article:

Jiménez-Asenjo, N.; Filipescu, D.; Cheers in China! International marketing strategies of Spanish wine exporters, International Business Review, February 2019.

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