SHANGHAI (Reuters Life!) - Following the explosion in demand for designer bags, Italian suits and fast cars, expensive French and Italian wines are set to be the next must-have accessory for the wealthy Chinese consumer.
Wine bars are proliferating rapidly in Shanghai, the country’s glitzy financial capital, where young Chinese professionals congregate after work and regularly splurge around 1,000 yuan ($152) on a bottle of wine.
“Chinese people are very aspirational and materialistic so once they have bought the best local brand then they start looking for something even better and more expensive,” said Ch’ng Poh Tiong, wine columnist and publisher of The Wine Review publication, based in Southeast Asia, Hong Kong and China.
While China has a growing domestic wine market, industry experts say it is more fashionable to drink wine made abroad and predict consumption will double within the next five years.
Favorites include wines from French estates Chateau Lafite Rothschild, which starts around $1,000 a bottle, and Chateau Latour.
“There are at least two layers of wine appreciation in China. If the person is buying and serving the wine to say thank you very much for someone who has done them a favor, then there is a social going rate which means they will pull out the expensive wine,” said Ch’ng.
“Then you have the same person drinking with friends and family and there is no more status attached to the bottle of wine.”
Wine aficionados say that wine consumption in the mainland has grown in double digit figures over the last 10 years, triggering strong incentives for winemakers and companies to target the lucrative Chinese market, set to strongly outpace Western demand in the coming years.
Chateau Lafite Rothschild has incorporated the Chinese character of the number eight on its vintage 2008 bottles, set to ship in 2011.
The winemaker has not only used the auspicious number “eight” but also the color red, considered lucky by Chinese custom, to help boost sales.
Chateau Mouton Rothschild has used a design by Chinese artist Xu Lei for its 2008 vintage bottle.
In cosmopolitan cities such as Shanghai and Beijing, there is also robust appetite for wine as an investment class.
Tim Tse, of the House of Roosevelt, a private wine cellar and vault in Shanghai, said a select proportion of wealthy Chinese were increasingly starting to collect expensive wine.
“People in Shanghai don’t only drink the wine but they are making an investment in wine. People appreciate wine far more than before. It seems like they have been studying and doing tours in the Burgundy area,” said Tse, President of Roosevelt China Investments Corp.
Despite this, experts note that many people are drinking expensive wine simply because it is expensive, rather than appreciating the taste.
Vivian Tian, Chief Sommelier at the Waldorf Astoria in Shanghai, said the majority of Chinese consumers were still far behind their western counterparts in understanding and appreciating wine.
“The Chinese population is huge, we are still in a developing phase. They are not sophisticated. I don’t know how many years China will need,” she said.
For the majority of young Chinese professionals, kitted out with their iPads and designer suits, wine is just the latest way to display upward mobility in the increasingly consumer driven society.
“The key in Shanghai is, it is fashionable to drink wine. Every year the growth rate should be double digit, there is no question about that,” Tse said.
Editing by Elaine Lies