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Bordeaux wine to China
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BORDEAUX WINE:The Chinese Opportunity
I – Demographics & Economics
II – Doing business in China
III – Chinese concept of Time
IV – Wine market analysis
V - Our recommendations
AGENDA
Demographics & Economics
Social and demographic
figures
Population: 1.338 Billion people
Age: 35.2 years (Total)
Urban Population
: 43%
Education investmen
t: 1.9% GDP
GDP/Capita: US$ 6.600
Gini Index: 41.5
Social and demographic
figures
Labour Force per sectorsAgriculture:
39.5%industry:
27.2%services:
33.2%
GDP - composition by sector: agriculture:
10.6%industry:
46.8%services:
42.6% (2009 est.)
Age repartition:0-14 years:
19.8% 15-64 years:
72.1%65 years and over: 8.1%
Life expectancy: rank 108 in the world;
Total population:73
.47 years
Economics key facts
Inflation: -0.7% in 2009
Disposable Income:
US$ 2,258
Balance of Trade: US$
297.1 Billion 2009
Public Debt: 16.9 % GDP
Unemployment: Official (urban)
=> 4.3% ; Unofficial
(rural)=> 9%
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2.80
GDP/Capita in $ US Population in Million People
GDP per Capita in Cities and urban Areas
1 October 1949 (People's Republic of China established)
Chinese Communist Party or CCP [HU Jintao];Eight registered small parties controlled by CCP
No opposition or politic group of pressure
President HU Jintao since 15 March 2003
Politic & Government
Doing Business in China
Confucianism: concept of harmonious
relationships respect and loyalty
Face: Diu-mian-zi Gei-mian-zi Liu-mian-zi Jiang-mian-zi
Meeting & Greeting: shaking of hands + slight nod of the head
No physical contact in business
Body language
DOING BUSINESS IN CHINA
Business Cards
Gold characters = positive color: fortune + luxury Hold the card in both hands when offering it, Chinese side facing
the recipient
What to Wear?
Dark colored, conservative business suits Women should wear flat shoes or shoes with very low heels Bright colors should be avoided
DOING BUSINESS IN CHINA
Meetings and Communication
Intermediary Very formal: avoid humor & politics Be patient: trust + bureaucracy Rank is very important is business
relationship Prefer face to face meetings 45 % of business managers are women
DOING BUSINESS IN CHINA
Business Meeting Etiquette
Appointment in writing (English + Chinese – no colors) Punctuality = respect / Arriving late = insult Insist on long term benefits Only senior members will speak Slow pace They never say no Tough negotiators: Their primary aim in negotiations is
'concessions‘ Don’t use high pressure tactics
DOING BUSINESS IN CHINA
The Chinese concept of Time.
CHINESE CONCEPT OF TIME
China = polychronic country Cyclical concept of time
Luni-solar calendar Gregorian calendar
CHINESE CONCEPT OF TIME
Time = change and movement of the material and natural world
Time is more elastic than in Western countries
“Shi” = “time”Not the exact definition.It is the good moment to act.
CHINESE CONCEPT OF TIME
China conception of time is past oriented (values/ family)
In Chinese chronologies, time is not counted from a single date, such as the birth of Christ.
Dedicated to long term goals
HOW CHINESE CONCEPTION OF TIME WILL ESTABLISH GOOD
BUSINESS RELATIONSHIP:
Time = High Value « Time is not money » Be patient Be always ponctual Give priority to long term relashionship
Wine market analysis
Biggest productors of wine in China :
1 Changyu Wine Group Co Ltd 2 Greatwall Wine Co 3, Yantai Weilong Grape Wine Co 4, Dynasty
Production of wine in China
China has around 400.000 hectares of vineyards.China is 11th producer
8th vineyards in the world in terms of area
Some facts about the consumption of
wine in China
Honk Kong wants to be the center of the wine market in Asia.- No taxes on wine- No taxes on added value
8th world consumer with 3,6 liter per capita and per year
First wine market in Asia with 70% of wine consumed in Asia.
2010 Today China represents
less than 7% of the consumption in the world
150 millions of consumers in China
It represents a market of 7 billion $ for a total of 153 billion $.
The consumption in the
future
Total wine consumption in China in 2013 would be 1.26
billion of bottles.
25% of growth in Asia (70% in China)
Consumption of 100 millions crates of 9 liters by year.
7th World wine market
Forecast 2013
Importations of wine in China
France represent 42% of the importations
Top 10 French red wines imported:- Château Lascombes- Lestrille Capmartin- Château Haut-Brion- Château Pétrus- Château La Croix David- Clos des Cortons Faiveley- Château Ferran- Echezeaux
2006/2009: 480% of increase
Australia is 2nd provider of China.
Today it represent 10% of the total consumption but it will reach 16% in 2013
OUR RECOMANDATIONS
Importing Wine in China
OUR TARGET
Middle class : Superior level of education : 150 million people
Young women or men living in city Young couple Officials
Richest class : 22 million people
Foreigners
MARKETING MIXObjectif : China
PRICE
High prices due to transport costs and high
import taxes (14%)However, increase of
competition, alignment of prices
PROMOTION
Luxurious packaging
Education of consumers
PLACE
Coffee, Hotel And Restaurant
Focus on East CoastFrench product
specialization shops
PRODUCT
Focus on Red Wine (67% of consumption)
OUR STRATEGY
Focus on Red Wine (67% of consumption)
Focus on Hotel, Coffee and Restaurant (65% of sales)
Insure a luxury image of our products (ostentatious consumption)
Partnership with CIVB : Set up of Wine degustation in strategic places
Partnership with Chinese government
CONCLUSIONEconomy /Social
• Upper Middle class growth (21,2 % by 2015)
• GDP & GDP/capita Growth
• Political stability
New market : new
opportunities
• 150 millions potential consumers
• Good perspectives for wine consumption (1,26 bottles consumed in 2013)
• Luxurious and renowned image of french products
• Understand business manners
Success
• Long term vision
• Relieve the lack of informations of consumers about wine with partnerships.
• Success in China = first step to succeed in Asia
Sources www.tradingeconomics.com www.economics.com The World Bank www.idealwine.net www.ciafactbook.com www.ca-vinexport.com
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