Australian Wine in the Chinese Market

Australian wine in the Chinese market 1
Aspects relating to the provision of Australian wine in the Chinese market
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Australian wine in the Chinese market 2
Aspects relating to the provision of Australian wine in the Chinese market
Executive Summary
The market available in China offers lucrative opportunities for winemakers from different
nations. More specifically, Australian wine is gaining an expansive clientele in China. The
method used to analyze information for the prospective market of entry was both qualitative as
well as quantitative. The findings obtained from the research indicate that most of the clients to
be catered for are millennials. However, some challenges of the culture affiliated with the region
must be given some consideration. The recommendations relating to the market available in
China is that it would offer the desired prospects for the Australian manufacturer. The challenges
to be anticipated pertaining to the expenses of ensuring that the products on offer reach the
designated clientele within the set time frame. Moreover, additional effort is required to ensure
that clients are able to purchase brands which are more expensive with an Australian origin.

Australian wine in the Chinese market 3
Contents
Executive Summary.........................................................................................................................2
1.0 Introduction................................................................................................................................4
2.0 An analysis of the Chinese general business environment in which a direct investment will
take place.........................................................................................................................................4
2.1. PEST analysis.......................................................................................................................4
2.1.2 Political factors...............................................................................................................4
2.1.3 Economic trends.............................................................................................................5
2.1.4 Social factors..................................................................................................................5
2.1.5 Technological provisions................................................................................................5
2.2 Porter’s forces analysis..........................................................................................................6
2.2.1 Competition (Rivalry in the industry dealing in wine production).................................6
2.2 Advice on location (i.e., country choice)...................................................................................6
3.0 International process..............................................................................................................7
3.1 Uppsala model...................................................................................................................7
3.2 Entry mode(s) the investment should adopt with regards to the Chinese market.................9
3.2.1 Partnership......................................................................................................................9
3.2.2 Acquisition......................................................................................................................9
3.2.3 Franchising.....................................................................................................................9
3.4 Possible cultural/institutional obstacles to the investment..................................................11
3.6 Additional aspects relating to importing wine in Australia.................................................12
3.6.1 Challenges.....................................................................................................................12
3.6.2 Opportunities................................................................................................................13
3.7 The desirability of the objectives.........................................................................................13
4.0 Conclusion...............................................................................................................................14
5.0 Recommendations....................................................................................................................14
6.0 Bibliography............................................................................................................................15
1.0 Introduction

Australian wine in the Chinese market 4
Globally, the demand for wine from consumers has decreased drastically. The five years
which preceded 2017 were marked by an increased supply of wine from different new world
producers. The profits which accrue to the industry depict a 1.1% annual improvement (Cohen et
al. 2017). Hence, the revenue which accrues to the industry is summed at $102.9 billion for five
years before 2017. The industry dealing in Australian wine is ranked fourth globally concerning
its exportation endeavors. Annually, it is estimated that the liters of wine which are exported to
other markets are 750 million in total. The rate at which production is consumed is evaluated at
40% domestically (Lockshin et al. 2017). The market dealing with the exportation of Australian
wine was valued at $2.76 billion as of 2018. The report endeavors to evaluate the aspects which
are to be anticipated with the company's provision of Australian wine in the market available in
China and the hurdles which are to be anticipated.
2.0 An analysis of the Chinese general business environment in which a direct investment will
take place
2.1. PEST analysis
2.1.2 Political factors
China is considered a powerful country economically. The environment available in
China politically is quite stable (Williamson et al. 2018). A system which supports socialism is
opted for in China, and the endeavors that the nation's citizens may choose to engage in are
categorized under the government's mandate. However, the freedom that enterprises are accorded
to conduct their business in China is quite restricted. Even so, some improvements are being
implemented to ascertain that foreign companies can operate in the country. For example, new