China’s Wine Consumption Plunges 25% as Industry Shifts Toward Premium Bottles and Digital Sales

China is working to position itself as a global leader in the wine industry, even as it faces a decline in domestic consumption and growing competition from imported brands. The country’s wine sector is experiencing a period of transition, marked by both ambitious production goals and significant market challenges.

Over the past decade, China saw rapid growth in both wine production and consumption. Industry analysts note that per capita wine consumption peaked around 2012. Since then, the domestic market has slowed considerably. In 2023, the volume of wine consumed in China dropped by nearly 25 percent compared to the previous year. Despite this downturn, China remains a major player on the world stage. Retail wine sales are expected to reach about $26.8 billion in 2024, underscoring the country’s continued importance for global producers.

China is not just a large consumer; it is also investing heavily in its own wine production. The Ningxia region, located in north-central China, has attracted international attention for its vineyards and wineries. Producers there are working to match the quality and reputation of established regions like Bordeaux. At a recent tasting event in Shanghai, French wine critic Michel Bettane praised Chinese wines for their technical precision, even suggesting they have surpassed some French wines in this regard. Bettane highlighted Ningxia’s Cabernet Sauvignon as a standout example of China’s progress.

The scale of China’s wine industry is one of its main advantages. The country now has vineyard acreage comparable to that of leading global producers. However, size alone does not guarantee commercial success. Chinese wineries still face challenges related to quality, brand recognition, and consumer perception.

On the import side, China has been reducing its purchases of bottled wine from abroad. This trend accelerated during the pandemic and amid ongoing trade tensions with countries such as Australia and the United States. Today, France, Chile, and Italy dominate the imported wine market in China. For Chinese producers, this means they must compete not only on price but also on brand image against well-established foreign labels.

E-commerce has become a crucial sales channel for wine in China. More than half of Chinese alcohol buyers now use online platforms like Tmall and JD.com—far higher than in other major markets. Online wine sales are projected to grow by about 8 percent annually through 2027. This shift favors producers who can reach younger, digitally savvy consumers.

Consumer preferences in China remain distinct from those in other countries. Red wine accounts for about 95 percent of all wine consumed domestically, far outpacing white, rosé, or sparkling varieties. There is also a growing demand for premium wines, which has led to higher prices per liter even as overall consumption falls.

Chinese wineries are focusing on improving quality and building strong brands to move beyond competing solely on volume and low margins. The government has supported these efforts by encouraging modernization and sustainable practices within the industry.

For foreign producers, China continues to offer significant opportunities—but with new challenges. Success increasingly depends on offering high-quality products, adapting marketing strategies to local tastes, and maintaining a strong digital presence.

Risks remain for all players in the market. A further drop in domestic consumption or an economic slowdown could hurt sales, especially if consumers cut back on luxury goods like premium wines. Competition from other beverages and changing consumer preferences toward healthier options also pose threats.

China’s wine market is at a crossroads: it offers promise through expanding domestic production and digital innovation but demands adaptability from both local and international producers. The future will likely belong to those who can combine scale with quality and connect effectively with consumers online in this evolving landscape.