The Director of Bankia"s Office for Representation in Shanghai, Jesús Miramón, wagers on taking advantage of the opportunities that this country with more than 100 million current consumers of wine has to offer
FENAVIN, which is set to take place in Ciudad Real from May 12th to the 14th, will be counting with the participation of Jesús Miramón, Director of Bankia"s Office for Representation in Shanghai, who will be imparting the conference: The Wine Market in China: An Opportunity for Exportation. This activity will take place on May 15th at 1.15 pm and will be framed within the program Foreign Trade and Economy, which has been promoted by the National Trade Fair on Wine throughout its eight editions.
As an expert on the operation of the commercial system in China, Jesús Miramón highlights the opportunities provided at FENAVIN in order to bring his knowledge to the professionals of the wine growing sector. In his opinion, "it is a point of reference for the Spanish wine industry, with presence of more than 5300 buyers from 65 countries and which has represented a magnificent platform ever since the very first edition of FENAVIN for the wineries and cooperatives that are tentatively looking towards foreign markets".
The Opportunities of the Chinese Market
The Chinese market represents a future wager for our wines. During the last 20 years our country has undergone unprecedented economic growth that has given rise to a significant capacity for consumption and a growing interest in the lifestyle of western society. China"s middle class will have surpassed a population of 500 million by the year 2020, which is the total population of the European Union.
Consumption of wine has experienced significant growth in the last few years and it is expected that in the 2015-2017 period it will grow an additional 30%. In the year 2013 China became the greatest consumer of red wine in the world, surpassing France, Italy and the United States. Currently 100 million Chinese are habitual consumers of wine. Notwithstanding, per capita consumption in China is still quite low –only 1.15 liters- if compared with the 46 liters of France or the 21 liters of Spain. Taking into account that 40% of consumption of spirits in the world corresponds to China, there is a fabulous opportunity for those companies that wager on participating in the development of this market.
Spain is currently the fourth most important exporter of wine to China. Wine sales in our country are only surpassed by the sales of France, Australia and Chile. During the 2003-2012 period total imports of wine have grown steadily in China, at an average rate of an annual 60%. However, the local authorities took a series of measures in the year 2013 –such as the limitation in public spending on celebrations and the beginning of the anti-dumping procedure against European producers- that reduced imports to less than 4.40% in that year. In the year 2014 total imports cautiously grew again (+1.86%) and it is expected that they will continue to do so in the next few years.
Overcoming Cultural, Political and Economic Barriers
However, access to the Chinese market for foreign wines is anything but simple. To the tariffs and taxes that burden importing and consumption we have to add the strict standards for labeling, plant health barriers and a complex system of logistics pertaining to importing, distribution and brand registration. Miramón highlights the fact that "this is a cultural scope and a business environment that is very different from the European system, as is the case with the limited local financial system, this in as far as the support that can be offered to foreign companies, which exacts an additional effort from our wineries. Adequate preparation, sufficient financial capacity, in-depth knowledge of the local market and a good dose of patience are all necessary if we want to take advantage of the opportunities that the Chinese market has to offer".
Advantages for Commercialization
The financial institution Bankia offers an advisory service to Spanish companies in their foreign activity, and more specifically, to the wine growing sector. This way it puts all the means at their disposal in order to ensure that they feel secure when they decide to take business abroad and take advantage of the opportunities to be found in exporting. Because the most important thing is not only selling, but getting paid for what is sold. Hence, motivated by this interest, Bankia offers companies a series of different lines and financing schemes that are individually adapted to the specific needs, applying mitigating factors to the financial risks associated to any sale that takes place abroad. Bankia"s office in Shanghai contributes to improving this preparation and facilitating the entry to the Chinese market, orienting each company on the scope, uses and local practices, and helping them choose the financing program and strategy that is most adequate to each case, working with the local banking institutions, this whenever necessary.