The Chinese food and beverage market is currently the second largest market in the world. China is a growing economy and it is growing consistently, it has also provided a wide scope for other countries for entering the market of China. It gives an excellent opportunity to the wine manufacturers of New Zealand. As per the forecast of future trends, the figures show that in the future there will be a huge demand for wines in imported wines, it gives a very favorable situation for Kiwi Prestige (Camillo et al., 2014).
The Chinese wine industry is a booming industry and even Government is giving boost to this industry. The Chinese Government is although making some stringent laws simultaneously it is also promoting import of quality products. The support from the Government makes it possible for the exporters operate easily in the country. Political instability and problems with the importing country might cause some problems, as of now there are no such problems so Kiwi Prestige
Presently the Chinese market is very lucrative. The purchasing powers of people has increased, the rapid speed of development has increased the customer base of imported wines. In the last five years there has been a hike 106 percent in the wine consumption statistics. The imported wines constitutes to 20 percent of the complete wine market. Right now both the local and the international marketers tapped only 60 percent of potential market (Sun & Wong, 2015).
The Chinese were never known for drinking wine, but in order to adapt to the modern lifestyle the people are slowly showing their openness towards drinking wine, nowadays it is being consumed in both social and business events, so people have opened towards consumption of wine. The increased number of working class is continuously changing the lifestyle of people; they can now afford to buy imported wines. People travel throughout the world that makes them more aware and open towards accommodating to a new lifestyle and they choose this (Reynolds, 2015).
The technology that is used in wineries have advanced largely, they are giving a tough competition to the exporters. Still a significant market share is held by the international suppliers because of the quality of wine that is being imported, so the technology used by New Zealand wine makers are much more than the Chinese makers and this is the reason why imported wines are in huge demand in china (Muhammad et al., 2014).
There are few rules and regulations like other countries have, these regulations are related to the entry norms that is to be adhered by any marketer who plans to enter in to the Chinese wine market. There are many options available to the New Zealand traders who want to enter into china, they can, they can enter as a wholly owned enterprise or they can also look for joint ventures with any existing local company (Wu, 2016). There are some legal formalities required for non- European countries like New Zealand for exporting their wine products in the country. If the Chinese subsidiary wants to handle customs themselves then they will have to register as a Foreign Trader after they have established themselves in the country. Since wine belongs to food and beverage, industry it has to go through a number of administrative norms, food and safety norms which the company need to pass (Ho, 2014).
China has reduced the tariffs for all its agricultural products from 21.2 percent to 15.3 percent. Earlier the tariffs on some of the key products of China were comparatively higher as much as 65 percent. The free trade negotiations have helped a lot in this regard (Bano, 2014).
The Climate change on the global level is a challenging issue for all the countries, it also affects the wine industry, as the viticulture and wine production is affected by it.
The impact are very much variable, the factors related to climate like temperature, precipitation and the days without frost affect the wine yields. China is one of the largest wine producing countries making hence the local producers are giving tough competition to the New Zealand producers (Mozell & Thach, 2014).
Impact of Macro environment
The main reason behind the increase in demand of the New Zealand wine is the strong economic growth in China, which is making the people change their lifestyle. The main market hubs of the wine market in china are Beijing, Shanghai, and Guangzhou. The wine industry of China and the macro environmental factors are very much favorable for the Wine producing firms like Kiwi Prestige, they import the wine products in a very smooth manner as there is a lot of demand for imported wine from countries like Australia and New Zealand. Although there are certain factors that cannot be relied upon, like the political conditions, which are highly unpredictable and might keep changing with the change in the Government. It is possible that the new government might come up with certain policies that are not favorable for the wine producers of New Zealand (Cohen et al., 2017).
Climatic conditions can act both in favor as well as against the wine producers of New Zealand. Because if the climatic conditions of New Zealand is not good for wine production then the supply to China might be hindered making it difficult for Kiwi Prestige to export their wine products to china. On the other hand if the climatic conditions of china are not favoring good wine yields then they will have to depend on imports and this will be an opportunity for Kiwi Prestige to grow their market in China (Bo Liu et al., 2014).
The Wine production industry of New Zealand is presently much better than china because of the technologies used by the producers, this is because this industry is quite old in New Zealand but in China it is a newer concept, still the local producers are giving tough competition to wine producers like Kiwi Prestige. The European producers pose a significant amount of threat as well because, the Chinese consumers prefer mostly the European wines and compared to the producers of Europe, the producers of New Zealand are not much well known or popular.
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