Over the past decade, Shanghai has emerged as one of the most vibrant cities in China when it comes to wine culture. Years of steady economic growth have created a rising new class of middle-class professionals eager to explore foreign wines. Moreover, the city itself is now filled with wine shops and upscale restaurants and wine bars.

The transformation of Chinese wine culture in Shanghai

Historically, the wine has always played an important role in Chinese culture. However, until recently, the wine was primarily viewed as a drink only to be enjoyed for special occasions. When Chinese consumers purchased a bottle of wine, the emphasis was on prestigious foreign winemakers, preferably expensive bottles of red wine from French wine regions like Bordeaux. Moreover, the wine was viewed as more of a gift that you exchanged with others than something that you opened up at home for a weekday meal.

But that all changed in the mid-2010s, as China launched an anti-bribery and austerity campaign designed to clamp down on rampant excesses in the government and bureaucracy. The days of excess were over, and that had a real impact on the wine market. All of a sudden, very expensive bottles of wine – sometimes given to business connections or government officials as an unofficial bribe or a way to gain influence – were out of favour. That opened the door for lower-priced wines from New World winemakers.

Now that the wine buyer was also the wine drinker, Chinese consumers in Shanghai were incentivized to buy wines they really enjoyed, rather than ones they thought might make a good gift for someone else. In 2015, the South China Morning Post wrote that this was the year that Chinese wine culture finally went mainstream due to this new thinking about wine.

The stratification of Chinese wine consumers

Within Shanghai society, there are three core types of wine drinkers – the affluent and upscale wine drinker, the younger millennial wine drinker, and the online wine buyer. Each of these wine drinkers tends to favour a different type of wine, as well as a different type of wine buying experience.

For example, the affluent and upscale wine drinker in Shanghai tends to favour Bordeaux and Burgundy wines, and they tend to enjoy their wine at upscale restaurants, hotel bars, and wine bars. In fact, CNN recently featured Shanghai as the “fine wine capital” of China, calling it the most dynamic wine city in the country. Although Western expats still account for a large proportion of patrons at these upscale restaurants and wine bars, Shanghai has seen the appearance of luxury wine shops, as well as VIP wine lounges. One example is The Wine Residence, a 5-story private dining club operated by ASC Fine Wines, the largest importer and distributor of foreign wines in China.

In contrast, the young millennial wine drinker in Shanghai is more likely to buy wines that their parents do not drink. Instead of full-bodied Cabernet Sauvignons, for example, they tend to prefer wines with lighter, softer tannins, as well as fruitier notes. They also are much more likely to purchase a New World wine from a wine region like Australia (the No. 2 exporter of wines to China, after France) or Chile (the No. 3 exporter).

These younger drinkers are also much more likely to be interested in wine education, wine tourism, and the proper pairings of food and wine. At one time, food-wine pairings were predominantly associated with Western food, but there has been a real shift to pairing wines with traditional Chinese cuisines. For example, the spicy hot cuisine of Sichuan is usually paired with a big Napa Valley Cabernet, while the lighter, more delicate cuisine of the Cantonese and Fujian schools are best paired with fruity, off-dry wines with little or no tannins.

Many of these younger millennial drinkers are part of the growing middle class in China, and as a result, they tend to view wine culture as a way to showcase their social superiority and prestige. While members of the older generation in Shanghai may still view wine in terms of guanxi (“business connections”), members of the younger generation in Shanghai tend to view wine in terms of climbing the social ladder.

The third most important type of wine drinker in Shanghai is the online buyer. As a whole, China has become the No. 1 buyer of online wine in the world, surpassing even the United States, and that has created enormous opportunities for online wine retailers. One of the most important online platforms for wine buying is now Tmall, which has created a new Tmall Vineyard Direct program to showcase premium sellers such as Robert Mondavi Wines. Tmall has also worked with Australian wine exporters to create a dedicated storefront for Australian wines.

And this embrace of digital online culture has fundamentally changed the game for Shanghai wine drinkers, who now compare notes on social media, engage with online influencers, and buy wines with their mobile devices. In fact, Tmall says that nearly 60 percent of all wines purchased online are from mobile commerce orders. Thus, for any foreign winemaker trying to reach the modern Shanghai wine drinker, the message is clear: embrace the world of Chinese online digital platforms, including WeChat.

Domestic vs. foreign wine consumption

While much of the hype and buzz surrounding the Chinese wine market focuses on the market potential for foreign winemakers, the fact remains that 80 percent of all wine sold within China is domestically produced wine, from big winemakers such as Changyu Pioneer Wine, Dynasty Wines, or Great Wall.

However, just because these wines are “domestic” wines does not mean that they are produced and bottled entirely within China. Bulk wines from locations such as Australia and Chile are a major factor in the growth of domestic wine consumption, and these bulk wines are often classified as domestic wines as soon as they become part of red blended wines from local Chinese producers. Thus, the 80/20 split between domestic and foreign wines is probably much closer to 70/30, with some wine experts predicting that the Chinese wine market will reach equilibrium at about one-third foreign wines, two-thirds domestic wines.

Future trends for Shanghai wine culture

The pace of economic growth in China will have a huge impact on which wines Shanghai wine consumers select. Now that wines are widely distributed to supermarkets, hypermarts and convenience stores, Chinese wine consumers are much more savvy about pricing, as well as how to make sense of once-confusing foreign wine labels. If household incomes decline as a result of slowing economic growth, that could lead to a shift away from expensive foreign wines (i.e. those from France, Spain, Italy) and toward lower-cost wines from New World wine destinations that are making wines better-suited for the Chinese palate.

Wine culture in Shanghai might be changing rapidly, but some things remain the same. For example, wine is still associated with health, good luck and prosperity. And, due to longstanding cultural associations with wine, even specific vintages can often hold very important superstitious meanings – the 1988 vintage (with two lucky 8’s) famously attracted a cult following. Based on these cultural norms and traditions, new Chinese occasions continue to grow  – such as the famous Double 11 campaign to turn wine into a sort of Valentine’s Day for young lonely wine drinkers.

The future is very bright for Shanghai wine culture. One of the world’s most dynamic, vibrant cities now has one of the most vibrant, dynamic wine cultures in the world as well.