Importance of Wine Label Information to Hong Kong Chinese Consumers: Preliminary Data and Implications for Wine Marketing

For the average consumer, the wine label is one of the most important things taken into consideration while on the hunt for a bottle of wine to purchase. With so many choices lining the store aisles, what’s written on the wine label is often all there is between a potential consumer and money in the store or wineries till. The

presence of a knowledgeable sales person is always helpful, and access to peer-recommended wines via countless wine apps is also a plus, however, more often than not it’s the label that is the be-all-end-all of the final decision.

There has been a significant amount of research on the importance of wine labels in marketing and wine selection, as well as exactly what on those labels drive consumers to choose one particular wine over another. The vast majority of this research to date has been focused on Westernized cultures, including the US, Europe, and Australia just to name a few. What’s shockingly absent in research on wine label preferences are those studies focused on Asian cultures.

If you’ve been paying attention to trends in the wine world at all the past several years, you already know that China is rapidly becoming one of the top consumers of wine in the world. Wine consumption in Europe is starting to see a downward trend, while it is expected that world red wine consumption will still grow upwards of 9.1% by 2016 and white wine consumption up 2.75% by 2016, thanks in huge part to marked increases in wine consumption by the Chinese (Vinexpo 2013 data, PDF).

Within China in particular, Hong Kong has seen increases in wine consumption by 54% between 2008 and

2012. Vinexpo 2014 data (PDF) predicts further increases of up to 17.4% by 2017. Per capita wine consumption ranks Hong Kong as the highest in Asia, with consumers guzzling down 5.4 liters of wine in 2012. By comparison, the average annual per capita consumption of wine for Mainland China was only 1.3 liters that same year.

With this rapid increase in wine consumption in Asia, and in particular in Hong Kong, understanding the average consumer and what they are looking for in a wine is of utmost importance for those wineries trying to sell their wines in that emerging region. Surprisingly, however, very little research has been done on wine label preference for the average Chinese consumer, and absolutely none has been done with a focus on Hong Kong residents.

Before launching into a study on wine label preference, one must understand a little bit about the Hong Kong and Mainland Chinese consumer in general.

Hong Kong was once a British colony, thereby the culture there tends to be a mix of Eastern and Western influences. While the vast majority of residents are Chinese in origin, they tend to be highly open to both Eastern and Western ideas and do not necessarily behave equally as their Mainland Chinese counterparts when it comes to wine preference and wine selection.

In terms of how wine is viewed, Mainland Chinese citizens tend to see wine as something to be enjoyed for special occasions. Additionally, for Hong Kong residents, wine is mainly consumed in restaurants or otherwise during a meal. For Hong Kong consumers, they report drinking wine as a way to convey a certain image: one linked to “intellectuality, success, affluence, and sophistication”. It is not common at this point for Chinese or even Hong Kong residents to drink wine just for the sake of drinking it alone (though this could change as their tastes and education on wine develops).

Another factor that may end up proving significant in terms of wine selection preference by Chinese and in particular those from Hong Kong relates to the color of the wine label. While color is seemingly important in many cultures, the reasons why they are important and what individual colors signify can be markedly different. For example, in South Asian cultures, yellow represents richness (think gold) and green

represents vitality at times, and infidelity of a woman at other times (depending upon who you ask). The color red is linked to luck, while the color white is linked to bad luck and funerals. Finally, purple tends to be linked to sadness.

Taking all of this information into consideration, a new study recently accepted into the journal Wine Economics and Policy aimed to address this major hole in wine label preference/wine selection research, by examining how Hong Kong Chinese consumers interpret label information, and how this information might influence their selection at the store.

Methods

Despite the lengthy introduction, the methods are actually pretty short.

To participate in this study, one had to be a Hong Kong resident of Chinese origin, be at least 18 years of age (the legal drinking age in Hong Kong), and must have purchased at least one bottle of wine during the previous three months.

This study had two different parts:

The first part was to conduct a face-to-face interview with participants. To do this, researchers went to two different branches of the wine section of a leading supermarket chain and performed one-on-one interviews with willing participants who purchased at least one bottle of wine. 20 people in total were interviewed. The participants were basically asked the reason why they purchased the wine(s) they just had, and what sort of information they were looking for on the label.

The second part was an online questionnaire. In this questionnaire, participants were asked about the importance of the following wine label characteristics: brand, varietal, vintage, origin, alcohol content, label color, and label design. For the label designs, participants had to rank the following styles: traditional, modern classic, modern vibrant, modern contemporary, and elegant contemporary. For label color, participants had to rank the following: red, yellow, black, and white.

These questionnaires were sent to 35 people with instructions that they may forward it on to their friends and family. Participants had to have purchased at least one bottle of wine within the previous three months. A total of 118 questionnaires completed by Hong Kong residents of Chinese origins were valid and used for the study.

Finally, Latent Cluster Analysis was performed on the data to try and tease out similar groups out of seemingly dissimilar or otherwise confusing data.

Results

Demographics

• For the online questionnaire, 51% of participants were women and 49% were men.
• 46% of participants were between the ages of 18 and 34.
• 30% of participants were between the ages of 35 and 44.
• 24% of participants were aged 45 years or older.
• 69% of participants held academic degrees, while 31% held secondary school diplomas.

Importance of Wine Label Attributes

• As shown in the table above, the most important attributes on a wine label according to Hong Kong consumers are: origin of wine, grape variety, a three-way tie between brand name, wine and food pairing, and vintage, and finally alcohol content.
• While the table is not complete, one can clearly see that wine label attribute preferences are markedly different between cultures.

Wine Label Colors

• Yellow was the most important color on a wine label for Hong Kong consumers.
• White and black labels were the next most important colors, with no significant differences seen between the two.
• Red was last on the list of preferred colors.

Preferences by Demographics

• Women ranked the label designs “elegant contemporary” higher and “modern vibrant” lower than men.
• The 45 and older age group preferred the “modern classic” design, while the 18-34 year olds preferred the “modern contemporary” design.

Cluster Analysis

• Cluster 1 represented a group of participants who preferred the “traditional” label design as well as the color white.
• Cluster 2, 3, and 4 all considered the color red to be a positive attribute, while Cluster 1 considered it to be very negative.
• Cluster 2 represented a group of participants who preferred the “modern classic” label design as well as the colors red and yellow.
• Cluster 3 represented a group of participants who preferred the “elegant contemporary” label design as well as the color red.
• Cluster 4 represented a group of participants who preferred the modern label designs as well as the color black.
• Cluster 1 was the largest group, with 40.7% of participants in the group.
• Cluster 2 had 30.5% of participants in the group.
• Cluster 3 had 16.1% of participants in the group.
• Cluster 4 had 12.7% of participants in the group.
• Cluster 3 was mostly participants aged 18-34.
• No other demographics analyzed could categorize the other clusters into something useful from a marketing stand point.

Conclusions and Thoughts

The results of this study provide a good start to the much needed data on wine label preferences in Hong Kong Chinese culture. However, drawbacks of this particular study include a small sample size, as well as a low number of stores visited by researchers. While the results are certainly interesting from a novel standpoint, much more work needs to be done on a larger scale in order to be able to 1) generalize at the population level for Hong Kong; 2) determine wine label attribute preferences at a more detailed scale (i.e. more than 6 attributes); and 3) further understand the seemingly different groups of consumers found by cluster analysis in this study.

It is clear from this study that critical purchase decision making information on wine labels is different for

consumers in Hong Kong than it is say in Europe or the United States. If a winery is interested in selling their wines on the Asian market, particularly in Hong Kong where wine consumption is huge and there is currently a “foodie revolution” occurring, then simply applying the same marketing techniques there as one does in other markets is a recipe for disaster (or at least poor sales!).

This study highlights the fact that this newer, burgeoning wine market in Hong Kong is going to require a different approach to marketing and sales than more traditional markets. Hopefully over time, our understanding of the data will become even clearer with further research and study, thus allowing wineries to distribute and be successful on a global scale.

Sources:

Main Study: Tang, V.C.M., Tchetchik, A., and Cohen, E. 2015. Perceptions of wine labels by Hong Kong Chinese consumers. Wine Economics and Policy, http://dx.doi.org/10.1016/j.wep.2015.02.002.

Supporting Data for Figure: Goodman, S., Lockshin, L., Cohen, E., Fensterseifer, J., Ma, H., d’Hauteville, F., Sirieix, L., Orth, U., Casini, L., Corsi, A., Jaeger, S., Danaher, P., Brodie, R., Olsen, J., Thach, L., and Perrouty, J. 2008. International Comparison of Consumer Choice for Wine: A Twelve Country Comparison. 4^th International Conference of the Academy of Wine Business Research, Sienna, July 2008. (PDF)