Effects of Information and Country of Origin On Chinese Consumer Preferences for Wine: An Experimental Approach in the Field

Wine is a product whose value largely depends on the reputation associated with its region of production. China is a newcomer and latecomer to wine production and consumption. Wine consumption, especially imported wine, rarely exists outside of major urban areas. Therefore, understanding the Chinese local markets and consumer preference for wine products is important for foreign wine producers. WTP (Willingness-to-Pay), in economics, is the maximum amount a person would be willing to pay for a good, which is a useful tool to address consumers’ preference. In our study, we investigate the effects of information and origin of production on Chinese consumers’ WTP for wine. By using a second-price sealed-bid auction mechanism, which was first developed by Vickrey (1961), we organized experimental auctions in both Beijing and Shanghai, China. The items for auctions are four different wine products originated in China, France, USA, and Australia. And there are two comparison groups, with or without information exposure. With 436 participants in total, our experiments collected data on their WTP’s and socio-demographics. Our data shows that participants would like to pay the highest price for the wine from France, while their WTP for the Chinese wine is the lowest among the four. Furthermore, we find important factors affecting their WTP for wine, including age, gender, employment status, education status, household income, and household size. Our results provide meaningful and insightful marketing suggestions for the “new world” and Chinese wine producers, such as the target consumers and pricing strategy.