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IJWBR
21,3
Is a glass of Merlot the symbol of
globalization?
An examination of the impacts of globalization
258 on wine consumption in Asia
Kyuho Lee
College of Business, Western Carolina University,
Cullowhee, North Carolina, USA
Abstract
Purpose – The purpose of this paper is to investigate how underlying globalization could influence
Asian consumers’ wine drinking patterns and behaviors. Specifically, a theoretical framework that
explains the underlying motivations of Asian wine consumers is developed.
Design/methodology/approach – A broad range of literature is reviewed in an attempt to develop
a theoretical framework for the impacts of globalization on the Asian wine market.
Findings – Three key forces that drive change in the Asian wine markets are identified; these
changes explain the explosive growth of wine consumption in Asian countries.
Research limitations/implications – A theoretical framework is developed in an effort to explain
the impacts of globalization on Asian wine consumption. Therefore, no empirical tests are conducted
to validate the theoretical framework. Future studies could test the theoretical model by conducting
an empirical study.
Practical implications – Multi-faceted global progress in terms of economic, technological, and
socio-cultural influences has influenced Asian consumers’ wine consumption positively. Therefore,
Asian consumers’ wine consumption will continue to grow significantly. A theoretical framework that
explains the relationship between the progress of globalization and wine consumption in Asia is
developed. This framework will help international wine marketers better understand the recent rapid
growth of wine consumption in Asia.
Originality/value – This is the first research that attempts to investigate how globalization has
affected the Asian wine market.
Keywords Globalization, Wines, Consumer behaviour, Asian studies
Paper type Research paper

Introduction
Wine, one of the most traditional Western alcoholic beverages for centuries, has
become one of the most popular global alcoholic beverages. Traditionally, drinking
wine was regarded as a long tradition of Southern European countries. Yet, between
1994 and 2000, Asian countries increased their wine drinking significantly; Japan,
Taiwan, Singapore, China, and Korea recorded average growth of 68, 87.1, 105.9, 72.7,
61.8, and 13.2 percent, respectively, which led the global wine industry to further
explore the potential of these markets (VinExpo, 2002). It is astonishing to see this
dynamic growth in wine consumption in Asia because most Asian consumers have not
traditionally drunk wine and each Asian country has its own traditional alcoholic
beverages, such as ‘‘sake’’ in Japan and ‘‘sochu’’ in Korea. Furthermore, there is a strong
association between culture, eating habits, and food preferences (Fieldhouse, 1995). In
International Journal of Wine other words, individual dining patterns are deeply based on the culture with which an
Business Research individual is affiliated (Fieldhouse, 1995). Thus, it is very difficult for an individual to
Vol. 21 No. 3, 2009
pp. 258-266 change preferred food items and beverages, including alcoholic beverages.
# Emerald Group Publishing Limited
1751-1062
The recent growth in wine consumption in Asian countries such as Japan, Hong
DOI 10.1108/17511060910985971 Kong, China, Korea, and Thailand has drawn attention from both academic researchers
and industry practitioners (Cook and Lockshin, 1997; Lee et al., 2005). This growing Wine
wine consumption is an interesting phenomenon and is worth investigating in an
attempt to understand the underlying factors that motivate Asian wine consumers. A
consumption
conceptual model that integrates the motivations of Asian consumers with a in Asia
consideration of the influences of globalization has not been developed despite a
growing amount of research related to Asian wine consumers. Most wine research
(Cook and Lockshin, 1997; Dewald, 2003; Handley and Lockshin, 1997; Lee et al., 2005;
Wilson and Huang, 2003) that is relevant to Asian wine consumers or the Asian wine 259
market has tended to highlight the marketing aspects of the Asian wine market. In this
paper, I relate the progress of globalization to growing wine consumption in Asia in
order to better understand and explain the growth of wine consumption in Asia. A
theoretical model underpinning the relationships between wine consumption in Asia
and the progress of globalization is presented. In addition, three crucial propositions
will be developed on the basis of the model.
Specifically, the model is designed to present a framework to answer the following
questions:
. How has the progress of globalization affected wine consumption in Asian
countries?
. What are the key drivers of globalization that influence wine consumption in
Asia?
A broad array of literature ranging from discussions of globalization in the hospitality
industry to Asian wine marketing will be reviewed in order to connect the globalization
concept to the recent phenomena of growing wine consumption Asia. This paper is
divided into two parts. In the first part, literature relevant to globalization is reviewed. In
the second part, the outlook for the global wine industry as well as the literature dealing
with Asian wine consumption and wine marketing are discussed. In addition, three
critical propositions that link the progress of globalization to wine consumption in Asia
are constructed on the basis of the theoretical discussion in the second part of the paper.

The progress of globalization and its impacts on global wine business


and the characteristics of Asian wine market
Fraser and Oppenheim (1997) state that ‘‘Globalization is the process by which the
world’s economy is transformed from a set of national and regional markets into a set of
markets that operate without regard to national boundaries.’’ According to Ohmae (1990),
today’s geographic borders among countries do not have as much meaning as in the
past, which has resulted in the emergence of a number of transnational companies and
accelerated the process of globalization. More importantly, global consumers seek the
best products and services at a reasonable price across borders without considering the
nationality of products and services (Incandela et al., 1999; Ohmae, 1990). It is estimated
that the value of the global market in 2027 will be $73 trillion compared to $6 trillion in
1997 (Bryn and Fraser, 1999). Therefore, multinational firms have been geared to
penetrate enormous global markets by reinforcing their global brands, reshaping their
concepts, and forming strategic alliances with local firms (Incandela et al., 1999). The
alcoholic beverage industry is one of the fastest globalizing industries (Carreyrou, 2003).
Before the middle of 1990, beer, whiskey, and cognac were the favorite Western
alcoholic beverages in East Asian countries (Findlay et al., 2004). However, recently, the
popularity of these Western alcoholic beverages has decreased in Asian countries. For
instance, cognac, which was a favored gift item in many Asian countries among
IJWBR affluent families due to its prestigious image, has lost popularity in East Asian
countries as a lucrative gift item (van Westering, 1994). One of the major reasons
21,3 cognac has lost market share in Asian countries is that a growing number of Asian
consumers have started to look for less strong alcoholic beverage item due to growing
health issues. Furthermore, a growing aging population in certain Asian countries has
driven more Asian consumers to seek to less strong alcoholic beverages and more
healthful beverages (Defoe, 2007). For example, about one-third of the Japanese
260 population will be 65 or over in 2026 compared to 20.5 percent in 2007 (Defoe, 2007).
Interestingly, wine has emerged as a popular alcoholic beverage in Asian countries
due to its image as a healthy alcoholic beverage, and due to Asian consumers’
preference for the Western lifestyle (Defoe, 2007; Rijk, 2005). Furthermore, the progress
of globalization in the global wine industry has driven average Asian consumers to
drink wine with more affordable prices. The growth rate of wine consumption in Asian
countries is notable. It is estimated that consumers in the Asia-Pacific will consume a
total of 1,268.9 million liters of wine by 2011 which is an increase of 15.9 percent above
2006 levels (Datamonitor, 2007).
Wine producers from new world wine-producing countries such as Australia and the
USA have developed competitive and innovative wine marketing strategies such as
branding wine and building mass wine production facilities which help more Asian
consumers drink wine at affordable prices. Meanwhile, older wine producers from
countries such as France have not leveraged their wine brands nor focused on marketing
wine to the Asian market (Carreyrou, 2003). Furthermore, the new world wine producers
have used single grape varieties unlike most French wine producers which compound
different types of wine grapes (Carreyrou, 2003). Using single grape varieties may help
attract wine novices in Asian countries who have just started drinking wine and may not
understand the complexity of different wine grapes (Jenster and Cheng, 2008). Therefore,
the new world wine producers have expanded their global market shares rapidly and the
global market share of new wine producers was about 20 percent in 2003 as compared
to 6 percent in 1993 (Carreyrou, 2003). In light of the significant growth of wine
consumption in Asian countries, a number of researchers (Beverland, 2002; Cook and
Lockshin, 1997; Dewald, 2003; Lee et al., 2005; Wilson and Huang, 2003) have attempted
to understand this emerging market and Asian consumers’ wine drinking. Much of the
research has emphasized examining the unique characteristics of Asian wine consumers
and investigated if there are any significant differences in terms of consumers’ wine
drinking patterns and behaviors between Western and Asian consumers.
Rijk (2005) contended that a trend toward snobism is a key driver in wine
consumption in developing Asian countries. According to Rijk (2005), consumers in
developing countries have recently followed the lifestyle of Western consumers. For
example, consumers in developing countries might believe that they would experience
Western culture and lifestyle by drinking wine. Cook and Lockshin (1997) also
investigated the characteristics of Thai wine consumers. The results of the study
indicted that Thai consumers were more likely to place significant importance on wine
brand, image, and prestige in the selection of wine. Presumably, wine is still a new
product to Thai consumers and most Thai consumers are unfamiliar with wine, in spite
of growing wine consumption in Thailand. Thus, Thai consumers tend to depend on
wine brand and reputation in the selection of wine. Cook and Lockshin’s findings
appear consistent with research that indicated that Asian consumers spent a
significant amount of wine browsing wine products because wine is a relatively new
product to them (Handley and Lockshin, 1997).
Furthermore, consumers cannot taste wine before purchasing it, which may lead Wine
consumers to perceive more risk in the purchase of wine in comparison to other
products (Mitchell and Greatorex, 1989). Therefore, it would be beneficial to provide a
consumption
variety of opportunities for Asian consumers to learn more about wine in an effort to in Asia
reduce the risks that Asian consumers associate with wine purchases and to expand
the Asian wine market more proactively (Beverland, 2002). For instance, foreign wine
marketers could offer series of wine seminars that explain wine history, wine culture,
and the health impact of wine consumption to the Asian consumers (Beverland, 2002). 261
In addition, Wilson and Huang (2003) investigated factors that global wine marketers
might consider when they promote, brand, and label wine for Asian markets. The results
of the study indicated that Western wine marketers need to create labeling and branding
strategies that meet traditional Asian culture and value. For example, in Asia, the
number eight implies luck; numbers such as three, six, and nine imply positive meanings
whereas the number four implies bad luck and death. Thus, using the number four
should be avoided in naming and labeling wine. Furthermore, young wine consumers in
Asian countries are well educated and their English skills are relatively high. Therefore,
using original English wine names or French wine names might be effective since these
young people value authentic wine products that demonstrate the original wine labeling
without any modifications (Wilson and Huang, 2003).
Beverland (2002) contended that understanding the concept of reciprocity is crucial in
developing successful marketing strategies to develop Asian wine market. In this case,
reciprocity means that Asian people feel a strong level of obligation to re-pay people from
whom they receive help or hospitality (Hofstede and Bond, 1988). For example, if foreign
wine marketers offer Asian wine retailers a series of wine training courses, then Asian
wine marketers who receive these extra services are more likely to return the extra help
to the foreign wine marketers. Therefore, foreign wine markets should not only focus on
selling wine in Asian markets, but they should establish reliable relationships with Asian
marketers on the basis of the concept of reciprocity (Beverland, 2002).

Towards a framework for explaining increased Asian wine drinking in


the light of globalization
In an effort to explain the underlying dimensions of the growing popularity of wine
consumption in Asian countries, the major forces that drive Asian consumers to drink
wine are identified in conjunction with the development of globalization. By identifying
the major forces that drive Asian wine drinking and relating the forces to current
Asian wine drinking behavior, it might be possible to predict future Asian wine
drinking patterns and trends.

The impacts of economic globalization on Asian wine consumption


The accelerating integration of individual national economies into the global economy
has affected the Asian wine market substantially. For instance, many countries have
formed free trade agreements (FTA) which open each country’s domestic market to
allied foreign countries. Most Asian countries that have relied on international trade
for their economic growth have expedited FTAs in order to continue to boost their
economic growth (Cheong, 2004). Cheong (2004) claimed that, in general, FTA results in
significant economic growth for all countries engaged in the FTA, due to liberalized
and integrated economic conditions. By integrating each country’s economy into the
global economy, existing trade barriers such as high tariffs, which often discourage
countries to develop international markets, have been diminished.
IJWBR For example, Korea formed an FTA with Chile on 4 April 2004 to facilitate
bilateral trade between the two countries (Cheong, 2004). As a result, Chilean wine
21,3 sales in Korea increased almost 300 percent in 2006 over 2003 and Chilean wine has
become the second largest wine import in Korea (Korea Herald, 2006). This trend
will likely continue as tariffs levied on Chilean wine were removed entirely in
2008, according to the specifications of the FTA between Chile and Korea (Korea
Herald, 2006).
262 At the same time, international wine markets will benefit directly from free global
economic environments and economic integration. For example, Woodbridge, a wine
brand of Robert Mondavi, is 40 percent more expensive in Japan than in the USA due to
the heavy import tariffs levied by the Japanese government (Urban and Goldberg,
1995). In Korea, in 1989, the government restricted the quantity wine that could be
imported by introducing annual quotas on wine in order to protect its weak domestic
wine industry (Ryu, 1994). However, under economic globalization, the Korean
government had to remove its quotas on imported wine to facilitate the export of its
products to foreign markets. For instance, a 100 percent tariff was charged on imported
wine in 1987, but the tariffs were reduced by 30 percent in 1990 (Ryu, 1994). By
reducing tariffs levied on foreign wine, it is expected that more middle-class Asian
consumers will be able to afford foreign wine.
The proceeding discussion leads to Proposition 1.
P1. The more global economic barriers such as tariffs wine are removed the more
wine consumptions in Asian countries will increase.

The impacts of socio-cultural globalization on Asian wine consumption


Enhanced urbanization, transportation systems, and infrastructure facilities,
accompanied by a growing middle-income class, the deregulation of the service
industry, and a preference for a modern urban lifestyle among developing Asian
countries have provided huge opportunities for global wine marketers to expand
their presence in Asian markets (Merwe, 1987; Price, 1996; Regmi and Pompelli,
2002). With the economic growth in Asian countries, increasing numbers of Asian
consumers have traveled and studied abroad. These experiences have made them
more open to Western cultures and food, as compared to older generations who are
more likely to have conservative attitudes towards Western foods and culture and
who remain true to their traditional culture and food. The open attitude toward other
cultures among Asia’s younger generations has positively affected wine consumption
in Asian countries.
Furthermore, a number of researchers (Levitt, 1983; Ohmae, 1990; Quelch and Hoff,
1986) have argued that global consumers have become increasingly homogeneous due
to the progress of globalization. Globalization has geared globally thinking consumers
to share many international brands such as Coca-Cola and Nike, even though values
and cultural systems of these consumers may differ. Furthermore, the soaring
economic growth in Eastern Asian countries such as China, Hong Kong, and South
Korea has led consumers to spend more money to maintain their health and quality of
life. The proceeding discussion leads to Proposition 2.
P2. The open mindset of Western culture and food among Asian consumers
is positively associated with the growth of wine consumption in Asian
countries.
The impacts of technological development on Asian wine consumption Wine
Rapidly growing media have allowed today’s global consumers to acquire information
about global products and services more easily. For instance, most of today’s global
consumption
consumers have used the Internet, which allows consumers to find global products and in Asia
brand information as needed (Blackshaw, 2008). Furthermore, 24-h global media
services such as CNN and internet news have allowed consumers to check global news
without the constraints of place and time. The development of global satellite systems
also provides consumers with the ability to watch their own country’s news or dramas 263
through TV during their foreign travel. Ohmae (1990) states, ‘‘Global consumers know
exactly what happens in the world. They know what products and brands have the
most value.’’
The dynamic progress of technology has helped each individual consumer connect
to one global community. Specifically, the Internet, global media networks, video-
sharing sites such as YouTube, and cellular phones link global consumers in a fast
manner that allows global consumers to share global wine brands, news, and
information (Blackshaw, 2008). For example, Asian consumers can obtain a variety of
information about wine, such as the health benefits of wine drinking and knowledge of
global wine brands trough blogs, internet message boards, and internet forums
(Quinton and Harridge, 2003). In addition, a number of Internet wine distribution
retailers have motivated Asian consumers to drink wine by developing innovative
websites. In addition, a vast number of internet marketing tools such as database
marketing, email, digital TV, and mobile marketing have been used to attract Asian
wine consumers.
When Koreans learned from a variety of media such as TV news and newspapers
that moderate red wine drinking can reduce heart disease, an increasing number of
Korean consumers started drinking red wine (Bang and Cho, 2001). Many Asian
consumers have been engaged in a variety of Internet forums to obtain and share wine
information and form wine clubs, which could reduce their perceptions about the risks
of drinking wine (Stauss, 1997). As a result, the development of new media has
eliminated the geographic boundaries among global consumers; this dynamic
globalization progress has motivated Asian consumers to experience wine.
The preceding discussion leads to Proposition 3.
P3. The development of global media such as internet and global media network is
associated with the positive growth of wine consumption in Asian countries.
Based on the discussed propositions, the following theoretical framework has been
developed.
As shown in Figure 1, the progress of globalization in three key economic, socio-
cultural, and technological domains has driven wine consumption in Asian consumers
and explains the recent growth in Asian wine consumption.

Conclusion
Huntington (1993) postulated that global civilizations have conflicted with each other
due to the religions, philosophies, and perspectives that underlie each civilization. In
particular, cultural differences between civilizations are not exchangeable; thus, each
culture is less likely to adapt to another’s culture (Huntington, 1993). Huntington (1993)
argued that the rest of non-Western civilization has sought to acquire both modernity
and a Western lifestyle that is characterized by wealth, technology, and machines.
Huntington’s (1993) argument makes sense in explaining the recent growth in wine
IJWBR
21,3

264

Figure 1.
Globalization and its
impacts on Asian wine
consumption

consumption in Asia. Even if Asian consumers are still inclined to prefer the traditional
food and alcoholic beverages of their cultures, this trend has been changing slowly in
the globalizing economy.
For instance, Starbucks operates over 535 stores in Japan, and 148 stores in China
even though the preferred traditional beverage in these countries is green tea
(Biederman, 2005). Biederman (2005) claimed that Starbucks has been able to succeed
in Asia due to the growing number of the middle-class Asian consumers’ who desire a
Western lifestyle. In the case of China, it is estimated that there are about 250 million
new members of the middle-class thanks to the country’s quick economic development.
As a result, China has become the most dynamically growing wine market in the world,
with the potential to grow continuously (Pike and Melewar, 2006). However, very few
Western wine marketers might have foreseen this significant increase of wine
consumption in Asia in a couple of decades ago.
This study has attempted to explain the growing popularity of wine in Asia based
on an understanding of recent trends in globalization. The study has developed three
key propositions in an attempt to explain the relationship between globalization and
wine consumption in Asia. These propositions shed valuable light on the underlying
dimensions of the current popularity of wine in Asia and the potential growth of wine
consumption in Asia. It is recommended that future research test the conceptual model
of the study empirically to see if the study’s conceptual model is valid. In addition,
given the scarcity of reported research on wine consumers’ behaviors and the cultural
impacts on consumers’ preferences for wine, there may be a huge opportunity for
further theory building and empirical testing regarding these topics.
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Corresponding author
Kyuho Lee can be contacted at: klee@email.wcu.edu

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