California-based E & J Gallo Winery has signed a three-year strategic partnership with the Chinese retailer Alibaba Group, the world’s largest online and e-commerce company. As the largest exporter of Californian wines and the US’ largest winery by market share (21% in 2015, according to Statista), E & J Gallo’s deal with Alibaba is intended to leverage their domestic success into broadening international sales as the winery positions itself for increased expansion into the Asian market.

The agreement will see Alibaba’s Tmall, the largest platform in China for business-to-consumer online retail, host a flagship store for E & J Gallo and feature their wines in Tmall’s supermarkets, Hema and RT-Mart. The winery has previously partnered with Tmall for sale of its Carlo Rossi, Peter Vella and Gallo Family Vineyards brands but the flagship store, opening in September this year, will feature more than 20 of Gallo’s premium wine brands including Apothic, Carnivor, Dark Horse, Gallo Signature Series, Orin Swift, La Marca, William Hill Estate Winery, J Vineyards, MacMurray Estate Vineyards.

“We are very excited to continue our on-going partnership and collaboration with Alibaba Group,” said Bill McMorran, vice president and general manager for Gallo Asia.

“As we have witnessed the rising sophistication of wine consumers in China, we are continuously looking for new ways to meet growing consumer demand. We are thrilled to offer more than 20 of our premium brands on Tmall, bringing high-quality, great-tasting wines to consumers in China.”

According to an annual forecast for the wine and spirits sector from industry event brand Vinexpo and market researcher IWSR, world wine consumption is expected to reach a record global value of $224.5bn by 2021. The report highlights that a comparison of the ten years from 2011 to 2021 shows that the value of the world wine market will grow 40% to reach volume sales of 2.66 billion 9-litre cases, a growth largely driven by the US and China.

While there have been notable declines in wine consumption in regions such as Europe, Vinexpo/IWSR’s forecast predicts that the growth present in China and the US will be more than sufficient to offset said declines. Over the next five years, China is predicted to become the world’s second largest market for grape wine with consumption increasing to $23bn as it reaches a volume of 192 million cases (by comparison, the Chinese market reached a value of $15.24bn in 2016).

By taking advantage of the reach that Alibaba can provide in China, E & J looks to establish a further presence in the Asia-Pacific region as it continues to expand its importance to the wine industry; the Asia-Pacific and Hong Kong region as a whole is projected to grow from $29 billion in 2016 to $40.8 billion by 2021.