Wine Vision Live news: online wine is opening up mass Chinese wine market

By Richard Siddle

Published: 19 November, 2013

11am: E-commerce and online wine sales is helping to democratise the Chinese wine market and open up the global world of wine to consumers in even the most remote parts of China, delegates heard at the second day of the Wine Visionconference in London.

11am:

E-commerce and online wine sales is helping to democratise the Chinese wine market and open up the global world of wine to consumers in even the most remote parts of China, delegates heard at the second day of the Wine Vision conference in London.

The online wine market was way beyong the "tipping point" said Ian Ford of Chinese wine importer, Summergate Fine Wines. "It is such an exciting and dynamic arena. It is the great equaliser in China," he stressed and meant any consumer in China can now access wine.

Which was equally great news for wine producers looking to get wider distribution of their wines in to a notoriously difficult market.

David Pedrol of China's biggest online player, Yesmywine.com, said there was currently around 300 million online consumers in China. He said it was a platform that Chinese consumers trusted in an economy hampered by fraudulent products.

It was also a great way to tap in to the lucrative middle class market of China and that most had access to computers.

Vitally it also brought transparency to the wine market, stressed Pedrol. The sector was awash with vastly over priced products from short sighted, often profiteering suppliers and online meant products could be easily searched, and benchmarked against international sites such as Winesearcher.

It was also a great way to educate consumers about wine and said its site often had four pages of information about wine.

The impact of wine online he said was illustrated when it sold 100,000 bottles of wines on November 11, the Chinese equivalent of Valentine's Day.

Ford said online wine was an "incredible platform" for it to showcase its range of international wines. It was also an "honest and healthy" place to trade wine in a market that has some notoriously unscrupulous players.

He thought the ecommerce market in China had greater potential than in more mature markets.

Judy Leissener of Chinese winery, Grace Vineyards, said social media was very active in China even amongst older, middle aged consumers who may not have access or know how to use a computer but are active through social media with their mobile phones.

10.30:

Industry leaders issued stark warnings about making wine less intimidating for consumers and moving the focus away from price at today's Wine Vision conference in London.

China, Shanghai

In a panel debate chaired by Simon McMurtrie, group chief executive at Direct Wines, Dan Jago, UK and group wine director at Tesco, said he'd like consumers to feel "less intimidated by wine". He said the industry should "wake up" and start making wine for consumers outside "the rarefied 5%" who are consuming top wines. He believes the future includes embracing flavoured wines, sweeter-tasting grapes like Moscato and "whatever is easiest for the consumer to understand".

There should also be less of a fixation on meeting price points in mature markets like the UK, according to Cristian Lopez, corporate director for Asia of Concha y Toro. Pressure on producers to absorb tax and other increases could reduce wine quality, he warned. "I'd like the supply chain to understand we all have to have profitable businesses. We need more professionalism in the sector."

Christophe Salin, president and chief executive, Les Domaines Barons de Rothschild, is worried about a difficulty in attracting people to work in vineyards. "Not oenologists, but workers. We give good salaries." He added the move towards mechanisation wasn't "the right way".

Identifying the priorities for action right now, Lopez, said that when focusing your energy on developing new and emerging markets, there was a real risk of "neglecting core markets". "The UK and the USA are still the largest - something brand owners tend to forget." While China may move into third place in time, he added, these established markets "will continue to be significant".

The biggest challenge in China is how to build brands, added Lopez.

Rick Tegner, president of Jackson Family Wine Estates, said he has spent most of his time in recent years "shoring up supply", spending $100 million buying land. He said outside of the USA it is looking to grow in China and spending time on education and intelligence. Agreeing with Lopez, he said brand building there was a challenge, especially since they don't have much Californian wine there.

For Lafite's Salin, while "making good wines is certainly a challenge, where we can sell and how we sell them" is more of an issue. Selling to new consumers is a major concern. "We are able to make good wines everywhere on the planet - that's new - but are we able to market them?" He said Lafite questioned whether it was possible to make a top estate in China or a first growth in England.

Christian Seely, managing director of AXA Millesimes said acquiring unique vineyards was vitally important given the growing demand for wines from "that can only come from specific, magical places".

Jago said the price/quality relationship was the "neverending debate". He said Tesco's Finest range helped by offering a "benchmark". He said consumers are becoming "increasingly sceptical about the concept of value". Instead in some areas, the perception of prestige and image was more important.

Salin said that while the most expensive Lafite sold at $200,000 per bottle, it takes the same care at the £10-£15 mark. But scarcity added value, "when you're drinking a bottle of top wine - it's not going to be replaced."

While iconic wines can "start the ball rolling" said Seely, "people who have the money to buy these wines got it by not being stupid. They end up realising they really enjoy wine and can have a lot of fun with all kinds of other wines."

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She was confident China has a strong future in wine and will be enhanced when the generation of young Chinese consumers return to China having studied overseas and ben educated in wine around the world.

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