Wine And Spirits Exporters Tap Into China’s Booming E-Commerce ChannelAugust 20, 2015
The explosive growth of China’s e-commerce channel is giving spirits and wine imports a direct conduit to the nation’s expanding ranks of middle-class consumers, drinks marketers say.
E-retail operators like Alibaba and JD are now playing a major role in China’s wine market, and importers are leveraging those platforms as consumers flock to e-commerce sites in large numbers. Last year, 16 million people—about half of China’s wine-drinking population—bought wine online, notes Bruno Baudry, CEO of Suntory-owned importer ASC Fine Wines.
“E-commerce remains the fastest-growing sub-channel for imported wines, and it will continue to boom,” Baudry says. ASC’s e-commerce sales now account for 11% of its business, up from less than 1% in 2011. So far in 2015, the company’s online sales have grown by 50% and are expected to double from their current base in the next two to three years.
The sharp growth in e-retailing has come in tandem with a trend toward more at-home consumption of alcohol in China. In spirits, major players like Diageo, Pernod Ricard and Bacardi have been actively developing their own stores within e-retailing venues like Alibaba-owned T-Mall. Dean McHugh, managing director of Bacardi China, tells SND the format has provided a new way for marketers to directly engage consumers. Diageo rolled out its own T-Mall site last year, and Pernod Ricard has been active in the channel since 2013.
Pernod is also emphasizing its presence on social media outlets like WeChat and Weibo as part of its online strategy. Some 650 million people are currently using such China-only platforms, with the number expected to rise to 1 billion by 2020, says James Slack, vice president, marketing at Pernod Ricard China.
For now, most web purchases of beverage alcohol are at the RMB100 ($16) price point and below, but as China’s online audience matures, that scenario could well change.
For a full report on China’s wine and spirits market, see the August 1&15 issue of Impact.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.