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Analysis To Private Label Wine Business in China

September 6, 2016

 

In China, there are two types of wine distributors who want to carry and sell private label imported wines:

 

The first group is those who has a passion in wine, and would like to promote wine by building their own brands, they travel to many wine producing countries and visited wineries of their selection, buy those who love and to build their wine product portfolio, perceive eventually establishing their long-term wine business;

 

While the other group is those who want to hide the pricing information (e.g. from www.wine-searcher.com), especially with the popularity of internet and smart phone application nowadays.  Consumers could find no pricing information of their wines, which builds them a position that they could set whatever pricing that they think fit, so to maximize their profit.  Of course, there is also a combination of the above two group distributors.

 

The first type of distributors, through individual preference and some with professional approach, would select wine products with high cost-to-performance ratio in a wider price range, mostly starting €2 up and to €5 per 750-ml bottle, but rarely more than €10 per bottle. 

 

While the second group of distributors who would only buy cheap (and low quality) wines, i.e. anything under €2 per bottle.  Many of them typically drop in the price range between €1 to €1.50 per bottle.  I have seen local delivery price (for distributors) sold @CNY9.90/bottle (inclusive of taxes and all other charges), if doing a reverse calculation, that meant the wine only sells at the price of €0.85 per bottle.  Of course the order is always demanded a full 20-foot container which would be filled 11,000 to 12,000 bottles.

 

The majority of these low-pricing imported wines was from Spain, and some of them were even from France (Chinese like French wines?).  They were sold mainly to inland China, sub-urban area and less developed cities, whose customers are less educated in wine knowledge and received less information to these imported wines.  They are sold in boxes on fulfilling some kind of family and domestic functions, e.g. in a wedding banquet.  This brings “face” to the host as serving imported wines to their guests, although most, if not all, of the drinkers don’t really know how to appreciate wine.  While wine drinking is recognized and considered as fashion and stylish in the Chinese society.

 

Strictly speaking, from the point of view to a wine business, this is a segment

ChinaWineBusiness.com would not recommend winery clients to enter unless you are a volume producer and have a huge quantity to supply.

 

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