International wineries, large and small, who come to China with an ambitious objective, on the upside, establish and promote their brands to support a sustainable and long term business in China, the bottom line, sell gradually, step-by-step, their wines to as many distributor customers (and in different territories) as possible in China.
Among ten thousands of wine importers and distributors in China, most (up to 95%) of these wine distributors’ scale are small-to-medium size, that means they are having an annual sales revenue from Chinese Yuan (CNY) 1.2 million to 10 million, or EUR165K to EUR1.37 million. All of them carried several wine labels from different wineries and from different wine producing countries (currently the most popular ones are France, Australia, Chile, Spain and Italy who occupied 90% market share of imported wine in both value and volume), whether they imported directly from wineries or indirectly through wine importers.
Their mission was to sell their wines as quick as possible, in a simple and straight way (a large portion of these distributors only took wine as a business and never fell in love with what they were selling). They bothered no interest nor time to invest into marketing, at least not to any wine brands which they represented. If one wine not sold, they would dump the price and cleared the stock then looked for another new wines to represent. This interpreted and explained in my another article why “first order, last order” phenomenon occurred.
Lastly, many wineries who have sold to China might still have this in their memories, they were always requested to grant the exclusive distributorship in China when they were firstly approached and negotiated with their distributor customers (though eventually these Chinese distributors accepted at the end with other solutions as they really had no power and capacity to cover the whole China market). And without the exclusivity, any investment in a brand might only benefit the other distributors instead of the investing distributor.
From the above analysis, then it is not difficult to understand why distributors in China will rarely (if not never) invest into any wine brands they represented, because:
They are too small to do so
They have no time (no patience, and actually no commitment) to do
They have no interest to do
So the only party that should take up this responsibility on promoting the brand is the brand owner herself. If wineries have a commitment to the Chinese wine market, you should roll up your sleeves and carve yourself a long term brand strategy and marketing plan. Don’t leave this job to your distributors and in most of the cases, they might be doing the other way round, though not on purpose, to deteriorate instead of building up your brand and reputation.
ChinaWineBusiness.com welcomes wineries to send us their inquiries to info@ChinaWineBusiness.com for any of their thinking, plans towards their brand strategy and marketing scheme in China. We would help to our largest extent to give you advice for the most appropriate, if not the best, for your consideration and decision-making in your China wine business plan.