China’s Changyu bullish on e-commerce plans

China’s oldest and largest winery, Changyu, is betting on China’s expanding e-commerce to boost its wine sales, positioning higher-priced quality wines to lead its growth online.

Changyu’s flagship store on Tmall.com

China is home to the world’s fastest growing online market and boasts more than 400 million consumers. But despite its size, its online marketplace has, at times, been plagued with cheap, low-quality products and counterfeits.

In the past few years, however, e-commerce in the country has been on “fast-track growth”, said Liu Shilu, who is in charge of Changyu’s e-commerce sector, speaking to dbHK, bringing about a “sales breakthrough” for lesser-known wine brands that engage in a low-price, low-quality sales strategy.

From Changyu’s perspective, wines priced around RMB100 (US $14) a bottle have proved the most popular items on its flagship store on the Alibaba retail platform, Liu confirmed. Last year Changyu was named the second most popular wine brand sold on Tmall.com in 2016. The majority of its online customers were buying its wines for family gatherings, Liu added.

Growth was remarkable, but “an unusually fierce price war ensued”, said Liu. As China’s wine market expands consumers’ knowledge of wine will also increase, believes Liu, which will make quality and brand appeal essential factors influencing buying choices going forward.

“For a leading company like Changyu, this trend will benefit us more to generate better sales,” he assured.

Rumours that Changyu is looking to purchase another two estates in Bordeaux to ramp up its wine imports have also been swirling. The company has already bought two wineries in France and one winery in Spain. When asked about the acquisition, the company declined to discuss details, but confirmed talks are ongoing.

Changyu currently accounts for 21.59% of China’s wine market, higher than any other domestic or imported wine brand. An earlier report by Financial Times said Changyu is aiming to import 20 million bottles of wines annually from its European wineries in the next three to five years, up from its current 3 million.