China: Online alcohol sales projected to double every year to 2018

Source: IWSR

May 29th

Speaking at the recent China Market Conference, organised by Vinexpo Hong Kong, Chris Tung, chief marketing officer at Alibaba Group, China’s leading online retailer, stated his belief that online sales of alcohol in the country will double every year for the next three years, reaching CNY80bn ($12.20bn) by 2018.

Tung acknowledged the complexity of the market, given the various physical distribution channels, but insisted that the online space could help to manage progress in this expanding market. “.People have developed a steady habit for buying online,” he said. “Which now accounts for 30% of all consumer sales in China.” He added that in five years’ time he expects online platforms to account for around 70% of all wine and spirits sales in the country.

The importance of the role big brands play (and will continue to play) was also stressed. Also speaking at the conference, Xavier Pignel-Dupont, Greater China-Asia-Pacific director of Castel Frères, added: “Consumers buy from people or dealers they know. Consumers need that wine experience, to know and feel the story of the brands. But consumers in China don’t always know where to go, so big brands are guiding consumers, for instance through wine education to help them switch from easy and cheap wines to more valuable wines.”

In doing so, explained Robert Foye, MD of Australia’s Treasury Wine Estates (TWE), brands will need to highlight their heritage, with increased focus on brand story. He added that TWE is now fielding more brand ambassadors in the country than previously and investing five times more on marketing, 10 times more on consumer education and 100 times more on digital marketing.