China's online retail giant, Alibaba, has said it is building a new web platform to help Bordeaux châteaux sell their wines directly to Chinese consumers.
Sebastian Badault of Alibaba France and Edith Huang of the newly-formed Direct Import division that sits within the TMall part of Alibaba announced that the ‘9/9’ Wine Festival Day to be launched on September 9th 2016 will serve as the springboard for a more ambitious year-round wine programme
‘Alibaba is building a platform to help educate consumers about the culture of wine and to be a bridge between them and wine producers across the world,’ said Badault.
The wine platform intends to offer direct access for wine producers to the lucrative Chinese online market. Online shopping was worth around US$610billion in 2015, up from the 2008 figure of US$20billion, driven largely by the country’s 300 million middle class consumers (a figure that itself is expected to rise to 500 million over the coming years). Online shopping now represents 11.5% of all purchases in China, with Taobao 61.4% of that.
‘This wine platform will offer chateaux the chance to tell their own story and sell directly,’ said Huang, explaining that producers will be able to set up their own pages on the site, and are responsible for bringing their wine into China, but that Alibaba will deal with all final deliveries to consumers from their own warehouses. The Bordeaux-based Cellar Privilege will also work with chateaux to ease the service.
‘We have seen searches for wines rise within Alibaba,’ said Badault, ‘and wanted to respond to that. And working direct with chateaux means we can address the issue of counterfeiting, so providing reassurance to buyers’.
The company has seen success previously with wine sales. Chateau Monlot, the Saint Emilion estate owned by actress Zhao Wei, sold 63,880 bottles – its entire stock – within 24 hours during the November 11 shopping festival last year.
The new wine platform is open to producers, merchants and importers from all over the world. All must accept terms that include payment made on sale, not in advance. Upfront costs, however, are limited only to any translation costs for the chateaux information and transport into China – there is no fee for actually using the service, as Alibaba works on a commission basis of around 2% per sale.
Over the next decade, Alibaba intends to recruit two billion customers worldwide, and help 10 million small and medium businesses outside of China to reach Chinese consumers.
Hubert Lagrue, a courtier in Bordeaux for Gardère-Haramboure told decanter.com that the new platform was both an opportunity and a potential threat to brokers and merchants in Bordeaux.
‘The idea of being paid on sale is well established in many markets but may throw up more concerns when dealing with China’s complicated legal system for overseas investors. The numbers are of course interesting, but the idea of bypassing traditional systems may be a concern.’
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