Latest status report on the DBR partnership with the Chinese International Trust and Investment Corporation (CITIC) can be found here: http://www.thesundaily.my/news/2017/10/06/lafite-release-first-chinese-fine-wine-next-fall
This is extremely interesting to me! After the GSB case about Wine in China, I am curious how much the anti-corruption laws really matter, and to what extent the economic impact is felt by the wineries. Will it somehow not be considered taboo to present Domaine de Penglai as a guanxi? Will the Chinese view this wine as a proud Chinese achievement, or appreciate it the same way they will appreciate other Estate or Collection wines from DBR? Furthermore, when any European or American winery opens a post in another country, what are the cultural implications on that new land? Have people ever reacted distastefully to the thought of foreigners coming and exploiting the terroir, or has it always been met with enthusiasm for increased economic activity and tourist attraction? Will China be any different?
The DBR and Frederick cases are fascinating specifically in terms of the concept/appreciation of time. Since it is currently not feasible or worthwhile for inexpensive wines to bother attempting China, only those who can afford 10+ year time horizons dare put in the effort. It will be interesting to see how DBR's friends like Robert Parker value the new wine, given the powerful brand and stigma of Lafite.
I'm most curious how DBR will distribute this wine within China, and how it will choose to send a few cases outside. In future years, it's worth keeping an eye on whether or not DBR's presence slowly changes the distribution channels in China.
After class, I spent a lot of time thinking about how I would position a wine produced in China. I understand the importance of a social media play and influencer partnership to promote the brand and think these are essential. My concern is not with how you raise awareness of the brand, but instead focused on how you position and design a product that can overcome the brand conscious and traditional culture that exists in China today. We know that China has a huge gifting culture and that wine plays a large role in this and we also know that brands and luxury products such as French and Napa Valley wines are well respected. So how do you overcome this with a product that is produced in a region that isn’t necessarily known for high-quality? To me, the way around this is with a packaging and timing play. Packaging: With the gift giving culture being so immersive, I think that redesigning the packaging of the bottle will entice consumers to purchase something that is unique and eye catching. One option would be to roll out an exclusive package design in partnership with a well known designer or influencer to promote the brand and drive a feeling of urgency to purchase this limited edition. This would appeal to the luxury buyer, especially if the partnership is with a well known luxury brand, and will appeal to the consumer who wants to gift something that is unique and special. Timing: Chinese consumers have a huge appreciation for tradition. When I think of a product that flies off the shelves, it is mooncakes around the time of the Mid-Autumn Festival. Mooncakes are something that you buy for your friends, your family and even your door attendant. It is so entwined with the culture that it is a given that someone will buy the product. An astonishing fact is that more than 2million mooncakes were thrown away last year alone because people are gifted too many! The good news is that wine can typically be kept for a period of time. As I thought through this, I wondered if there was a way to couple a wine release with a traditional festival to make that brand the new gift to pair with something like a mooncake. If you can brand your label with a holiday, it begins to be a product that is just purchased without thought because it symbolizes the holiday time.
For classmates that are contemplating entering the wine market in China, the projected market value for wine in China is approximately USD21 Billion. It is expected to be the 2nd largest wine market in the world, 2nd only to USA. This is interesting but what is more interesting is to compare it against Spirits consumption in China.
The Spirits market is projected to hit USD450 Billion in 2021 with a CAGR 2015-2021 of 15%. If you are indifferent towards the beverage you are going to sell into the Chinese market, perhaps the Spirits market would be more attractive.
This is extremely interesting to me! After the GSB case about Wine in China, I am curious how much the anti-corruption laws really matter, and to what extent the economic impact is felt by the wineries. Will it somehow not be considered taboo to present Domaine de Penglai as a guanxi? Will the Chinese view this wine as a proud Chinese achievement, or appreciate it the same way they will appreciate other Estate or Collection wines from DBR? Furthermore, when any European or American winery opens a post in another country, what are the cultural implications on that new land? Have people ever reacted distastefully to the thought of foreigners coming and exploiting the terroir, or has it always been met with enthusiasm for increased economic activity and tourist attraction? Will China be any different?
ReplyDeleteThe DBR and Frederick cases are fascinating specifically in terms of the concept/appreciation of time. Since it is currently not feasible or worthwhile for inexpensive wines to bother attempting China, only those who can afford 10+ year time horizons dare put in the effort. It will be interesting to see how DBR's friends like Robert Parker value the new wine, given the powerful brand and stigma of Lafite.
I'm most curious how DBR will distribute this wine within China, and how it will choose to send a few cases outside. In future years, it's worth keeping an eye on whether or not DBR's presence slowly changes the distribution channels in China.
After class, I spent a lot of time thinking about how I would position a wine produced in China. I understand the importance of a social media play and influencer partnership to promote the brand and think these are essential. My concern is not with how you raise awareness of the brand, but instead focused on how you position and design a product that can overcome the brand conscious and traditional culture that exists in China today. We know that China has a huge gifting culture and that wine plays a large role in this and we also know that brands and luxury products such as French and Napa Valley wines are well respected. So how do you overcome this with a product that is produced in a region that isn’t necessarily known for high-quality? To me, the way around this is with a packaging and timing play.
ReplyDeletePackaging: With the gift giving culture being so immersive, I think that redesigning the packaging of the bottle will entice consumers to purchase something that is unique and eye catching. One option would be to roll out an exclusive package design in partnership with a well known designer or influencer to promote the brand and drive a feeling of urgency to purchase this limited edition. This would appeal to the luxury buyer, especially if the partnership is with a well known luxury brand, and will appeal to the consumer who wants to gift something that is unique and special.
Timing: Chinese consumers have a huge appreciation for tradition. When I think of a product that flies off the shelves, it is mooncakes around the time of the Mid-Autumn Festival. Mooncakes are something that you buy for your friends, your family and even your door attendant. It is so entwined with the culture that it is a given that someone will buy the product. An astonishing fact is that more than 2million mooncakes were thrown away last year alone because people are gifted too many! The good news is that wine can typically be kept for a period of time. As I thought through this, I wondered if there was a way to couple a wine release with a traditional festival to make that brand the new gift to pair with something like a mooncake. If you can brand your label with a holiday, it begins to be a product that is just purchased without thought because it symbolizes the holiday time.
For classmates that are contemplating entering the wine market in China, the projected market value for wine in China is approximately USD21 Billion. It is expected to be the 2nd largest wine market in the world, 2nd only to USA. This is interesting but what is more interesting is to compare it against Spirits consumption in China.
ReplyDeleteThe Spirits market is projected to hit USD450 Billion in 2021 with a CAGR 2015-2021 of 15%. If you are indifferent towards the beverage you are going to sell into the Chinese market, perhaps the Spirits market would be more attractive.
https://www.beveragedaily.com/Article/2017/09/22/Chinese-spirits-market-set-to-reach-450bn-by-2021
https://www.reuters.com/article/us-global-wine/china-set-to-become-worlds-second-biggest-wine-market-iwsr-idUSKBN17T2Q8