The Drinks Business, August 2012

Social networking and the Internet are influencing wine sales in significant ways in mainland China, and to a lesser degree in Hong Kong. Stephen Quinn reports

As the wine business matures, wine companies in China and Hong Kong are embracing Twitter and Facebook and the Chinese equivalents to sell to an increasingly sophisticated audience.

Thomas Jullien, Asia representative for the Bordeaux Wine Council, adopted a social networking focus last year because of the ability to measure results. That was not always possible with traditional advertising, he said.

“We are seeing a boom in social networking in China,” Jullien said. Facebook and Twitter are banned in mainland China, but the country has its local equivalents: RenRen and Sina Weibo, respectively.

Jullien set up a Sina Weibo account in the middle of 2011. Within six months it had 40,000 followers. “It is a direct channel to talk to people about Bordeaux wine.”

The Bordeaux Wine Council runs seminars in at least 20 Chinese cities each year for people in the trade. Jullien uses Sina Weibo to publicise these events. “At the seminars we always check where people found out about the seminar. A very high proportion found out through someone re-tweeting Sina Weibo. It is so useful to be able to measure feedback by monitoring social networks.”

Jullien said Bordeaux sales in China had doubled every year for the past six years. He attributed recent sales success to “engaging with people curious about wine”.

David Pedrol is the product director in Shanghai and Hong Kong for Yesmywine.com, the most successful online platform on the mainland, with more than 5.2 million registered members. Each day the site sells 15,000 bottles.

When people buy wine they see how many bottles have already been sold of that wine. For example, as of mid June the company has sold 121,066 bottles of the La Bastide Laurent red.

The Internet accounted for 70 per cent of all wine choices in China, Pedrol said.

Yesmywine is the only company in China with its own social network that focuses on wine: i-Cellar. Because Facebook and Twitter are banned, the company uses local equivalents to market wine: RenRen and Sina Weibo, respectively.

About 300 million people are active on Sina Weibo. RenRen has about 200 million users, though accurate data are difficult to obtain in China.

As of mid June Yesmywine’s i-Cellar had more than 100,000 members. “All of them give comments about our wines, and discuss wine news and the wine world in general,” Pedrol said.

The company also runs My Cellar, a Twitter-like social networking service for wine lovers based on the Yesmywine platform. Events are held in more than 40 mainland cities, with an average of 15 wine parties each week.

“This approach gives us the chance to deliver news [about wine] all over China. It makes us one of the strongest marketing platforms and helps to establish wine brands in China.”

The company also uses Facebook to announce events in Hong Kong. “Facebook is small to us because we are still growing in Hong Kong. Yesmywine only launched in Hong Kong earlier this year. It is working very well for our promotions.”

Yesmywine.com was established in China in June 2008, with funding from the American venture capital firm DCM.

Noted Pedrol: “Because our company has 70 per cent of market share in China for the Internet wine business we can say that we decide a lot about the wine market in china.”

Wine consumption in China will rise because of its growing and sophisticated middle class. A survey by the International Wine and Spirit Research (IWSR) company in London predicted Chinese people would be drinking more than 1,000 million bottles a year by 2015, or an average of 1.9 litres a head – almost double the current figure of about 1 litre per person.

Sales of imported wine in China were worth RMB 22 billion last year (GBP 2.2 billion).

Earlier this year Decanter.com surveyed 70,000 Chinese wine consumers in 30 cities. Editor John Abbott said people actively looked for information each day, which explained the massive growth of social networks.

“Chinese consumers have many sources of information but little clarity. People go online for information. They know brands, but they want more information,” Abbott said.

Joshua Rubenstein is director of private client sales for the Hong Kong subsidiary of the prestigious Italian Wine Merchants in New York. He described Hong Kong and China as competitive regions where wine marketers needed to find ways to stand out. Social networking and social media were “sensational ways” to be educated by “the people we trust, our customers,” he said.

Wine merchants could continue to deepen relationships with clients via social networks, Rubenstein said. The key issue was the wide variety of information on the Internet and blogosphere, much of it “pure opinion”. He uses a blog,

insideIWM.com, to share relevant and accurate information with readers.

“We don’t just want to be telling people what’s great, but rather we want to interact. We want our clients to help us discover too because we’re just as crazy about wine as they are.”

Major wine companies can sell wine in large quantities through the Internet because of their brand name and track record. But for single bottles, or small quantities, people prefer to buy from friends via social networking sites.

Andy Chow works as an accountant in Hong Kong but has a deep passion for wine. He uses Facebook and Sina Weibo to sell wine to a small group of friends. “In my case, people buy from me purely on trust and [my] recommendations. Plus the wines I sell are not exactly expensive, so people generally say ‘yes’ to me.”

A major reason for the success of social networking in China is a cultural tendency to trust friends and word of mouth recommendations, and distrust what official media say.

Alberto Fernandez, managing partner for Torres China, said social networking was vital for marketing wine on the mainland “because of the importance of word of mouth”.

As a hobby Andy Chow collects the “Apostles”. These are 12 wines made famous by the Drops of God manga comics that first appeared in Japan in 2007. These books and their social networking links boosted appreciation of wine more than any other publication in Asia.

Wine sales in Japan increased by 130 per cent in 2008, and wines featured in the books skyrocketed in value.

The English translation appeared in September 2011. The seven-part series follows a young man’s quest to identify 12 wines his late father, a famous wine critic, identified as the world’s greatest wines, with the “drops of God” the thirteenth wine.

Social networking also played a major role during Vinexpo in Hong Kong at the end of May.

Pierre Perrin, winemaker for the family–owned Beaucastel estate in the Rhone, has been in charge of the Asian market for the past dozen years. He has been active on Twitter and Facebook, and his company launched an iPad app three days before Vinexpo.

“It is vital for our family to continue our traditions in terms of winemaking, but also to use technologies like Twitter to create markets. That’s quite a challenge for wine people.”

Wines of Brasil were active on Facebook during Vinexpo, posting regular updates on their site (http://www.facebook.com/brazilianwines). Barbara Ruppel, promotions assistant, said the organisation had been using Facebook since April 2011, along with Twitter and YouTube.

“We always try to keep our page on Facebook updated with the events we are doing and all the interesting information about Brazilian Wines, along with pictures of events and relevant facts.” The company posts videos on Facebook of journalists who have visited the wine regions plus videos of wine fairs where Wines of Brasil are involved.

Moet Hennessy in Hong Kong created an iPad app called Flavours Asia, based on the book Flavours of Asia, which launched in June 2012. It focuses on wine and food pairing for regional food, and is updated every three months, said Jane Dee, the company’s regional brand manager. “We are in summer so the app’s focus is on wines appropriate for this kind of weather.”

Access to the Internet in Hong Kong means wine prices are transparent. Social networking via mobile phones lets people compare notes on prices.

People soon learn what is good value, and shun venues where wines are overpriced. The city has a limited “bring your own” culture because restaurants actively discourage the idea by applying corkage fees of at least 1,000 HKD.

So people eat out cheaply and then enjoy wine with friends in clubs where membership fees subsidy wine prices, or drink at home.

Analysts suggest we are starting to see a consumer-led revolution using social networks.

Words: 1455

This article appeared in the August edition of the UK magazine, The Drinks Business, pages 78-80, under the headline “Wineries get wired in China”.

Categories: Not home, wine

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