Click and clink: Amazon selling wine in China

Click and clink: Amazon selling wine in China

Updated: 2013-10-30 07:21

By YU WEI in San Francisco (China Daily USA)

After launching its first shipment of directly imported US wines into China, Amazon China, Amazon.com’s branch there, said the wines have received a very good response in the country, especially in Shanghai. “The direct-sales model gives our wines quality assurance and more cost-effectiveness,” said Niu Yinghua, vice-president of Amazon China. “Consumers can easily have fine wines from thousands of miles away to by clicking Amazon.cn.”According to Amazon China, sales of its wines in Shanghai account for nearly half of its total sales, making Shanghai the hottest selling city in China.

Barbara Insel, president of Stonebridge Research Group, a leading research firm for the wine industry, said the news from Amazon China is good news for all California wines, as it shows that there is interest in and demand for fine wines from California’s family producers.

“Several wine experts in China said that wine consumers in Shanghai were the most knowledgeable and confident and therefore would be the most open to trying new wines. Unlike perhaps less experienced consumers, they know better than to think wine had to be French to be good or admired,” Insel said.

“Amazon’s experience proves that advice to be true,” she added.

Amazon China has been partnered with seven US wineries, most in California, to sell wines on its website since September. All selections are made from grapes sourced from low-yielding, high-quality vineyards and priced between $20 and $65 a bottle.

“China is one of the markets we sell to who love Andretti Wines,” said Joe Antonini, chairman and co-founder of Andretti Winery, one of the seven wineries whose products are sold on Amazon China.

Founded in 1996 by Formula-1 racing driver Mario Andretti, Napa Valley-based Andretti Winery sells cabernet sauvignon, merlot and chardonnay on Amazon China. “Those three are great sellers,” Antonini said. “The Chinese love our wines.”

For the first six months of 2013, California’s wine exports to China totaled nearly $34 million, up 7 percent from the prior year. The state’s wine shipments to the Chinese mainland have been on a decade-long upswing, starting from a modest $3.4 million in sales in 2002 to $74 million in 2012.

Liz Thach, professor of wine business and management at Sonoma State University, said the high quality of California wines with bright fruit-forward flavors are very appealing in China and should continue to gain traction there.

“We are also starting to see some wineries in Napa being purchased by Chinese,” Thach said. “I believe there is a positive relationship between China and California, and that an increasing number of California wines will most likely be exported to China in the future.”

Thach believes that Amazon China is providing another channel for California winemakers who are trying to enter the China market.

“We are very pleased that Amazon has entered the wine market, and these types of efforts will allow customers around the world to try new wines,” she said. “We hope they continue to expand the selection in the future.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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