China’s wealthiest wine connoisseurs now have another option when trying to source the very best wines. Over the weekend, the new e-commerce site WangJiu held a glitzy launch party, and its CEO Li Rui stated the aim to hit RMB 300 million – nearly US$50 million – in sales transactions in the first year. To put that figure in perspective, China’s online alcohol sales are expected to bubble up to $2 billion by 2014.
WangJiu focuses on high-end wines, from a $120 Cavalli right up to a $3,100 bottle of Chateau Lafite Rothschild 1996 (pictured above). With so many top wines being fake – yes, that actually happens here – the WangJiu site promises that all its products are genuine, an assurance also seen on China’s fashion-oriented luxury e-commerce sites.
The newest B2C wine e-tailer actually came online in October to run in a low-profile beta mode. During this testing, WangJiu says it’s seeing an average order of 2,000 RMB ($318).
WangJiu has significant angel investment from Jia Yueting, who has a major stake in the video-streaming site LeTV (SHE:300104) – but the two sites are not formally related in any way.
The fledgling company is also looking to engage wine connoisseurs offline, opening experience stores and private clubs in major cities across China. Wangjiu so far has clubs with cellars in Beijing, Taiyuan, Tianjin, and Hangzhou – with more to come later in Shanghai, Hong Kong, and elsewhere. It’s a pricey but shrewd move to help foster new wine lovers, and a tactic we’ve already seen from rival site Jiumei, which is about to close a series B funding round. There’s also strong competition in this sector from the more established Jiuxian.
The main concern I’d have about the business is that its user-base is largely the kind of people with the resources to travel overseas often, and buy wines themselves at vineyards across Europe. That’s also cheaper than paying China’s significant import tax mark-up – though Wangjiu seems to be quite aggressive with discounts. Also, one enterprising UK wine e-tailer recently launched a Chinese version of its site and ships to Chinese consumers from overseas – that could become a growing (and threatening) trend for Chinese services.
[Source: InvestChina – article in Chinese]