(This editorial is the executive summary of an exclusive VitaBella report)(More wine news on www.vitabella.fr) Wine market in China is growing very fast and specialized wine retail shops still need to develop all over the country. For that reason, new opportunities are considered by wineries willing to gain rapid market shares and brand awareness. An acclaimed Bordeaux Chateau, Domaine de Chevalier, understood this situation very well and decided to move forward. In a recent article, Wall Street Journal wrote that "the premium winemaker has an agreement with China Petroleum & Chemical Corp. to peddle its Bordeaux in 110 stores across China, according a report by Shenzhen Special Zone Newsletter." (you can read the full article in VitaBella Wine Gossip, Edition December 15th)
Can this move be a success in a short term? in the long term? With a strong distribution network throughout China, Sinopec is a big player in the oil industry. So partnering with them and leveraging on a large daily traffic at the pump could make sense for any company that wants to develop sales rapidly in a huge market. Moreover, with the increasing problem of counterfeit wines, Domaine de Chevalier can propose its bottles in some "reliable" shops that chinese fine wine lovers are looking for. In terms of brand image, success will be guaranteed if Domaine de chevalier makes sure that labels are effectively seen and promoted nicely. The impact will not be the same if wine cases stay between oil bottles and car washing products, or if they are displayed in a nice way that would immediately attract eyeballs.
A concern for Domaine de Chevalier may be the professional qualifications of the people working in the gas stations. Does this workforce know about wine or do they need to be trained to talk about wine and more particularly about Domaine de Chevalier? Or do we consider that buying a bottle of Domaine de Chevalier can become an "impulse buy". Knowing that we talk here about wines that cost in the range of 600 yuan to 700 yuan (US$90 to $105), I am not sure that the "impulse buy" effect has much to do in this category level but the Chinese market is so unpredictable...In fact, as Wall Street Journal mentions it, this won’t be the first wine sold at Sinopec. Their gas stations have already displayed and sold Great Wall wines, one of the country’s leading labels.
As a conclusion, this new venture for Sinopec (they have been selling products other than fuel for two years now), seems to develop well. And going high end is a way to answer demands from a chinese market that develops rapidly in fine wines. If, on a long term, Domaine de Chevalier should be aware that its wines may be referred as "the gas station wine" (in fact, this may have a negative impact if communication is not properly handled), selecting a limited number of gas stations (110 stores in China) is a first good step for the wine estate. This may open new opportunities in the future, with a broader distribution. It will also give time to both partners to know each other better. And if today only 15% of Sinopec's 95,000 stations sell nonfuel products, such as wine, we can easily figure out the huge potential for such a deal if China Petroleum & Chemical Corp. decided to implement this approach throughout their network. China is full of opportunities for fine wines and Olivier Bernard, owner of Domaine de Chevalier, understood it very well at an early stage.(More wine news on www.vitabella.fr)
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About Me
- Guillaume Jourdan
- Guillaume Jourdan founded VitaBella – a Wine Marketing & Communication Company - in 2004 and has helped more than 50 international wine estates to develop brand awareness and improve brand image by building customized strategies. He lives in Paris (France) and can be followed at VitaBellaWine on Twitter or Vitabella Wine on Facebook. As consultant, his experience is as deep as it is diverse encompassing the disciplines of advertising, branding, sales promotion and public relations. Most notably he has worked with companies in a strong international environment and had to deal with complicated issues in American, Asian and European countries. As Wine expert, he has a deep knowledge of old vintages (especially Bordeaux from 1900, Burgundy and Rhone Valley) and a very good understanding of most of the fine wines produced both in Old and New World. He is the coauthor of The impact of Label Design on Consumer Buying Behaviour, two VitaBella – Phebos reports that helped the wine industry to make changes on labels in order to increase sales and profitability. Guillaume studied Business School in Paris and Master of Business Administration at Trinity College in Dublin (Ireland).
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