Alibaba’s Tmall has welcomed a host of international brands onto its platform over the past months from Timberlands to Levi’s, and they are now targeting one of the country’s fastest growing vices: fine wine.
The Chinese internet giant revealed a partnership yesterday with Constellation Brands yesterday, the parent company of Robert Mondavi wines. The agreement will see a a handful of Mondavi wines sold on the Tmall Global platform, including a pinot noir and a cabernet sauvignon.
China’s appetite for fine wine has exploded in the last decade and a half, with consumption up almost 50% since 2000. The market took a hit in 2014 following Xi Jinping’s government austerity program, which aimed to crack down on corruption and frivolous spending by government officials. The policy had wide scale effect on restaurants, wine distributors and other consumables.
Those selling wines in China now pin their hopes on an increasingly wine savvy growing middle class, who have an appetite for travel and an appreciation of foreign wine. Alibaba’s move is a no-brainer, as Chinese tourists to the Mondavi winery now make up almost a third of their visitors. Famously, retired Chinese NBA player Yao Ming bought grapes from Napa Valley to launch his own wine label in 2011, which raised the profile of the American wine region back in China where he enjoys a star status.
Chinese people have been early adopters when it comes to buying their alcohol online. A recent report on the country’s group buying sites showed that food and beverage sales amounted to 60% of total sales at 48.3 billion RMB ($7.76 billion USD).
There have also been a number of successful entrants in China’s O2O wine, beer and spirits delivery market. In July this year liquor e-retailer Jiuxian raised $80 million USD from a series of sate owned banks. The same company runs a specialized wine division called Jiukuaidao [Alcohol Coming] which partners with around 100 wine enterprises.
Alibaba’s partnership with Robert Mondavi wines also marks the opening of a new specialized mall, “Tmall Vineyard Direct,” where it s expected that more high profile foreign wines will soon be added. The deal will hopefully boost the profile of American wines in China, exports of which have dwindled in the past year. Though they have a long way to go, with French wines accounting for over a third of imported wines as China’s favorite foreign producer.
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