JD.com: preventing fake wines online

By Maxime Lu / 陆江   ( 21 April 2016)

Published on DecanterChina.COM, Chinese version of Decanter.

 JD.com, one of China’s biggest online retailers, spoke to DecanterChina.com about how they choose producers for their fast-growing wine sector and the efforts made in preventing fake wines.

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·Click here to read Part I of the interview on the scale and current state of JD.com’s growing wine business.

Direct import: choosing reputable suppliers

Among wines directly sold by JD.com, there are two types, said ZHAO Dabin, head of the wine department of JD.com. One type is wines bought directly by JD.com from overseas producers or their Chinese agent. ‘We always choose reputable suppliers in the business,’ said Zhao.

The other type is the big and famous wine brands owned by major companies and groups. ‘They have their own quality control system, so fake wines won’t be an issue.

’When working with agents, ‘we usually involve the producers as well to guarantee the authenticity of these products’, he said.

‘For any wine we choose, we’ll conduct internal tastings. This can, to some extend, assess the quality of these wines’, said Zhao Dabin.

‘Our reputation has always relied on importing authentic and reputable goods.’

Merchants: play by the rules

Unlike direct import brands, the online retailer has ‘relatively less control’ over registered merchants, said Zhao.

Instead, merchants need to sign ‘rigorous agreements’ with JD.com when they seek to start up a shop with the retailer. They also need to pay a deposit to the retailer as a guarantee of the quality.

Should any registered merchant sell fake wines, they need to pay ‘a minimum fine of 1m RMB or 10 times of the total sales of these fake wines, whichever is highest’.

To supervise the merchants, JD.com has a ‘dedicated quality-control department’, who would regularly examine random samples from the portfolios sold by merchants.

‘We also have a third-party institution who regularly visits our warehouses, as these warehouses temporarily store some merchants’ wines before shipment. They are responsible for sampling and examining the quality of these wines.’

A ‘consumer experience department’ was set up with the involvement of LIU Qiangdong, Managing Director of JD.com, who has a ‘personal interest in wine’, according to Zhao.

The department regularly purchases wines from JD.com, in order to test the quality of the wines like a consumer.

Choosing the right producers

In terms of choosing direct import brands, ‘we try to cover the most famous wine regions in the world, namely the top three or five producers of each region,’ said Zhao, adding that these wines need to be ‘value-for-money’.

JD.com also buys wines from domestic distributors with ‘less rigorous criteria’ than direct import, ‘but we would choose carefully’.

‘Because we have an enormous sales volume, we need the local distributors to give us a very competitive price,’ said Zhao.

When seeking for a producer in a certain region, ‘we would firstly try our connections in the wine circle, or ask local trade bodies to recommend producers for us,’ said Zhao. The online retailer also sends their buyers to trade fairs including Vinexpo and ProWein to choose wines at the scene.

For producers who directly get in touch with JD.com, the retailer would ask for samples to do a blind tasting first. ‘We may choose a few; then we will discuss with the producers about prices and how we can work together.’

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Image: ZHAO Dabin (right on the front) and LIU Qiangdong of JD.com signing agreement with Treasury Wine Estates·

Storage and logistics

How to store and deliver the wines has been one of the most difficult tasks for start-up online wine shops in China. Upon receiving investments, many online retailers have reported spending them on developing a storage and logistics system.

Delivery is not a major problem for a big-scale and mature online retailers such as JD.com, said Zhao Dabin.

Besides having their own express delivery network, ‘we package our wines in the same way as delicate electronic products such as mobile phones.’

As for storage, JD.com currently uses their food storage warehouse, some under normal temperature, some with constant temperature and humidity, to store their more affordable wines. ‘These are not professional wine cellars,’ admitted Zhao, ‘Considering we mainly store fast-selling wines in these warehouses, and it takes only a month for the wines to enter and leave the warehouse, the influence should be minimal.’

Fine wines, certainly, enjoy more professional storage environment, said the retailer.

 

Wine shopping tips on JD.com

Ask JD.com: I always find various sales deals and discounts vouchers for wines on JD.com. But why are these wines discounted?

Zhao Dabin: In most occasions these wines are slow sellers from our merchants, which is why they need to be pushed with discounts.

Also as we buy wines in big volume, we usually get very competitive prices, hence the discount.As for the vouchers, they are usually paid for by JD.com, with some help from our partners as well. Therefore, it’s very possible for people to find wines sold under the average market price on JD.com.

Translated by Sylvia Wu / 吴嘉溦
All rights reserved by Time Inc. (UK) Ltd.

 

 

JD.com: Mapping the landscape of online wine sales in China

By Maxime Lu / 陆江

Published on DecanterChina.COM, Chinese version of Decanter.

2 March 2016

In recent years, online retailers and their highly efficient delivery systems have largely changed people’s shopping habits in China. Such changes made online shopping one of the most important and fast-growing channels for Chinese consumers to purchase wine.

Read our exclusive interview with ZHAO Dabin, head of the wine department of Chinese online retail giant JD.com, to learn about the scale and current state of its rapidly growing wine business.

134951_jd-com-zhao-dabin-liu-qiangdong-twe-signing-croppedImage: ZHAO Dabin (right on the front) and LIU Qiangdong of JD.com signing agreement with Treasury Wine Estates

The scale of the business

As one of the biggest online retailers in China, JD.com launched its wine business at the end of 2010, ZHAO Dabin, head of JD.com’s wine department, told DecanterChina.com.

Wines sold on the site come from two sources, Zhao explained; JD.com works as an importer to buy wines from abroad and sell it directly, but it also serves as a ‘shopping mall’ for wine merchants to host their own shops.

The wine sales from both channels now account for a quarter of the retailer’s total annual sales of alcoholic beverages, which is expected to fetch CNY10.5bn (GBP1.1bn) in 2016.

‘Chinese white spirit (Baijiu),’ said Zhao, ‘still occupies the vast majority of the sales.’

In 2015, JD.com imported and sold CNY400m’s worth of wines itself, and the number is expected to triple in 2016. The sales through the merchants, on the other hand, are expected to hit CNY1.5bn, three times the amount of 2015, according to the retailer.

These estimates may still be ‘too conservative’, said Zhao, as JD.com has already sold 100m RMB’s worth of wine on its own from the start of 2016 to 20th January. ‘For January only, we have achieved four times the sales of last year.

Direct import vs merchants

Though JD’s direct wine import and sales business is growing rapidly, Zhao doesn’t believe that it would pose significant threat to merchants who sell their wines through JD.com.

‘Not all the wines are suitable to be sold by JD.com,’ explained Zhao.

For brands that are dealt by JD.com directly ‘they need to share a fixed amount of gross profit with us’, and their sales figures need to ‘keep up the pace’ of the fast-growing online retailer. JD.com would evaluate the performance of its own brands, and ‘eliminate’ the underperformers.

In fact, currently wine merchants take up a bigger chunk of the wine sales on JD.com, said Zhao. More and more merchants come organically or are invited by JD.com to build their own online stores. ‘The number of merchants defines the growths of the sales.’

The vast consumer base also suggests the size of the market. At the moment, wine consumers on JD.com are mainly office workers from Beijing, Shanghai and Guangdong, said Zhao. In late 2016, the retailer plans to reach out to villages and third and fourth tier cities.

‘Most of our wine consumers are still at entry level, though there are so many wine brands out there,’ said Zhao, pointing out that ‘only 3% to 4%’ among JD.com’s vast number of registered users buy wines at the moment. ‘There’re still plenty of room to grow.’

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Image: Chinese consumers at 2015 Decanter Shanghai Fine Wine Encounter

Domestic wines vs Imported wines

In 2015, China has imported significantly more bottled wines compared to 2014. The Free Trade Agreement signed between China and Australia is believed to pose more challenges to China’s domestic wine producers in the next few years.

Currently domestic wines account for 30% of JD.com’s self-run wine business, whereas imported wines take up 70%. Zhao believes that other major online retailers, such as Tmall.com and Yhd.com, rely ‘even less’ on domestic wines.

Among the merchants on JD.com, 15% of the brands they sell are domestic, although the sales volume of domestic wines is ‘slightly more’ than that of imported wines, said Zhao.

Though the growths of imported wines are constantly put under the spotlight, in the third or even fourth tier cities in China, domestic wines still dominate the market. ‘Imported wines still can’t break into the smaller cities,’ said Zhao, ‘although in the first and second tier cities, the sales of imported wines are almost equal to that of domestic wines.’

Facing such challenge, domestic producers are seeking to expand their business.

The two biggest wine producers in China, Changyu and Great Wall, ‘are still among the top three best-selling brands on JD.com,’ said Zhao, adding that the two brands alone take up over 90% of the sales of domestic wines on the platform.

134953_jd-interview-decanter-2015-shanghai-fine-wine-encounter-reading-bookletImage: Chinese wine lovers at 2015 Decanter Shanghai Fine Wine Encounter

The most popular price ranges

The top countries for imported wines on JD.com are led by France and followed by Australia, Chile, Spain, Italy and America. The most popular price ranges on the online retailer, according to Zhao, are ‘under 50RMB’ and ‘50-100RMB’.

The ‘under 50RMB’ tier is dominated by Spanish table wines. Among wines priced 50-100RMB, consumers can find entry-level wines from the Domaines Baron de Rothschild (Lafite) and branded wines such as those from Penfolds Rawson’s Retreat, Yellow Tail and Casillero del Diablo of Concha y Toro.

The range of ‘100-200RMB’, however, showed the most significant growth among JD.com’s self-run brands, said Zhao.

‘We work as an importer and retailer at the same time, so we won’t add too high margins. This is a very popular price range in the general market as well.’

JD.com is also keen to develop its fine wine portfolio, namely those priced at 200 to 500 RMB. The sales during 2015 and the Spring Festival period in 2016 showed the potential of these wines.

‘None of the online retailers would satisfy on selling only the entry-level wines. We need to go upstream.’

The effect of the austerity policy

‘The austerity policies have brought no negative effect to JD.com what-so-ever; if anything, it was beneficial to us,’ said Zhao.

‘The anti-corruption drive mainly tackled the mid-to-higher range products. JD.com, on the contrary, is a retailer targeting the mass consumers.’

The bubbles of the mid-to-higher range have now burst, bringing the price back to the reasonable range. ‘More and more people were looking for value-for-money wines, which was great news for us,’ said Zhao. ‘While overall the industry struggled to grow, we managed to triple our wine sales from 2014 to 2015.’

Choosing the right supplier

Now five years in the wine business, JD.com believe its biggest challenge comes from the supply chain.

The suppliers can’t necessarily foresee the scale of the sales, thus may struggle to prepare enough stock for the fast-growing retailer, said Zhao.

Facing such challenges, in 2016 JD.com intend to re-evaluate its 1300 wine products by regions, and to focus its resources on fewer but better brands and suppliers. However, the adjustment should not interfere with the growth, Zhao said, ‘we should be able to keep growing at the rate of 300% to 400% (per year).’

About 2016

Speaking about China’s wine market in 2016, ‘I don’t expect an explosive growth,’ said Zhao.‘We still don’t have enough wine consumers in China, which is why we need to encourage more consumers to start drinking wine. Meanwhile, we need to further control the distribution costs, and provide down-to-earth prices to consumers.’Coming next month:JD.com: Controlling the authenticity and quality of wine products

Translated by Sylvia Wu / 吴嘉溦

Source:    https://www.decanterchina.com/en/knowledge/people/importers/jd-com-mapping-the-landscape-of-online-wine-sales-in-china-part-i

All rights reserved by Time Inc. (UK) Ltd. No part of this publication may be reproduced, distributed or transmitted in any form or by any means without the prior written permission of Decanter. Only Official Media Partners (see ‘About Us’ page on the website) of DecanterChina.com may republish part of the content from the site without prior permission under strict Terms & Conditions. Contact china@decanter.com to learn about how to become an Official Media Partner of DecanterChina.com.

京东:中国葡萄酒电商的发展现状(规模与模式篇)

作者: 陆江 (Maxime LU)

(本文已发表于Decanter中文版-醇鉴中国,转载请标明出处和署名)

 近年来中国的葡萄酒市场变化巨大,在线零售业对中国人消费习惯的改变直接反映到了葡萄酒行业,葡萄酒电商成为葡萄酒销售的重要渠道之一,也是增长最快的渠道之一。

DecanterChina.com撰稿人陆江,独家专访中国最大的电商之一京东(JD.COM)的葡萄酒业务负责人赵大彬,听他详细介绍京东葡萄酒业务的发展现状以及面临的挑战。

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图片:京东集团葡萄酒部门负责人赵大彬(右下)与京东董事长及CEO刘强东(右上)与澳大利亚富邑集团(Treasury Wine Estates)签署合作协议。

销售模式和规模

京东开展葡萄酒业务始于2010年底。葡萄酒业务负责人赵大彬介绍说,京东的葡萄酒业务分两种模式:一个是自营模式,也就是从进口商或国外直接采购,加一部分利润卖出去;另一个是平台模式,即招一些商家开店,以他们自主经营为主,类似“购物中心(shopping mall)”。

葡萄酒自营和平台渠道(销售额)相加,目前约占京东各类酒种的四分之一。2016年,京东预计在酒类产品取得105亿总销售额。赵大彬介绍道,无论自营还是平台,“中国白酒还是占到主导”。

2015年,京东葡萄酒自营部分销售额超过人民币4亿元,2016年预计达到12亿,平台部分则预计达到15亿左右,“是2015年的3倍”。不过这个预计可能“有点保守了”,赵大彬表示,截止到2016年1月20号,京东自营葡萄酒部分的销售额已经达到一个亿,“一月份是去年(同比)的四倍”。

 

自营和平台

尽管自营部分发展迅速,赵大彬认为京东自营业务和平台(其他进驻商家)“还没有到针锋相对矛盾的状态”。

首先,适应自营和平台两种模式的葡萄酒产品有所不同。“不是所有的品牌都能做自营的。”赵大彬表示,京东自营葡萄酒不仅需要提供“固定的毛利共享”,销售额也必须“跟上脚步”,京东则会对这些品牌的表现进行评估,也会淘汰一些表现不好的品牌。

目前平台的经营规模相比自营“略大一点”。越来越多商家自主进驻京东销售葡萄酒,或由京东招商进驻,“商家的数量决定了我们平台的成长性”,这与京东本身的业务经营模式是同样的,赵大彬表示。

京东葡萄酒的消费受众现阶段主要集中于北京、上海和广东,以上班族人群为主,赵大彬介绍道,京东准备在2016年下半年“深入到农村,渠道要下沉,到三四线城市”。

“目前葡萄酒消费者还处于初级的入门阶段,葡萄酒品牌也非常多。”而京东为数众多的会员中“仅有百分之三到四的人在买葡萄酒”,赵大彬认为,这意味着其中还有很大的开发空间。

 

国产酒vs进口酒

2015年中国葡萄酒进口明显回升,加之中国与澳大利亚签署自由贸易协定,中国本土酿酒商被认为将面临更大的挑战。

目前京东自营部分国产葡萄酒占销售额的30%,进口葡萄酒为70%。赵大彬表示“30%在电商里还算做的比较大的”,他认为天猫,一号店等其他电商平台销售的国产葡萄酒比例更低。而平台部分,国产品牌占比约在15%左右,“主要是进口酒”。在销售数量上,“国产酒比进口酒要稍微多一点点”。

尽管进口葡萄酒势头强劲,国产葡萄酒在三线四线或更小的城市依然拥有极大的消费量,“进口酒还是进不去”赵大彬介绍道,“但对于一二线城市来讲,进口酒越来越接近他们的市场占有率,经常五五分。”

面对这样的市场现状,本土酿酒商正在寻求业务的拓展,张裕集团以及拥有长城品牌的中粮集团均已投入进口葡萄酒业务。

尽管如此,“在京东葡萄酒定期发布的排名里,张裕和长城都能进葡萄酒品牌销售排名的前三位,国产这两家占国产葡萄酒总额的90%以上。”赵大彬表示。

 

最畅销的葡萄酒价位

在主要进口葡萄酒来源国中,在京东的销售排名从高到低为法国,澳大利亚,智利,西班牙,意大利和美国,赵大彬介绍道,销售量最高的是“50元以下”和“50元到100元”两个价位段。

50元以下的葡萄酒以西班牙日常餐酒为主。50元到100元的价位可见拉菲罗斯柴尔德集团(DBR)旗下的部分产品、澳大利亚Penfolds洛神山庄(Penfolds Rawsons Retreat)、黄尾袋鼠(Yellow Tail)以及智利甘露集团的红魔鬼(Casillero del Diablo)等品牌。

赵大彬表示,自营葡萄酒产品中,100元到200元之间的葡萄酒销售提升明显。“我们做直采,既是进口商,又是面对消费者的零售商,我们加利润不多,这价位段本身也是整个市场的重点需求范围内的。”

200元到500元是京东在精品葡萄酒(Fine Wines)上重点发展的价位。赵大彬认为,2015年以及2016年春节的销售显示了这个价位的潜力。“所有电商不可能只卖入门级的低端产品,未来需求都要往上拓展。”

 

反三公与经济发展放缓的影响

和一些传统高端酒商不同,反“三公”政策“对我们没有一点负面影响,反倒对我们有促进作用。”赵大彬表示。

“三公限制主要限制的是一些中高端价位的产品,对于我们京东来讲,我们是一个零售商,目标人群是大众消费者,市场定位正好错开。而且因为中高端产品泡沫基本被打掉了,价格回归理性。越来越多的人追求性价比,其实对我们有很好的促进作用。整个行业虽然增长受挫,可我们京东葡萄酒业务从2014到2015增长了三倍。”

 

筛选供货商

京东葡萄酒业务已开展五年,赵大彬认为目前面临的最大问题是上游供货商跟不上其快速的增长。供货商“没有那么好的前瞻性”,在供应酒的种类、库存数量等方面“不一定跟得上”。

面对这一挑战,2016年京东准备对目前的1300个SKU(最小存货单位)细分到产区进行评估,“优中选优,再精简品牌,最后是精简供货商”。但是业务调整并不会影响增长速度,赵大彬表示,葡萄酒业务“会保持在百分之三百到四百的增长速度”。

 

2016年市场趋势

赵大彬认为,2016年中国葡萄酒市场整体发展“速度不会是爆发”,“消费者数量还是少,现在还是要鼓励消费者去喝酒,同时尽可能控制各环节的成本,为消费者提供实在的价格。”

(采访和撰文:陆江Maxime)

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