Oliver Zhou of Vinehoo | Online retail, Shanghai customers and wine in China

By Jim Boyce | I recently talked to a bunch of trade people for a Shanghai retail story in Meininger’s Wine Business International. I could only use a small portion of their comments so I’m running excerpts here.

One interviewee was vinehoo managing director Oliver Zhou. vinehoo began in 2004 as a forum for wine fans, expanded a few years later to online retail, notably flash sales, and is also involved in many other areas, including with trade fair ProWine, the China Wine List of the Year, and operating a Tmall store for Australian wineries.

On Shanghai residents as wine trendsetters:

“One thing I’ve observed is that Shanghai people are very quick adapters, they are always leading trends… The first adapters of Wine-Searcher, the first adapters of French wine other than Burgundy, the first adapters of Italian and Spanish wines. They are explorers.”

On serving niches through vinehoo:

“We are surprised at how many people in Shanghai are interested in wines from regions other than the best-known ones. People are discovering wines from Greece. [They] are highly interested in premium Greek wines. Customers are even open-minded to mead. Mead is one thing no else has sold in good quantities and we have sold quite a lot.”

On Shanghai’s wine rank against other cities:

“My personal opinion is that if Shanghai is 100, Beijing is 30 and Guangzhou is 35 or 40. Shanghai is so way ahead of everyone else. Just look at the number of wine events and wine shows and international operations that have headquarters in Shanghai, such as Treasury Wine, Constellation, MHD and Pernod Ricard.”

On Shanghai and wine business opportunities:

“Just saying Shanghai is more advanced than other parts of China doesn’t mean it’s the best place to conduct business. The professional side of business, yes, if you want to build an image, if you want do something that looks awesome and wows people. But I’ve been to some cities with more business potential than Shanghai, even Beijing.”

On what differs vinehoo from other online retailers:

“yesmywine, 1919, jdcom, jiuxin.com and others are not really our competitors to be honest. Yes, we are a b2c [business-to-consumer] company—at the moment we’re two-thirds to one-half a b2c company—but I don’t see those as our competitors because we don’t cater to the same customers. They cater to people not so much on quality but on price sensitivity… Of course, there are always a small number of people on those websites who are highly skilled, highly knowledgeable wine lovers, but more of them are very entry-level. Our customers are well-educated, with high incomes, with a quality rather than a price consciousness.”

On what vinehoo’s customers want:

“They care about what’s in the bottle, about the story behind each bottle, and the kind of effort each vintner put into it. They seek wines that are always high in price-quality ratio… We were the first website, the first source in Greater China, to introduce Wine-Searcher and how to use it for those who are not so skilled in English.”

On companies seeing opportunities online:

“We work with over 100 different supplies at the very minimum and pretty much all of the major fine wine importers in China. That was not the case three years ago, we only worked with a fourth or a fifth of [them]. So I think people [in the trade] are seeing a lot of opportunities in online, especially at the high end. The high end is hard to sell but there is still a decent market for it.”

On online sales as a last desperate resort:

“Many people will realize that online is not a danger to offline but a good supplement to it. Online isn’t everything, it’s not a cure all. If you don’t sell your wine, then dump it online? No, it doesn’t work like that. It takes a lot of effort to communicate the value, the image, the story of a brand. That’s exactly what vinehoo’s online business aims to do.”

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