By Jim Boyce | I recently talked to a bunch of trade people for a Shanghai retail story inÂ Meiningerâ€™s Wine Business International. We could only use a small portion of their comments so Iâ€™m running extra excerpts here.
One of them was Charles Carrard, vice president of importer and distributor Paradox, who covered many topics such as hypermarket trends, online wine sales, sourcing Chinese wines and the company’s experience with its own restaurants. I’ve included excerpts below.
On the hypermarket scene, an area where Paradox is very active:
Hypermarkets are targeting real people, people who discover wines, people who are part of the middle class, and not the happy few who want to show off in a restaurant or with gifts. A few years ago, people were buying wine according to the prestige of the brand or for the packaging as they were buying mainly for gifting.
Today the big change is that customers care less about brands and more about wine, such as grape varieties or terroir. Apps and travel have made them more aware of imported wines and their value. More and more consumers go for wine to drink at home with their relatives, with gifting being only more important during Chinese New Year and Mid-Autumn Festival. What I say here is true for first-tier cities, it still not the case in second- and third-tier cities.
On the growth of online wine platforms:
Onine is a chimera for imported wines in China. Today, not a single company selling wine online makes profit, not a single one, even if some pretend the opposite. The delivery costs are huge and customers go for cheap wines, with an online price of less than 60 yuan per bottle.
It doesn’t mean this will always be the case, or that we cannot use the internet to sell wine. I believe a lot in the O2O [online to offline] model and this year Paradox will launch a new way of buying wine, in partnership with our retailersâ€”we now deliver to more than 2,800 stores all over China.
On online retailers directly importing wines:
I cannot say too much as this might break some confidentiality I need to keep with my customers but basically there are not a lot of very successful stories with direct imports. The key to sales remains the promotional salespeople in the stores. Paradox has now more than 1,000 of these people paid every day to educate and help consumers.
On adding Chinese winery Hansen to the portfolio:
For us, wine is more about people than business. For example, we run and ask our teams to run with us in marathons, in places like Shanghai and Dalian, to raise money for different charities. We believe the success of a company is based on people and being social, that we are not a only a wine and spirits importer, but have a social responsibility toward China.
So when I met [winemaker] Bruno Paumard a long time ago, we had many exchanges about his work with Hansen in Inner Mongolia. Bruno and I become good friends and I decided to list his wine in Paradaox restaurant. I wanted to show my guests that China can do amazing wines for a good priceâ€”I sell Hansen for around 200 rmb per bottle in the restaurant. I didn’t want to serve a niche with some wines around 700 rmb, even if they are very good. My job is to educate the mass market, not the niche, as the future is the middle class.
Our customers enjoyed the wine a lot, so we decided to propose it to Carrefour. Carrefour was very interested for a lot of reasons, including their position as a pioneer in China for imported wine and the wine category in general. So they wanted to be the first major retailer in China to offer their customers a Chinese wine, made by a French wine maker, with a lot of medals.
On going beyond retail by opening Paradox restaurants:
Coming from Lyon, the capital of gastronomy in France, and loving good food for a good price, I found that Shanghai was not offering what I was looking for in terms of French restaurants. I sought a simple bistro with great food quality, reasonable pricesâ€”and wine! As an importer, it was easier for us to have a wine list with great wines for very affordable prices.
I opened the restaurant in 2006 with a French chef, then my boss invested in it later, and we named it after the import and distribution company.
The consumption there is very different from retail, so it is a good way for me to understand this channel. Our wine company is 100-percent focused on off trade for now, but we never know what the future will bring.
We attract Chinese consumers, who come around 6 PM, then foreigners between 7:30 PM to 8:30 PM, then Japanese and Korean coming after dinner, around 10 PM, for oysters, Champagne and whisky.
The Chinese consumers love French food, and love to have a French guy talking to them about the wine they are going to enjoy with their meal. I consider Chinese and French very alike. We love food and drink. France has wine, China has tea, both with vintages, terroirs and different varietals. We have cheese, they have tofu! And both people enjoy having dinner for hours!
I always enjoy a lot spending time in the restaurant (when I can) to share with my customers some good and affordable bottles of wine. Especially for expensive wines, I try to keep the same price in my restaurant as in retail!
Note: The next Paradox restaurant is slated to open soon in Beijing.
Note: Check out other interviews in this series, including withÂ Simone InContro of VinItaly, Oliver Zhou of Vinehoo, Alberto Fernandez of Torres / Everwines, Marcus Ford of Pudao and Campbell Thompson of The Wine Republic.
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