A Wine School in Shanghai

Aug 06, 2010 5 Comments by

This story starts with an e-mail. I contacted Jia after visiting her blog. I was really interested in meeting a young Chinese woman who is fond of wine. Jia was previously a student in the city of Champagne, Reims and is now the director of the WWE (World Wine Education) in Shanghai. After a few e-mails she agreed to meet me at her workplace, a temple dedicated to wine lovers in the very Chinese district of Pudong

The place is huge. Standing in this liquor shop located at 258 Lanxi Road, you will have the feeling of being in a big mall committing itself to alcohol only. But I can’t find a single bottle of wine in this temple of spirit. “Weird”, I say to myself as I am looking at the bottles of Cognac. Here is Jia arriving, smiling, and followed by a few friends who are here to visit with me. As I am following Jia, I get to be aware of my mistake! You enter the wine shop by a mere visible door in the back of the “spirit mall”. Bizarre, isn’t it? Jia explains to me that this aims to let the Chinese customers feel at ease. “The Chinese consumer could feel like he is not part of this world” says Jia, “When he comes into our liquor shop, it is easier for him to make the transition from spirits to fine wines. 9519 liquor shops are quite famous in Shanghai. This is our strength. We are not focused on wine only. » This place is more than a wine shop hiding behind a liquor shop. This is a palace. You can find new world wines on the first floor whereas European wines are on the ground floor. At the right wing are gathered the finest wines of the collection. Bordeaux finest wines account for the main part of the selection: Petrus (1983,…), Château Latour (1937,1943, …), Château Margaux (1957, 1958, 1962,…), etc…

After this interesting visit, I am eager to ask all kinds of questions to Jia. Let’s interview her then !

Zhongguo Wine : Good afternoon Jia. Can you present who you are and what your mission is in 9519 company ?

PENG Jia: Good afternoon. I graduated at Reims University in 2007 with a specialization in the wine and spirits business. In 2007, I took part in a wine tasting contest, the “Wine Women Awards”. And I managed to get to the final round. I ended up 10th (out of 391 candidates). This has helped me to gain the reputation in the wine market, in China especially, as I was the only Chinese who succeeded in getting as far as into the final. I then joined Mr Yu’s business who is the owner of the liquor shops 9519 in 2007. He needed an expert in the wine business to help him to define the strategy and to get advices on purchasing. Besides, I am still keeping on writing articles for wine reviews in China. Usually, it consists of interviewing wine producers. I am therefore often in France.

ZW: Why did your company invest in the wine business, whereas it had been focused on spirit so far?

PJ: Mr Yu has been a successful businessman so far, thanks mainly to the exclusive distribution of the imperial liquor Guo Jiao 1573. Guo Jiao means “Cave of the country” and has been produced since 1573. In 2007, he got interested in the wine business for 3 main reasons: firstly, China has just become a member of the WTO, which means that importing taxes get drastically lower. Secondly, alcohol problem due to the consumption of liquors is a big issue in China at that time. Red wine is then pushed by the government considering it as a healthier way to use alcohol. Last but not least, the world population is, as everybody knows, getting bigger and bigger and feeding tomorrow’s China is already a matter of significant importance. That is why Chinese officials choose to keep crops feeding the population rather than to use it for distillation.

It was then logical to create a wine business. We did not only invest in a wine shop but also in a wine import company, in a wine review getting people more familiar with the wine culture and in a wine education center of which I am the director.

ZW : Does the company import all its wines through the import company ?

PJ: Today, we have about 2000 different wines to be sold. Wines imported directly through our import company account only for 20%. Actually, big import companies (ASC, Summergate,..) are the exclusive distributors of some of the most famous brands on the Chinese market. These brands have to be offered to our customers. Therefore, we have to buy them to these distributors. Today, this accounts for 80% of our purchases.

ZW : As we were visiting the wine shop, you told me that the Chinese consumer needs to be educated. What is your strategy to communicate with the Chinese consumer?

PJ: You cannot sell a wine in China the way you sell it in France or in other Western countries. As in every country and on every market, you have to listen to what the customer needs. Today’s Chinese market is flooded with wines from every producing country. But there are no big brands. We have created a distributor brand called Cramans of which we are the only distributor in China. Wines sold under this brand are French wines, AOC and those are of a good quality/price ratio. We have to simplify what we offer to the customer who is lost in the diversity of the supply. The consumer does not need to be aware of the difference between Puilly Fuisse and Puilly Fume.

ZW : How do French regions, that are the voice of the producers, communicate ?

PJ: I asked to be sent posters to communicate on the different producing French regions in the World Wine Education (WWE) in Shanghai. At the BIVB (Interprofession of Burgundy wines), I have been said that they didn’t have the budget to send posters in China… Besides, other French regions invested time and money to defend their producers. Languedoc Roussillon and Cotes de Provence wines have been the most eager ones to communicate at the WWE so far.

ZW: What would you say to a wine producer who is considering the Chinese market as his next move?

PJ: To consider the Chinese market very seriously. Don’t dream! Don’t think that once your wine is in China, it is going to sell itself. Communicating is very important. I want to say this especially to French producers. Chinese market is a difficult and immature one. Yet, it has a big potential. This is surely the most interesting market in the coming ten years. But be careful. Choosing your importer is crucial. You can find a business partner ready to sell your wine in China easily. Only for the first order though… Creating a long term relationship with a serious importer is far more difficult. But this is what you have to look for even before selling your first bottle. Finally, I would not advise a producer whose size is not big enough to try the Chinese adventure on its own.

ZW : What is the aim of the World Wine Education center of which you are the director ?

PJ: The main goal is to educate professionals, Chinese wine producers firstly. If we want to raise the quality of the wine sold in China, it is important to educate the consumer. You cannot educate the consumer if professionals are not aware of the wine culture themselves. Chinese importers are businessmen after all and do not know anything about wine. They import wine without knowing what is good and what is bad. As it is more or less a new business, they do not know which way to follow. As they do not have any purchasing strategy, they import anything and everything and find themselves with  a huge inventory of wine they are unable to sell because they are unable to explain them to the consumer. If only they were educated… Last December, I organized a wine tasting for Chinese importers. We tasted some Loire Valley red wines: Bourgueil. At the end of the wine tasting, 5 professionals came to me to say that they had, from now on, decided to sell Bourgueil rather than Bordeaux red wine. Today, Bordeaux red wines are preferred to be imported because they are what the consumer knows. Chinese consumers are therefore criticized as amateurs of a label rather than a wine. But French producers are responsible for this matter of fact. Producers have to educate their Chinese distributors. Moreover, we can attend to the emergence of a truly wine lovers’ market in China who know wine pretty well and spend a big part of their income in the purchase of wine from all over the world. These amateurs are more than “labels amateurs”.

ZW : Today, 90% of the wine market is trusted by local product while imported wine accounts only for 10%. How can you see this repartition evolve in the future ?

PJ: 90% of the wine market is trusted by 4 Chinese brands: Changyu, Dragon Seal, Great Wall and Dynasty. But this is not by any chance. Some of them have been existed for more than a century, Changyu for instance. They produce a bad quality wine, which is true, but they deserve some consideration because their wines have introduced the conception of wine consumption to the Chinese consumer. Besides, as it is very cheap, it allows almost everyone to be able to consume wine.

New Chinese producers are positioning themselves on another market: the quality Chinese wine. They are backed by foreign investments. Among them, Grace Vineyards that profited from the knowledge of Denis Dubourdieu, the Bordeaux white wine expert, or Polong Pao, the first Chinese wine producer that produces organic wine.

What is important to notice is that a big brand image is crucial on the Chinese market. French wines still account for the majority of the wine imported in China because French wine is considered as a luxury product. Offering a bottle of fine French wine is a delicate gift. However, on the down and middle market, French wines are already beaten by Chilean and Australian wines because they can provide a lower price for a same or even better quality and have a bigger visibility.

In the future, the part of imported wine is going to get bigger. Actually, we have two different markets here. Imported wines do not compete with domestic wines. They are not positioned the same way. We can say that if the wine culture gets better exposition in the coming years, this will benefit firstly to imported wines.

ZW: Thank you Jia

PJ: Thank you Ari

Ari Delacour for Zhongguo Wine

See other interviews:

Interview with Gwenaële Chesnais, Senior Wine Education Manager, Pernod-Ricard China

Interview with Stephane Toutoundji, famous winemaking consultant

Interview with Yann Soenen, Regional Director for Champagnes Mumm and Perrier Jouët

Interview with Nicolas Touchard, Brand Ambassador for M. Chapoutier

Interview with Rai Cockfield, Managing Director of Altruistic Boutique Wines

Interview with PENG Jia, Director of the World Wine Education in Shanghai

News, Wine Education in China

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5 Responses to “A Wine School in Shanghai”

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