Introduction

Chinese market of wine

China is the largest market in the World for consumption of red wine and, within 2020, China will be the major importer of wine in the world.
Until 2012, red wine was seen, above all, as a product to be used on important celebrations and as a status symbol of luxury and power, but since 2013 its consumption was supported by the middle-high class, that sees in wine a symbol of expression of style and education and that begins to appreciate it for personal pleasure and taste.
For this reason, wine consumption in China is at a stage of normalization, where growth is slower, prices are adjusting and consumers are beginning to develop knowledge and curiosity, articulating into precise profiles and creating new requirements for the market.

It's the generation of middle-high income workers, aged between 26 and 35, hyper-connected and hyper-tech, which is pushing for habitual consumption of wine and deepening its knowledge, with particular attention to aspects of both health and sociality.

Italian positioning

In 2015 and 2016, Italy was the first Country in the World for quantity of produced wine and it is distinguished for its ancient tradition in production high end and top notch wines.

Wine tradition was well established in Italy way before the Roman Empire, which raised the importance of wine to the one that it has in contemporary age, determining techniques and features, such as the importance of the geographical origin and of the vintage, and expanding the wine making in all the conquered territories.
Wine, indeed, is strongly connected to the Territory where it is produced and, as a result of the millenary tradition, Italy has 524 geographical designations protected by both Italian and European Union regulations, which is the largest number in the World (followed by France with 415).

Each geographical designation refers to a specific area, a number of different wines can be produced under the same geographical designation, which is regulated by a Disciplinay, with strict prescriptions about not only the origin, but also techniques and procedure for vine growing and wine making.

That's why hundreds of high-end and top notch wines can be solely produced in Italy, resulting in thousands of exclusive labels.

Due to quality and quantity, the match between Chinese Demand and Italian Offer should be very intense, instead this is not happening as it would be expected.
Among the imported wines, Italy holds the fifth position, after France, Australia, Chile and Spain, with a market share of around 10%.
On one hand, it’s clear that the Chinese Market don’t have the right perception and knoledge of the italian wine, on the other hand some responsibilities falls on the italian wine makers that, due to their high number, fragmentation and small dimension, don’t have resources to push sales in China.

Conclusion

► The sales of italian wine in China are affected by two main issues:
1. incorrect product positioning
2. lack of distribution channels and infrastructures

 

Overall Objective

To start a program of promotion and distribution in China of Italian wine from the High Adriatic sea area, creating a brand awreness of the wine from this area connected to cultural and life-style references that can be appreciated by Chinese consumers and using a mix of communication, sales and distribution tools, in support of both end-users and distributors.

Specific Objectives

1. Creating a wine makers network for a common long-term distribution and promotion program in China

2. Realization of a promotion and information campaign, based on the millenary connection between the history of the High Adriatic sea and wines produced in the Territory

3. Realization of a logistic and customs platform for delivering bottled wine to Chinese consumers, through an e-commerce system and other distribution channels

Expected Results

1. Concerning specific objective 1: Establishment of an aggregation of companies, in the form of a consortium or, at least, of a business network, producing wine from the territories of the administrative Regions facing the High Adiatic sea (Emilia Romagna, Veneto and Friuli Venezia Giulia), which aggregate in a joint effort for the development of bottled wine sales in China, taking care of the logistics, the customs, the retailing for the e-commerce channel and the delivering to Chinese distributors and agents, caring for common image and promotion in China

2. Concerning Specific Objective 2: Implementation of a promotion campaign based on the valorization of the connection between the history of the High Adriatic sea and wines produced in such Territory, in association with an evocative image that refers, in ancient ages, to the Roman Empire, the Exarchate of Ravenna and the Repubblica of Venice, and then, in contemporary age, with the production of territorial "Made in Italy", that is a major contributor of to the overall image of Italian life-style in the World (fashion, furniture, food, health, innovation, quality and sustainability).

3. Concerning specific objective 3: Creation of an on-line distribution and sales platform in China, based on both a dedicated portal and distribution agreements with other specialized portals. The platform should also serve as a collection of orders from distributors and retailers.

Activities

Creation of the Network

Creation of an initial group of stakeholders, including district and cluster Organizations and leading consortiums in the wine sector, with reference to the production of red wines, prosecco and still aromatic white wines in the administrative Regions of Veneto, Emilia Romagna and Friuli Venezia Giulia.

The initial group shall act for the definition of rules for the establishment of the network, which should also include mechanisms for involving small and medium-sized producers.

The initial group shall identify the best aggregation formula with formal recognition and legal subjectivity (business network, consortium, limited consortium, trade association, etc.), all the economic subjects functional to the success of the work programs, including instrumental companies, also established in China, and the contractual formulas that will bind all involved parties.

Aggregation will have to define an operating team, which will define and execute detail plans and budgets.

Operational and financial plans should be implemented according to business models adapted to the timing and modalities of the Chinese market, taking into account, where appropriate, changes in the actions and timing to seize public funding opportunities and private financial investors.

In particular, the operating team shall preside over the detailed planning of promotion and communication campaigns and the management of the on-line distribution and sales platform, including the logistic and customs system.

 

Promotion Campaign

Italy is known in China for the image of life-style following the traditional "Made in Italy" (Fashion, Furniture, Design) and the cultural heritage that exert a great fascination.

China identifies parallels with Italy, pairing the Roman Empire to the Chinese Empire, and historical contact points, through the well-known figures of Marco Polo (Mǎ kě·bō luó 马可·波罗) in the 13th century and Matteo Ricci (Lì Mǎdòu 利瑪竇) in the 16th century.

The importance of Italian culture and history and its matching with the Chinese ones were the theme of President of the Italian Replic Mattarella's visit in China on February 2017, and this is the starting point for a communication campaign that must tend to position Italian wine as a symbol of life-style.

The figure of Marco Polo recalls the history of the ancient Republic of Venice and its Territory, up to the Roman Empire, passing through the Exarchate of Ravenna. As Places and History shaped the know-how and entrepreneurship that created the "Made in Italy", so the combination of Wine, Places and History is the basic element for building an image of a Wine Of Excellence, because it is part of the very same concept of life-style.

The main topic of the campaign, therefore, will have to focus on life-style, places and history themes, while the secondary theme will have to deal with some of the chinese most relevant priorities: food security, quality, health and sustainability.

Platform for distribution and on-line sales

About the sale, the platform shall be arranged through on-line and off-line tools.

An e-commerce portal shall be designed for two types of users: end consumers and retailers, for which they have to be defined distinct sales conditions and price lists.

Selling activity to the end consumer must be a retail sale type, possibly delivered over a day or within a few days; As shipping, inspection and customs clearance times are unlikely to fall below 50 days, management of warehouse in China is essential to reach end consumers, ensuring fast times and low incidence of logistical costs on the final price.

Therefore, the costs of using and managing warehouses (with possibility of customs warehousing function) and framework agreements with couriers shall be assessed, as well as the activation of a Customer Service in Chinese language.

Sales to intermediaries can be delivered over longer terms, so as to minimize inventory in China.

With the aim of minimizing the incidence of logistics, in Italy the platform must manage collection, groupage and consolidation of packages.

The platform must also handle a tracking and anti-counterfeiting system, also using the PEOP (Protected Eco-Origin Product) system, in addition to designing additional labels based on QR codes, to allow end consumers to access specific contents in Chinese.