Italian varietals, blends eye strong growth in China

Interprocom Cantine Divine Co Ltd, one of the largest Italian wine importers in China, said it sees ample business opportunities this year for Italian wines to further increase market share in China.

Founded in 2012 by four Italians, the Shenzhen, Guangdong province-based company specializes in selling Italian wines in China sourced from across Italy. In recent years, the company has imported between 100 and 140 containers annually, with each container having 15,750 bottles of wine. It now sells wines in 29 provinces nationwide.

In 2018 and 2019, it witnessed strong year-on-year sales growth of 35 percent and 65 percent, respectively, in China. Last year, despite a strong impact from the COVID-19 pandemic, the company managed to overcome the crisis and boosted sales by 2 percent on a yearly basis, Interprocom said.

Last year, China imported about 430 million liters of wine in total, down from around 610 million liters recorded in the previous year. Meanwhile, the value of such imports reached $2.83 billion, down 19.9 percent year-on-year, according to data from the General Administration of Customs.

"China is one of the countries that gives companies a chance to grow and expand with no limits. It is full of opportunities. This is a perfect country to show who you are if you are ambitious in doing business," said Alessandro Mugnano, general manager of Interprocom.

"The knowledge of wine consumption in China has increased a lot in recent years. I'm very confident that China will become one of the countries with the biggest potential for the growth of Italian wine," Mugnano said.

"A lot of Chinese consumers are approaching fine wines. In the next few years, I believe the biggest increase will come from fine wines. Besides, sales through e-commerce channels are expected to increase. We would like to cooperate with more KOLs (key opinion leaders) to promote our products, and we have to be very careful in choosing suitable ones," he said.

Interprocom's main customers include corporate customers, wine shops, hotels, restaurants, bars, clubs and KTVs. These offline sales channels make up about 80 percent of its total sales.

About half a year ago, Interprocom established a new company named Alawino, which is specialized in online business. Interprocom said it has established cooperation with major e-commerce platforms such as JD, Alibaba's Tmall, Pinduoduo and short video platform Douyin. It also sells through the WeChat mini program and Interprocom's own official website.

The company has diversified its wine portfolio and sells different types of wines via both online and offline channels. To better satisfy demand from young consumers, who prefer online shopping, wines sold online carry relatively cheaper price tags.

Italy, the biggest winemaker globally, produced 19 percent of the world's wine last year, according to the International Organization of Vine and Wine.

In the past two years, Interprocom enriched its portfolio of wine imports, now numbering 120 kinds of wine from 10 chateaus in Italy. So far, the firm has imported more than 560 kinds of Italian wines into China.

In July last year, the Chinese government tripled Hainan province's offshore duty-free allowances to 100,000 yuan per person a year. Hainan, which aims to become a global free trade port, is expected to become a key growth driver for travelers seeking high-end international brands, and a number of suppliers have poured investment into the sector.

In the next two years, Interprocom said it plans to establish an office in Hainan to do cross-border online business, to further tap the local duty-free market.

"Italian wines boast various styles and tastes. In some mature markets such as the United Kingdom and Germany, Italian wines account for the largest market share among their imported wines," said Rebecca Wang, managing editor of WineITA, a website that focuses on Italian wines.

"Italian wine entered China at a relatively late stage and the promotion and education started late. With an increasing number of sophisticated wine drinkers in China, Italian wine will see considerable room for growth in China," Wang said.