Grape & Grain

Chinese millennials should be leading the charge for wine e-commerce, but vendors fall short with marketing visuals

A wine expert finds that when buying online, Chinese consumers are faced with a deluge of information from price and origin, to more obscure facts like the ‘sobering up time’

PUBLISHED : Wednesday, 16 August, 2017, 2:03pm
UPDATED : Thursday, 17 August, 2017, 6:23pm

Its one month until the Master of Wine results are released. Fortunately, I’ve concluded that even if my research paper doesn’t ultimately pass muster, the research has been rather interesting.

My topic was Wine E-commerce among Chinese Millennials. As the wine market with the world’s greatest e-commerce penetration, China should be the torch-bearer for online wine entrepreneurs everywhere.

Chinese millennials’ online wine buying habits a confusing subject

And in many ways it is. Chinese e-commerce’s advantage is that it’s both consolidated – largely occurring on a few generalist platforms such as Tmall and – and diverse – individual sellers can set up branded outlets on these platforms (much like Amazon’s marketplace, but without the interstate shipping issues). As a result, customers can shop for wine through familiar channels with familiar payment systems like Alipay and WeChat Pay, but can also – at least in theory – find any wine their hearts desire.

For wine vendors, e-commerce is a less of a success story. Most brands simply lack the funds required to compete. Even though the platform and logistics costs of e-commerce only amount to about 15 per cent of revenue compared to 30 per cent and more for brick and mortar, the aggressive marketing e-commerce demands somewhat levels the playing field. However, for brands with the time, energy and funds to invest – and, critically, a targeted marketing strategy – e-commerce is the clear winner.

Enter my study, which aimed to identify the most influential nuggets of information among the deluge of text and images that is on the typical online wine product page. Specifically, which bits appeal to which segments of the millennial Chinese population. Specifically, I was looking at people aged 20 to 40, with monthly salaries of more than 5,000 yuan (HK$5,850). They also had to have bought wine within the last six months.

In China, one finds not only brand name, grape variety, origin and price, but less familiar titbits like “sobering up time” and image galleries packed with close-ups of packaging features I never even knew to look for, such as “breathing holes” in the capsule.

Community ratings get top billing, though, unexpectedly, not professional ratings such as Parker or WS scores. My research confirmed that community ratings are critical. To have a hope of appealing to the platforms’ search algorithms, a wine must score at least 3.5/5 – I found virtually no wine scoring lower.

How idea for a Hong Kong wine bar took time to mature, just like a good vintage

Other quantitative metrics such as recent sales figures are important but slightly less influential, perhaps because customers now realise that many less scrupulous wine vendors have been known to buy back large volumes of their own wine to boost their numbers.

More unexpected is how customers responded to images. All in all, it seems vendors haven’t got it quite right yet. The most common image type I found online was the aforementioned close-ups of corks, screw caps, labels, etc, and yet in my study, all of these left respondents feeling cold. Food pairing images, something both Tmall and encourage, weren’t particularly compelling, even to self-identified foodies.

Another oft-used image category was stock photos of the grape varieties included in the wine blend. Nobody I know, wine nerd or novice, has confessed to being enticed into a purchase by an anonymous cabernet bunch, and my findings concurred.

Why Chinese millennials buying wine online is a phenomenon ripe for research

The most persuasive image of all those I presented? A promotional shot of Li Bing Bing sultrily swirling a glass of wine, and yet I found few celebrity wine endorsements on real-life platforms. A missed opportunity, clearly. Fortunately for anyone befuddled as to how Ms Li could possibly be afforded, I will note that the most favoured price point was an impressively high 195 yuan , leaving some margin for marketing.

The distinctions within the group were more interesting still than the aggregate data (don’t get me started on the varied responses to language use), and even the 10,000 words the Institute of Masters of Wine gives us to present our findings fell, I felt, woefully short. Fortunately for my inner data nerd, I’ve now got plenty of it to pore over until September rolls around.