Wine in China : When did you come into contact with the consumption market of America and China?
François Non: My family has always been devoted to the promotion of Cru Bourgeois. My uncle Jean Nony was one of the founders of Association de Promotion des Crus Bourgeois du Medoc in 1962. I started to manage family business in 1997. In 2004, I started to explore the American wine market. In the first few years, our market share grew rapidly, but the American market collapsed due to the economic crisis after 2006, while the Chinese market started to rise since that time. Therefore, from 2008, we began to explore the Chinese market seriously.
Wine in China : How do you view the recession of the American market and the rise of the Chinese market?
François Non: Actually the American market is still growing by year though in a much slower pace, but it remains our biggest export market. The growth speed of the Chinese market is stunning us. While it is only the third year for the Association de Promotion des Crus Bourgeois to come to China for promotion, the sales value of Crus Bourgeois wines has increased by 330%. By far, 167 wines among the newly released 260 wines of Crus Bourgeois 2010 has entered the Chinese market. I am pretty confident that the scale of the Chinese market will go far ahead of that of America.
Wine in China : What’s the major similarity and difference between the two markets?
François Non: The biggest similarity between the two markets lies in the fact that both markets are big in scale and consist of a lot of sub-markets based on regions. The potential consumer base is huge , therefore, both markets has enormous long-term potential.
But the consumption habits and the constitution are different. America had two major consumption groups: the postwar Baby Boomers with a big population and the young under the age of 35. The former drink on a daily basis, who tend to accept cheaper wines, while the latter drink wine with a low frequency with more willing to try high-quality and expensive wines.
In general, the consumers in China tend to be the second group. Besides, China has a bigger population advantage. The per capita wine consumption in China is just 1/4 of that in America, while the sales volume has reached half of that in America. Viewed from a long term, the potential of the Chinese market is undoubtedly much stronger than that of America.
We have also noticed that the transition from drinking beer to wine among Chinese consumers is much faster than among American consumers. In another word, the Chinese consumers are much quicker in accepting new products.
Wine in China : What are the biggest obstacles that you have encountered in these two countries?
François Non: The three tire system has always been a strong resistance for us to enter American market. Also the fierce competition between traditional distributors and e-retailers is also a big problem. Besides, the loyalty of the American consumers towards a certain product is extremely low, as a result, we have to constantly look for new clients to make up for the loss of ole clients. The golden era of wine in the U.S. was between 1996 to 2006. As the Subprime mortgage crisis broke out and two main commercial powers stepped down the stage, there was a surplus of wine store on the market, which has made our work extremely difficult. Now wine companies all over the globe are starting to focus on the emerging Asian market.
In China, the most tricky problem is that there are five distributing systems coexisting, the traditional distributor, direct distribution, e-commerce, gift giving and selling through the social network. Our main concern is which distribution system will stand out.