Issue link: http://winesandvines.uberflip.com/i/437909
January 2015 Wines&Vines 113 SaleS & marketing 1 Low consumer understanding of wine. ASC focused on education for wine service professionals and consumers, being the first company to bring Wine and Spirits Education Trust (WSET) training to China. As a result, ASC became the most trusted source of pre- mium imported wine. 2 No effective distribution system in China. St. Pierre said, "We had to build our own. This created our sales/distribution chan- nel, and we became a more sustainable business." 3 Understanding Chinese regulations and regulatory agencies. In the early years, ASC did not have relationships with the gov- ernment, but it later began educating govern- ment officials about wine with the same approach it used to educate consumers. "ASC is now viewed by the central government as the largest and most professional importer in China," St. Pierre said. 4 Increasing fake and counterfeit wines creating uncertainty in the wine market. "This became an advantage for us, because we were more trusted than any other wine com- pany," St. Pierre said. At the end of 2013, there were a total of 4,500 registered wine importers in China and total sales of $1.3 billion. ASC was the No. 1 wine importer based on volume and value in 2013. Trends, challenges and opportunities St. Pierre said the recent decline in wine sales growth is related to changes in government policy with an anti-corruption and austerity campaign instituted by new Chinese president Xi Jinping, who became leader in late 2012. To combat corruption, government officials, the military and government-owned enter- prises now are banned from hosting the kinds of lavish dinners and excessive gift giving con- sidered acceptable when the government was promoting economic growth. China is undergo- ing a massive economic restructuring, and this has affected many business sectors in China. St. Pierre summarized: "On the whole, peo- ple are more interested in wine. They think it is more healthy than other alcoholic beverages, and this trend will continue. But government spending and its effect on wine sales has gone away." He listed several positive trends to be aware of in the current wine market in China: • Wine buyers are now the wine drinkers. It's a more real market, and that's a good trend. • A much broader base of consumers are being exposed to imported wines, and the wines represent a broader range of source countries, styles and varietals. There is less dominance by Bordeaux. • Consumer knowledge levels are increasing. • Opportunistic and less successful wine Four wine-selling Challenges in China • Low consumer understanding of wine. • No effective distribution system in China. • Understanding Chinese regulations and regulatory agencies. • Increasing fake and counterfeit wines.