The GM of the Italian wine importer Interprocom: Alessandro Mugnano says that Italian wine will double its market share in China

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07 December 2021

On November 28, on the eve of participation in the Italian Wine Summit 2021 held by the Embassy of Italy in China, the 21st Century Business Herald interviewed the general manager of Divine Wine (Shenzhen) Co., Ltd.,

., one of the largest Italian wineries importers in China Alessandro Mugnano

Click here: The GM of the Italian wine importer Interprocom: Alessandro Mugnano says that Italian wine will double its market share in China

 

On November 28, on the eve of participation in the Italian Wine Summit 2021 held by the Embassy of Italy in China, the 21st Century Business Herald interviewed the general manager of Divine Wine (Shenzhen) Co., Ltd., one of the largest Italian wineries importers in China Alessandro Mugnano.During the summit he will be a guest of the dialogue to participate in the discussion on the issues of food and wine consumption and opportunities under the new normality of the epidemic

The GM of the Italian wine importer Interprocom: Alessandro Mugnano says that Italian wine will double its market share in China. From the beginning of this year, with the five-year collection of our country's anti-dumping taxes on imported wines originating in; Australia, the country's wine imports have plummeted and its leading position in the source of imported wines has also been regained by French wines. Italian wine also jumped from fourth place in terms of sales to third place, occupying about 10% of imports. French wine has long been known in the Chinese market, Chilean wine is in the lead for the high cost-effectiveness ratio due to the zero duty, Italy has a great variety of grapes and is difficult to promote. On January 28, before attending the Italian Wine Summit 2021 held by the Embassy of Italy in China, the 21st Century Business Herald interviewed the GM of Interprocom Co., Ltd., one of the largest importers of Italian wine in China Alessandro Mugnano. During the summit he will be a guest and participate in the discussion on the issues of food and wine consumption and opportunities under the new normal after the Virus. In an interview with 21st Century Business Herald, he stated that Italian wine is in a period of rapid development in the Chinese market and its market share in China will double to 18% -20% over the next three years. Imports of Italian Wine Increase in Volume, Value and Price 21st Century Business Herald: Affected by the epidemic last year, the volume of imports and the value of wine, including Italian wine, have both declined dramatically, down by nearly a year. 30% and 20% on an annual basis. What was the company's sales situation during the epidemic? What specific work has been done?
Alessandro Mugnano: During the Virus, the sector as a whole was difficult. We have made a lot of efforts primarily by diversifying: distributors, coming from different provinces, differentiating the channels and expanding the range of Italian wines that we support with all our means. In the end, our company's sales increased 3% year-on-year compared to last year. It wasn't easy, especially in the first quarter, and then slowly it got better. 21st Century Business Herald: Since the beginning of this year, the volume of imports and the value of Italian wine have increased much more. From January to September, the value of Italian wine imports was $ 128 million, an increase of 57% year-on-year, and the volume of imports was over 25 million liters, an increase of 38%. The average price was $ 5 per liter, an increase of 14%. How did you manage to recover this year? What are the main changes in operations compared to previous years? Alessandro Mugnano: The increase in the status of Italian wine in the Chinese market is mainly due to the increases in the tariff on Australian wine, which significantly affect imports. Since the first quarter, many Australian wine importers have switched to Italian wine. For our company, so far, imports and sales in the first three quarters of this year have increased by 32% on an annual basis. So far we have imported around 138 containers and around 2 million bottles of Italian wine. More important than the increase in volume and sales, the unit price of Italian wines has increased significantly this year compared to previous years. In the past we mainly sold low and medium priced wines. This year it is evident that the sales of medium and high priced wines such as the best known wines have increased significantly compared to previous years. The import price of these 2 million bottles of wine ranges from 1.5 euros / bottle to 400-500 euros / bottle, so it is difficult to calculate the average price. But in previous years, our high-end wine sales represented a very small percentage, but compared to last year, expensive wine sales exceeded 40% year-on-year. The main increase in the price range of our shipping prices to distributors in various regions is 80-180RMB and more than 300RMB per bottle. Sales in these two price ranges have increased a lot
21st Century Business Herald: As far as sparkling wines are concerned, Italian imports are second only to France in the Chinese market. What are the company's sales and trends this year?
Alessandro Mugnano: We are official and exclusive importers of the brand; Ca '; del Bosco produced in the Franciacorta area. Over the past three years, its popularity in China has grown dramatically - very few people knew it before and didn't know how to like it. Over the past two years, imports of Ca ‘ del Bosco increased by 60% on an annual basis. The main reason is that the appreciation and acceptance of end consumers are growing more and more, so much so that the volume of sparkling wine imports will increase significantly. At the same time, we have also opened an online platform, useful for the growth of sparkling wine. Our app has a sales function and we also partner with JD.com and Tmall. Since the end of last year, we have set up a new company dedicated to online sales, so that online and offline sales are separate, without mutual influence and interference.
21st Century Business Herald: What is the trend in sparkling wine from the consumer side? Is consumption more important in tier one cities?
Alessandro Mugnano: For sparkling wines, obviously, the demand for Beijing, Shanghai, Guangzhou and Shenzhen is more evident. However, even the second and third tier cities have begun to take an interest in the purchase and consumption of sparkling wine. Indeed, many do not drink it directly, but mix it with cocktails. There are multiple sales methods of this type, so sparkling wine sales have significantly increased 21st

Century Business Herald: As an importer, do you also have your own winery in Italy? In the Chinese market, do they focus more on sales or promotion of wineries brands?
Alessandro Mugnano: In Italy we don't have wineries or vineyards. But we partnered with a winery in Italy and three years ago we launched the Masseria Doppio Passo series, which is very popular in China. We mainly represent 53 wineries from north to south Italy. Of course, sales are what we pay the most attention to, but we also pay close attention to brand positioning. We have also set up a special department that takes care only of this aspect, also focusing on the official WeChat account and we take care of the Weibo page of many wineries in China. Because many wineries have tried to transfer their content abroad, but in China this is more complex and we help them in this indexing and this expansion also in the social sphere. Will the market share of Italian wine in China exceed that of France?
21st Century Business Herald: Under Anti-Dumping Sanctions; on Australian wine, the market share of Italian wine imports has risen to about 10%, second only to France and Chile. What do you think of the future development trend of Italian wine in the Chinese market? Will the market share increase further?
Alessandro Mugnano: I am very optimistic about the prospects for Italian wines. Since Italy is an important wine producing country, it is at the forefront of exports to Europe. Although Italian wines entered the Chinese market later than French and Spanish wines, the local wine markets in America, Australia and Europe are more mature and the volume of Italian wine exports has been quite high. Italian wines are not inferior to other countries in terms of quality. It will take 5-10 years for the Chinese wine market to mature. However, in accordance with the rapid development of Italian wine in China, its market share in China will double over the next three years, reaching 18% -20%. In the long run, the market share of Italian wine in China could reach the top spot, surpassing France. My trust is not unfounded, as everyone in the industry knows: “Drinking starts in France and ends in Italy”
21st Century Business Herald: bottled wine occupies the vast majority of Italian wine imports. From January to September of this year, imports of Italian bottled wine recorded the fastest growth rates from year to year, placing them in the top three: with France and Chile, respectively with 33% and 56%. What do you think is the reason for the rapid growth?
Alessandro Mugnano: France has worked the longest in the Chinese market, and is also an important wine producer, and is undoubtedly in first place. In Chile, it has this significance also thanks to the elimination of taxes, it has a cost 20% lower than that of wine imported from other countries. Italian wine has developed rapidly in China as consumers have learned more and more over the years, how and what to drink as compared to before. When our company was founded 10 years ago, many people didn't even know that Italy produced wine, they only knew that we were the home of Gucci and Prada. Now many more people know how to taste wine and understand it, and this is the main reason for the growth of Italian wine. A clear proof is that the medium / high-end wine of our company has grown considerably, which means that final consumers have begun to know how to select what to drink based on the characteristics of the wine. When the final consumer begins to demand quality, Italian wine is an excellent choice.
21st Century Business Herald: The indigenous grape varieties of Italian wine are particularly numerous. In terms of promotion, how do you convey the consumers of Italian wine? As the first importer in China, what have you been working on?
Alessandro Mugnano: There are thousands of grape varieties in Italy and it takes a lot of energy to keep them. So selling Italian wines requires more effort than selling wines from other countries, it is necessary to make consumers aware of the different styles of the different grape varieties. But there are so many varieties of Italian wines, and there always will be so it's easier to find the one you like the most that's a big plus. We only have Gansu and we have no distribution channels, and every other province has selected distributors to promote it together. The promotion methods are mainly offline, such as masterclasses and various tasting activities. We brought the traders to try them one by one, fixing them in the mind. We have close links with specialized institutes, educational institutions and the consulate and have worked with film clubs such as Huayi Brothers and Fashion Week.
21st Century Business Herald: Overall, the total consumption of wine in the Chinese market is still much lower than that of Chinese spirits and beer. What do you think is the opportunity for Italian wine in the domestic consumption of the Chinese?
Alessandro Mugnano: This is an excellent question. In Europe, drinking wine at home is routine. During the Virus, when people stayed at home, wine sales went up against the trend. Drinking wine at home has already begun in China, but the road is still long, after all it hasn't become popular yet, it is a little more popular in first-tier cities. Currently, most Chinese families only drink alcohol on public holidays

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