Mon 14 Feb 2011
Will $100 Wine Glasses Sell in China?
It was just a matter of time: With fine wine selling fast in Asia, glassware maker Riedel is planning to expand aggressively in China.
The Austrian company, which has eight franchised stores in the mainland, expects to nearly double that count to 15 by the end of 2011. After that, it plans to expand at a rate of 30 stores annually. If all goes according to plan, by 2015, more than 120 Riedel franchises will operate in China’s 25 largest cities.
“There’s no competition [in China],” says Riedel Glas Austria chief executive Georg Riedel, a 10th-generation member of the 250-year-old family-owned company. “It sounds strange, but the truth is, there’s still very little interest from competitors.”
With Asia’s wine consumption forecast to rise by 20% over the next three years, according to the International Wine and Spirit Research (IWSR) commissioned by Vinexpo, and China leading the growth, Mr. Riedel believes the market for wine accessories is ripe for the picking, and he plans to target professionals in management positions, between 35 to 50 years old.
“You have to be patient,” says Mr. Riedel, who notes that two-thirds of current Riedel sales in China comes from “on-premise” customers, the industry term for hotels and restaurants, and one-third comes from “off-premise” customers—those who purchase for home use. As part of its marketing strategy, the company will conduct a series of educational tastings to showcase how “a proper glass can function like a loudspeaker for flavors in wines,” and is worth the extra investment.
The majority of Riedel’s sales in China are for its red wine glasses, but the company hopes to increase education and teach customers “one size does not fit all types of wine.”
In the U.S., Riedel glasses start at $10 and go up to $100 for a handblown all-crystal glass. But Chinese buyers will have to shell out 15% to 20% more because of higher distribution costs in China.
“There is an added layer of middlemen in China,” explains Mr. Riedel. “We are not in direct contact with Chinese department stores…but will have to go through operators, which is an additional cost.”
By Amy Ma
14/02/2011
