Start up wine company

Business Plan of SHANGPIN Imported Wine Company

Table of Contents

1. Business sector and opportunity        1

2. The business model of our start-up        3

2.1 Marketing research        3

2.1.1 The status of imported wine in Chinese market        3

2.1.2 Competition situation of Chinese wine        5

2.2 Company’s profile        5

2.3 Unique Sales Proposition        8

2.3.1 Market positioning        8

2.3.2 Product strategy        9

2.3.3 Price strategy        9

2.3.4 Brand promotion strategy        10

2.3.5 Network marketing strategy        11

2.4 CAB        11

2.4.1 Characteristics of your product        11

2.4.2 Advantages of your product        12

2.4.3 Benefits for clients        13

3. Previous experience in this business sector        15

3.1 Risk in wine trade        15

3.2 Solutions        16

4. Personal reflections        19

Appendices        20

1. Business sector and opportunity

In recent years, the growth trend of wine consumption in China is accelerating. “At present, the consumption scale of the Chinese market has reached 38 billion RMB, making China become the eighth largest wine consumption market in the world.”^[1]

The author is studying in France, I have ever worked as an intern in a French wine import and export company for half a year in 2017. I am very interested in French wine, at the same time, the rapid development of Chinese wine market may create lots of opportunities, so I plan to set up SHANGPIN Company focusing on import and export business of French wine. In the future, SHANGPIN Company will build a sales website to expand its import and export scope. In order to learn about market information, the author browsed through a large amount of publications of the competitors, studied marketing strategy of the company, inquired business directories of wine companies and Chinese business journals, conducted a large number of questionnaire surveys through the Internet as well as consulted relevant business consultants.

After a market survey, I found that there are a variety of imported wine in China, which mainly comes from France, Spain, Italy, America, Canada, New Zealand, etc. French wine is the world’s oldest wine and is very popular in China due to its strict quality and mellow taste. However, the difficulties for Chinese consumers in directly buying imported wine causes a huge gap between the price in France and that in China. According to the estimation, the profit margin of low-end wine is roughly between 150% and 200%, mid-to-high-end between 100% and 150% and high-end wine is about 50%. However, affected by factors such as consumer psychology and market trends, there is still a rising space of the profit margin. China is a country having a large population. In such a huge market, the author believes that SHANGPIN Company will certainly have an infinite and broad future.

2. The business model of our start-up

2.1 Marketing research

2.1.1 The status of imported wine in Chinese market

The rapid development of China’s economy means there has been an increases on national income per capita, and people’s consumption level has been significantly improved under the influence of various domestic demand promotion policies of the government. People pursue material and spiritual enjoyment rather than merely solving the problem of food and clothing. As a result, people’s demand for a healthy and quality life has increased, enhancing Chinese people’s demand for wine and promoting the rapid development of wine market.

[pic 1]

Data source: Search and reduction from China customs database^[2]

Figure 1  The total data of imported wine from 2005 to 2015

During the years from 2005 to 2015, China’s total wine imports has increased by 949%, and the compound annual growth rate during the period reached 30% though there was a slower growth that occurred in 2009 and 2012, and a negative growth in 2013.

[pic 2]

Data source: Search and reduction from ASKCI Consulting Co., Ltd. February 8, 2017^[3]

Figure 2  The country-of-origin of top 10 bottled wine in 2016

In 2016, the total imports of China’s bottled wine was about 481 million liters, up by 21.8% year-on-year; the total amount was about 2,194 million USD, up by 17.12% year-on-year. France stayed at the top of the source of bottled wine in 2016 with a total volume of about 191 million liters, up by 14.4% year-on-year and accounting for 39.7% of total imports of bottled wine; with a total amount of about 965 million USD, up by 11.82% year-on-year and accounting for 44% of total amount of imported bottled wine. However, the proportion of emerging wine manufacturing countries also increases year by year, forming a competitive situation with France, and Australia, Chile, America, New Zealand are also grabbing market share in China.

2.1.2 Competition situation of Chinese wine

The competition in China’s domestic wine market is fierce. Firstly, “Changyu, Great Wall Red Wine and Dynasty Winery has half of the Chinese wine market”^[4], and these enterprises will become major competitors of SHANGPIN Company in the industry. Secondly, small and medium-sized wine companies keep growing and have become an important force in the Chinese wine market. These rapidly emerging small and medium-sized wine enterprises pose great competitive pressure to SHANGPIN Company.

...