Edward Liu is Founder and President of SinoDrink, leading Italian Wine Importer and Distributor and joint venture with Geneagricola, Italy’s largest agricultural company, belonging to Generali Group.
We asked Edward his opinion and expectations for Italian wine performances in China.
Ciao Edward, thank you for giving us this interview, you must be very busy.
Our first question is about your portfolio: many importers work with wines from different countries. Why did you choose to work with Italians wine only?
I stepped into Italy wine import and distribution during my first job in Beijing since 1998, I started to know Italy from there, then I fell into love to Italy culture and built up my great passions on Italian wines. I had marvelous working experiences with Campari, Lavazza, and Italian wines for over 10 years, this is why I am so familiar with Italy and Italian wines.
When choosing a new wine for your portfolio, what are the things that you consider important?
The people, good people are the key for me, the people who are willing to listen and learn from China. I really don’t care about big brands or premium estates, I am selecting the partners who are able to develop with our team a long term collaboration.
You are one of the first Italian wine importers in China (or maybe the first at all!), can you tell us how the industry changed in these years?
No, SinoDrink is not the first Italian wine importer at all, SinoDrink was established in 2008, so many other companies as ASC, Torres, Summergate etc started working with Italian wines in 1990s. Maybe, SinoDrink is one of very first companies who are specializing on Italian wines.
Covid 19 is still hitting in the world, our country made huge efforts to go back to normal. Most of industries went back to work two months ago, but the wine trade is very slow, like many other business. Our priority is working much harder to survive, our consumers are also much careful to control the costs and are lowering the budget on wines.
Coronavirus is changing the rules of the market game, do you think this is the end of wine fairs and B2B? if you could make a forecast, how do you see the wine industry evolution in China?
I don’t think the wine fairs and B2B are getting to and end, even if they are heavily affected by the virus crisis I believe they will get back. Surely, more and more people are switching to online selling, but so far it is suitable only for the well-known wines making discounts online, or the super cheap/fake wines, with no quality standards at all. Wine is a very unique product, people likes to touch and taste it, and that will never change. It is a very emotional and social commodity. KOL video sales and on-line are getting hot, but you have to invest big money to have a real and stable new channel.
The wine industry will surely keep growing and will be much improved after the reset from this hard time.
We know China is recovering slowly from coronavirus crisis, but the HoReCa channel undergo a very hard hit. We also know that many restaurants closed, or lower their performances by 50%, how is this affecting the distribution? Do you think this is the right time to leave the traditional distribution and address the final consumer?
HoReCa is experiencing very hard time, as the distribution channel, but it is slowly getting back normal, we just need time. I can tell some of them are picking up very fast, it is a very good sign. To address the final consumer is every player’s dream, but the diversity of our market makes it quite hard and to have a good potential you need to invest a lot on-line, like with KOL, video etc.
Italian wines often have complicated names, do you think the Chinese translations of these names are important? And are the Italian producers focusing enough on this?
I think most of Italian producers never consider how important a good Chinese name is, it is a very interesting question. 99% of wineries are only pushing the importer or distributor to sell more wine instead of spending time to name the wine, only few big groups or producers rise this point, because they really have a view on this market. It also is a challenging issue because of the ownership of Chinese name.
In your opinion, is it good that the winery supports the importer with a social media presence in China? For example, with a WeChat account or KOL activities?
It is definitely the right time and essential to have a social media presence, we’ve supported our supplier partners to build up WeChat account. KOL activities are in our plan as well and we will make a strong promotion with them in follow months.
How important is the wine brand when it comes to sell a wine? Is it a good idea for the wineries to invest in branding?
The wine brand is a key point to sell wines in China, but it takes time and money to reach brand awareness. In order to make the brand popular, producers need to interact more and closer with their partners in China.
We know some Italian wine regions are more popular in China (Veneto, Piemonte, Sicily, Tuscany). Is there space for the other regions in the consumers interest?
There is surely room for the other regions apart from Veneto, Piemonte, Tuscany and Sicily. For instance, SinoDrink started up to push Puglia wines 5 years ago, and now Primitivo is more and more popular. So we need more professional importers working very close and hard with producer, discover a suitable variety under a good sales and marketing budget plan, it is always working. Simply, China is a wide and diverse market, there is always an opportunity and room for everyone who is really able and willing to work in this country.
We know that some countries like Australia and Chile have bilateral agreement and their wine import have a lower taxation and burocracy. This obviously affects the wine price and its popularity among consumers. But we also know that France and Italy have the same tax system, how can you explain the French wines popularity compared to the Italian one?
It is a very good example for Italian producers, media or government, to make an effort and reach the result of Australia and Chile wines in China, but we need to remember who came to China 20 years earlier than Italian wines, it takes time and outstanding efforts. French wines has come to China over 40 years ago and they are still very active and working hard to keep a good brand position. Well, the favorable import tax by the governments is a big help but not the main reason, the loyalty of producer and the development of long term strategies, working with local partner is the first step to reach success.