This week in the news, Italian wine makers see opportunity in China, Apple’s new watch receives a tepid response from Chinese consumers, Bacardi will introduce a tea-infused liquor in China, Jimmy Choo has big plans for China, and Jessica Alba’s baby brand will enter China later this year.
Italy is the fifth largest exporter of wine to China behind France, Australia, Chile, and Spain, and has a 7 percent market share in the Chinese wine market, but Italian wine makers do have reasons for optimism. In many ways, China’s austerity push has actually benefited China’s wine market. Before, imported wine would rarely make it to the general public before being snatched up for government banquets and events. The general public had to make due with poor imitations of European wines from Chinese wine makers. Now, the Chinese public has discovered a new world of variety that wasn’t present in China’s wine market before, and even mid-level wines have risen dramatically in quality as a result.
China will be one of the earliest markets for the smartwatch, which will be available for purchase there on April 24. Despite the buzz surrounding the Apple Watch on Chinese social media, consumer attitudes toward the product seem lukewarm. An online poll from CTR, to which 1,883 Chinese consumers responded, showed that 55 percent said they won’t buy the Apple Watch, while four percent said they would. The remaining 42 percent said they weren’t sure whether they would purchase the product or not. Forty-one percent of respondents said they wouldn’t buy an Apple Watch because they don’t need one. Another 35 percent said that the watch was too expensive.
Spirits maker Bacardi hopes to differentiate itself in China’s increasingly crowded liquor market with a new drink distilled from tea. The company has begun producing the light-green colored Tang in small batches with the first 2,000 bottles being offered at high-end restaurants in China starting in May. A 500ml bottle will be priced around 1600 yuan (US$260). If Tang catches on in China, the company plans to launch a global roll-out within three to five years. The strategy in releasing Tang is to capture the dinner table, where Chinese consume most of their alcohol. Baijiu, the popular clear spirit, is already entrenched in traditional Chinese restaurants, so Bacardi is targeting higher-end Chinese-Western fusion restaurants.
Fresh off its initial public offering on the London Stock Exchange last year, which valued the company at £545.6 million (US$877 million), Jimmy Choo has big plans for China. Asia is the company’s strongest growth region, and it has particularly been on a roll in China where Chinese fans of South Korean drama “My Love from the Star” have snapped up the Jimmy Choo shoes featured on the show. In January of this year, the company announced that its Asian expansion was going according to plan and that it had helped net revenues rise 12 percent to £299.1 million. Now, the company plans to open up to 15 stores per year in Asia for the foreseeable future. Almost half of the company’s nine new Asian stores opened last year were in China.
Jessica Alba is bringing her brand of nontoxic consumer products to China. The brand, Honest, has taken off in the past year, and recently launched a line of nontoxic baby feeding products. The company expects China to become a significant market, and said that it may launch products in the country as early as the end of 2015. Honest recently announced that it brought in $150 million in revenue in 2014 — three times more than its 2013 earnings. Alba emphasized the company’s one-on-one interaction with consumers, and says the company is avoiding doing business with Amazon to maintain this relationship. Eliminating the middle man means higher margins, which allows Honest to charge lower prices for their products.
image credit: jimmy choo