Napa Valley's Vin65, Gliding Eagle seek to ease China wine direct-to-consumer shipments
For the tens of thousands of annual Chinese visitors to North Coast wine country limited to taking home only two bottles, they have a new way to have more bottles of their favorite wines shipped to their homes, thanks to a new partnership between Napa-linked companies.
Vin65, the e-commerce platform subsidiary of Napa-based WineDirect, on Dec. 10 said it teamed up with Gliding Eagle (gliding-eagle.com/us/wine), which opened a Napa export center in July, to make the long, red-tape-tangled process of direct-to-consumer shipments to China easy for tasting room visitors and vintners.
Vin65’s point-of-sale software allows tasting room staff to select China as the destination, the visitor enters the address in Mandarin script then Gliding Eagle does the rest. Wine is delivered to Gliding Eagle’s 1,400-square-foot Soscol Avenue warehouse, where orders are packed into drop-tested shipping boxes then consolidated into full pallets.
“Doing individual packages, the process seemed like a massive headache, so we’re declaring a pallet at time, and China allows us to do that,” said Andrew Kamphuis, president of Wine Direct. “There’s one importation fee for the whole pallet of wine.”
Because of counterfeiting concerns, Gliding Eagle applies to each bottle a label of authenticity with a 12-digit tracking number and QR code for a brand page on WeChat, a China-fostered social network replacement for Facebook, according to Adam Ivor, a former North Coast winemaker but now Gliding Eagle co-founder and director of operations.
FedEx ships pallets to Gliding Eagle’s custom clearing brokers in Hong Kong, recommended by FedEx. There, the pallets are broken down into the individual shippers and picked up for consumer delivery via couriers.
“Getting wine to China is very complicated — and takes a very long time,” said Gliding Eagle founder and CEO Jack Duan. “Now, wineries can get their wine to Chinese consumers within days.”
Gliding Eagle and its brokers handles all the customs paperwork, clears pallets through customs then arranges for delivery. The process can take just four days to Hong Kong or 12 days to elsewhere in China.
If a winery is willing to offer a 20 percent discount, Gliding Eagle can get a luxury wine into a consumer’s hands in China for as little as 30 percent over the U.S. retail price, Ivor said. The goal is for a winery to get $70–$80 for a $100 bottle and the consumer pay $105, rather than the vintner getting half-retail and consumer paying $200–$300 when going through an importer and distributor.
Duan and Ivor formed the company in 2010 in San Ramon, but backing from major food industry executives earlier this early allowed them to take the venture to the next level. The company moved to Napa and launched the China-direct service. The Vin65 partnership allowed the company to replicate its China e-commerce presence in the States, Ivor said.
Vintner that have been using the Gliding Eagle the most include Silver Oak Cellars, Treasury Wine Estates' Beringer Vineyards, Domaine Carneros, Robert Mondavi Winery, Spottswoode Winery and Hall Wines.
The Gliding Eagle–FedEx conduit to China developed by doing the reverse of FedEx’s system for bundling Apple shipments of iPhones from China factories to the U.S., Ivor said.
Vancouver, British Columbia-based Vin65 works with hundreds of wine company customers. It tested China direct-to-consumer system with the help of e-commerce customers such as Silver Oak Cellars, which has operations in Napa Valley and Sonoma County’s Alexander Valley. Oakville-based luxury vintner Opus One has been using Vin65 for China DTC shipments but handled the logistics itself.
“That’s not a reality for a lot of small- to mid-sized wineries,” Kamphuis said.
Though China is the international wine market many are looking to enter, there are other opportunities for direct-to-consumer export, he said.
“I believe e-commerce is going to be more international in the next five years,” Kamphuis said, pointing to Yahoo’s China-based e-tailer Alibaba, which now is expanding to Japan and the U.S., and to Amazon’s Asian interest.
Napa Valley is attracting a lot of Chinese tourists, 60,928 last year, according to Visit Napa Valley’s international tourism report. That was 13.6 percent of 448,000 foreign visitors for the year, out of 3.3 million total for the valley.
Visitors to California from China grew by 21.6 percent last year to 996,000, the top source for international guests to the state. That’s expected to grow to 2 million in the state by 2018, according to Visit California.
Chinese visitor spending in the Sunshine State leaped by one-third last year to $2.24 billion, three times that of tourists from the United Kingdom and Japan, the No. 2 and No. 3 export markets for California.
Gliding Eagle has a staff of five in Napa plus bilingual customer-service representatives in Beijing to handle user questions from the smartphone app. The company currently is looking for twice to three times as much operating space in Napa.
Vin65 plans to host a webinar (vin65.com) Dec. 18 describing the China DTC system.