Dawine Ltd (ASX:DW8) has achieved the first sale of 17,000 bottles for its newly initiated business-to-business (B2B) arm, signalling an effort to increase its exposure to China's $1.1 billion per annum appetite for Australian wine.
Dawine chairman Piers Lewis said: “Up until now, we’ve been trying to build our own consumer database through a variety of online sales channels.
“While we’ve made some progress, customer acquisition costs are extremely high unless you are selling very well known brands such as Penfolds or Jacobs Creek.
“Rather than compete directly for customers, we’ve recognised that it is more efficient to partner with existing Chinese retailers and sales channels, providing them a platform to access Australian wine brands.”
“Our aim is to provide a one-stop-shop for Australian wine producers of all scales to access the lucrative but difficult to navigate Chinese market.
“We’ll manage the entire process for them, from when the wine leaves the cellar door to when it’s delivered to a home in China.”
The B2B focus also aligns with the company’s proposed acquisition of Wine Depot, an integrated B2B trading and logistics platform that allows retailers to drop ship orders directly to their customers from the inventory held in a strategically placed location.
Lewis added: "We have had a presence in Shanghai for almost three years now. It’s a logical starting point to establish a depot to service the China market.
“Similar to Wine Depot’s plans for Australia, we would look to expand the network into other major Chinese cities as the demand grows.
“With the likes of Alibaba investing over $400 million into wine importer and retailer 1919.com, it shows just how much potential there is if you get the operating model right.”
Along with the change in distribution strategy, the Dawine board has decided to rebrand the company's name to Digital Wine Ventures Limited.