Yuan Jiang, Chinese Wine Mogul: 10,000 Bottles a Day & Counting
on 30/06/11 at 9:44 amWine
Yuan Jiang started his first business, a direct marketing services provider called Roadway, in 2001. Seven years later, Roadway ranked first in its sector in China, with profits twice that of its nearest rival. At that moment, Yuan agreed to a merger with the American firm D&B (Dun & Bradstreet) for more than $40 million.
It was 2008, when the financial crisis occurred. There wasnt much hope for my company to be listed, Yuan says. (Read about the Bordeaux bubble.)
Yuan Jiang thought it best to use his experience with Roadway to go into B2C (business-to-consumer) commerce. But he still needed to pick a product. After flirting with several ideas, Yuan decided on wine mostly because of its high profit margin. In China, a bottle of French or Italian wine that costs 3 euros from a European winery will be sold for about 11 euros retail. And in a restaurant or bar it can go for three to four times higher.
I had some competitors in 2008. But the crucial point is that wine was small change compared to other consumer items. A lot of middle class families had already started to drink wine, but not yet in way where it had become a fixed part of their expenses.
This post is in partnership with Worldcrunch, a new global-news site that translates stories of note in foreign languages into English. The article below was originally published in Economic Observer.