Jiuxian Targets Taste For Wine
One week after brewing giant Anheuser Busch InBev (NYSE: BUD) made headlines with the launch of its Stella Artois brand as a premier beer for the China market (previous post), online wine merchant Jiuxian is making a similar splash with disclosure of its latest venture funding, reflecting the growing spending power of an emerging class of affluent Chinese yuppies. Jiuxian isn’t giving a lot of details, except to say that it recently received the funding from a group led by US heavyweight Sequoia Capital and another venture firm called Oriental Fortune, and that the amount was bigger than its first-round funding of 20 million yuan, or just over $3 million, that it received in April. (English article) Previous reports had indicated Jiuxian was aiming to raise as much as $50 million in its second round of funding, so clearly things are moving along smoothly for the company as it builds a network of warehouses throughout China to cater to the tastes of affluent young urbanites who don’t mind spending a little extra for a bottle of red or white wine to show off their status. Back in September, Chinese media reported that another online wine merchant, WineNice, secured 80 million yuan in first-round funding from 2 Chinese venture companies, again underscoring the high growth potential of this space. (Chinese article) Like Jiuxian, WineNice, which was founded just 3 years ago, said it would use the money to build up a national infrastructure to deliver its wine to China’s large cities where demand is growing fast, adding it expects sales this year to top 150 million yuan, equaling about 1.5 million bottles of imported wine. Unlike the overheated broader e-commerce space, this niche market for online premium products like wine looks a little safer, as there’s less competition so far and the market for affordable luxury products like wine and premium beer is likely to grow rapidly in the next few years. That said, I would watch for Jiuxian, WineNice and others in this space to quickly turn profitable, and for the first IPOs from this sector to start popping up by the end of 2014.
Bottom line: The latest funding for online wine merchant Jiuxian underscores the big growth potential for this sector, spurring the rise of a new group of companies that could make their first IPOs as soon as 2014.
Related postings 相关文章:
◙ InBev Taps China’s Thirst for Luxury Brands 中国人重面子百威英博趁机引入高端啤酒品牌
◙ Diageo’s China Baijiu Bid: Aiming for the Middle 帝亚吉欧瞄准中国中档白酒市场
◙ Coke’s China Formula: A Pulpy and a Smile 可口可乐入乡随俗显成效
