Great Wall looks to on-trade and lower-tier cities for growth

China’s leading domestic winery, GreatWall, is switching its distribution strategy to the on-trade and lower-tier cities as a key driver for future growth, the company announced the move at its wine forum hosted in Shenzhen this month to commemorate the 40th anniversary of China’s landmark ‘reform and opening-up’ policy.

Castle Li, general manager of COFCO Wine & Wine and GreatWall Winery, speaking at the wine forum in Shenzhen on 15 December.

“GreatWall started with restaurants and on-premise sales, and in the last two years, there’s a clear recovery in the on-trade sector. If there’s no GreatWall at a restaurant, we are losing massive opportunities,” said Castle Li, general manager of COFCO Wine & Wine – the wine and spirits importing arm of the China’s China’s biggest foodstuff conglomerate COFCO – and its flagship winery GreatWall, when speaking to a room of more than 1,000 distributors.

Founded in 1978, the same year when China’s former leader Deng Xiaoping launched the Reform and Opening-up policy in China’s southern Shenzhen, bordering Hong Kong, the state-owned winery’s history is said to “mirror” China’s 40-year economic reform, according to Ge Zhirong, Counselor of State Council and former vice minister of the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), who was a headline speaker at the forum.

In 1979, the winery produced the country’s first dry white wine, and then the first dry red wine in 1983. The winery is ranked as one of the world’s top 10 brands in the world in 2017, and its market share in China along with Changyu accounts for at least 40%.

GreatWall’s distributors at the Shenzhen event

In detailing the company’s development strategy for 2019, Li pinpointed lower-tier cities across as China as the “main battle ground” for the winery, as disposable income increases and the middle class expands in these cities.

“In terms of distribution, we need to battle it out in second -, third-, and forth-tier cities and return to on-premise and on-trade channels, which are key for GreatWall’s future,” he said.

“GreatWall wines have to resolutely tap into second-, third-, and forth-tier cities. Whether it’s expanding consumer base, or overall consumption potential or controlling costs, they are the most valuable main battle ground for wine,” he stressed.

In China, almost half of the country’s 1.3 billion population still reside in the countryside.

Beyond on-trade sales, Li urged the winery’s distributors to ramp up promotional and sales effort to penetrate wider market, in order to make GreatWall the go-to wine for family gatherings, friends reunions, business dinners and state dinners.

Millennials are another consumer base that Li noted as a key group for the winery, “If we can’t win over post 90s consumers (meaning consumers born in 1990s), we will lose our future,” he warned.