(Yicai Global) March 5 -- The novel coronavirus epidemic is changing traditional liquor retailing in China, as both offline and online sales drop. Established e-commerce supply channels are offering extra services and buying up competitors to increase their foothold in the market.
The epidemic has prompted many new forms of internet-based marketing and retailing in the alcohol sector, said Tian Zhuopeng, founder of Beijing Zhuopeng Management Consulting. This may promote the transformation and development of China's traditional liquor distribution business.
"Sales in February fell by between 80 and 90 percent," said Yang Lingjiang, chairman of 1919 Wine and Spirits Platform Technology, one of China's largest online alcohol distributors. Since the Covid-19 outbreak, sales have slumped to CNY2 million (USD288,380) a day from CNY40 million (USD5.8 million) over the Chinese New Year holiday period, he added.
Online-to-offline sales make up 90 percent of 1919's business. To drum up customers, 1919 is now also providing warehousing and home-delivery services for some fast-moving consumer goods. The Chengdu-based firm has also recently acquired business-to-business wine platform Danlu, it said in February.
Online liquor retailer Beijing Yijiupi E-Commerce has expanded to offer warehousing and distribution sharing services as well as offline retail chains. Last month the Wuhu, Anhui province-based firm bought B2B consumer goods distributing platform Zskuaixiao.
In the next five years, several giant online retailers such as Suning Holdings Group and Gome Electrical Appliances Holding might also be selling wine, according to Hao Hongfeng, chairman of Beijing Jiuxian E-commerce, which cooperates with thousands of traditional liquor stores and distributors to sell alcohol online.
Traditionally a conservative sector, less than 5 percent of the country's alcohol sales are done online, due to the monopoly on the market by large distillers. Brand loyalty is also a marked trend in China, Hao said. Pressure will gradually push sales channels to branding, standardization and setting up chain stores.
Editors: Zhang Yushuo, Kim Taylor