Mondavi’s Berny Yang and Lydia Li join Alizila’s Adam Najberg to detail how the U.S. wine brand has used compelling content and big data via Tmall to win a rave following in China. Winery videos and sharing a tasting lexicon with customers has educated many a palate in the world’s most-populous country.
Below is a link to the podcast and a full transcript.
Full Transcript – Mondavi Brings a Touch of the Grape to China
Adam Najberg: Time now for Alicast, a deep dive into innovative and emerging trends in e-commerce, online payments and digital entertainment. Brought to you by Alibaba Group, we’ll offer insights about Chinese consumers and brands doing business in China. We’ll delve into global online retail, cloud computing, big data, and other must-know topics and issues in and around one of China’s largest companies.
I’m Adam Najberg.
Adam Najberg: Robert Mondavi established his winery in Napa Valley in 1966. His vision? To create Napa Valley wines that would stand in the company of the world’s finest. Wines, he said, should reflect their origins. They’re a product of the soil, the climate and careful stewardship of those resources. And he believed in combining the newest techniques and technology with time-honored wine-making traditions.
Since then, Mondavi wine has become synonymous with California and a symbol of the best Napa Valley and the U.S. can produce. And more recently, that wine has reached the shores of China, the world’s most-populous country. With us today on Alicast is Berny Yang, Mondavi’s vice-president and general manager for China, and his colleagues, Lydia Lee, marketing manager for China.
Thank you for joining us.
Berny Yang: Thank you, Adam.
Lydia Li: Thank you.
Adam Najberg: Let’s hop right into it. Berny, I hope you’ll share some of the back story about how and when this well-known American brand set its sights on China.
Berny Yang: Right, thank you, Adam, for all these kind comments on the brand.
Personally I’ve been with the alcoholic beverage industry for 27 years. I really feel like to say it was a great honor to work on this brand, because Mondavi is, as you said, it’s not only just a fine Napa wine. Mr. Mondavi himself is such an inspiring leader. Because of him, that Napa wine has been seen in the world.
And also has been treated, the fine wine that can be on the same table with the first growth French Chateau wine. So, I personally am inspired by these spirits very much. And this is exactly what we are trying to do, is to introduce not only the fine wine to Chinese consumer, but also introduce the spirits of Mr. Mondavi to the consumer in China.
The brand has been available in China for years. But until recently, Constellation brands, the company, decided that, of course, it’s because the fast-growing, imported wine sector in China. And the company decided that this is really the moment that we need to be committed in building the brand in China.And hopefully, building Robert Mondavi brands as one of the leading imported wine in China.
Adam Najberg: So what step did you guys take, then, to do that?
Berny Yang: First of all, we review our distribution channels in China. We’re working with a very powerful distributor in China. And secondly, of course, ever since two years ago, we start the relationship with Tmall.
Adam Najberg: Could you guys talk about the onboarding experience for Tmall? Specifically, once you decided that’s the way that we want to get into establishing like a strong flagship in China. How did that then happen? What was the experience like?
Berny Yang: Back in early 2015, I’ve been in touch with Tmall. At the time, honestly, it was Tmall who approached me. They said, ‘hey Berny, we really feel like to have Robert Mondavi setting up a flagship outlet at our Tmall.’ Honestly, at the time, I wasn’t that knowledgeable about the operation on Tmall. I said, ‘hmm, e-commerce. Interesting, that’s quite new to me because I’m from the old school.’
But my contact person at the time had been kindly explaining the Tmall operation and how powerful Alibaba is, of course. And also front-end, and then we arranged some different levels of dialogue. And then we arranged for the Tmall management to visit the winery, the Robert Mondovi winery. And set up a meeting with Tmall management and with our wine maker in the Robert Mondovi winery, so that we have a deeper understanding.
I think we spent at least six months discussing what is the best way to promote Robert Mondavi brands on Tmall. So, eventually we launched the Robert Mondavi flagship outlet on Tmall August 2015. And I’ve been working closely with the Alibaba PR team in San Francisco as well, and our PR team in the states, I think. Closely working with the Alibaba PR team in San Francisco to not only, announce the operation in the China but also in US.
Adam Najberg: You sounded a bit skeptical when you first talked about being approached about being on Tmall, and you just said you’re old-school. What turned you in to sort of being more contemporary and convincing you that it actually was the right way to go? Was there something you heard or something you saw?
Berny Yang: Well Adam, honestly, in the beginning, I had a perception. I said e-commerce, would it be just for like entry-level cheap product?Will the price structure on our e-commerce affecting the structure offline? Will my offline distributor been affected by aggressive operation e-commerce?
That’s my perception, right? That’s why when the representative of Tall approached me in the beginning, I feel a bit hazardous. I say, hmm, interesting, but I wasn’t knowledgeable about what exactly we can do. But eventually what I can share with you is, we realize that Tmall is not just simply a transaction platform. It is also a wonderful platform that we can have direct dialog with our consumer. It’s a brand building platform.
Adam Najberg: As opposed to going through a distributor and just selling cases of product, right?
Berny Yang: Right. Well I think online, offline, right?How we leverage each and every contact point to reach our consumer.
Online purchase has been such a significant, such an important venue to reach consumers. I don’t need to share with you the figures right now. You understand it best how fast it grows for the past few years. And Alibaba Group and Tmall Taobao, no doubt like 70% of the market, of this. And also not only to wine. I mean we’re talking about the older products, right?
Adam Najberg: But when you’re reaching out to customers directly, and it sounded from your tone that that was something that was desirable and attractive, how did you talk to them? What were you saying to them in China? How did you get them to pay attention to your brand and to your wine online?
Berny Yang: Well, I think, what we have been doing, right, it’s not simply just when consumer clicks into the flagship outlet. It’s not just like they will see the bottle shot, right, and the price. So we’re trying to build the story, we’re trying to, with the help from Alibaba. We have a very good video of the winery and the interview of wine maker. And also the scenery of California, the scenery of Napa, and specifically the best sub-region, Oakville ,and also the Tokalon Vineyard. So, it all captured in the video, and then when consumers visit the flagship outlet, it’s not only like shopping for a product.
Adam Najberg: It’s experiential right?
Berny Yang: It’s experiential. At the same time, we want consumer to be exposed to the brand story. And also to the beauty of Napa, the beauty of the specific Oakville region that the best Mondavi wine was created.
Adam Najberg: Now let me ask you this, you are both of Chinese descent…
Berny Yang: Yes.
Adam Najberg: And you speak Chinese. Tell me what you know about Chinese consumers that made you realize that that was important. And what other things do brands like yours need to know about Chinese consumers, if you want to sell to them online.
So, you came up with a content strategy that made them get up close and personal with who you are, where you come from, what the wine and the winery stands for. What else do you know about those consumers, what that they want?
Berny Yang: Well, I think first of all, I think it’s positive things that, Chinese consumers are not strangers to wine. Wine has been available in China for years. Imported wine, of course, is a fast-growing sector, but don’t forget that domestic wine is a much bigger market. It’s still much bigger than imported wine. So wine is available. Wine is dear in the daily life of the Chinese consumer. I think the key to not only us but all the great owners is, how can we attract our target consumer to experience, to appreciate, our product?
Adam Najberg: But Lydia, let me ask you. What is your target consumer in China?
Lydia Li: For Robert Mondavi Winery, we have a typical profile of Chinese consumer. Because this not a very entry-level wine, so we are targeted to city elite. Some people who already get some success. The white collars, middle class families, who would like to have, who prefer western lifestyle and who like to enjoy quality life
Adam Najberg: That’s a pretty detailed description.
Lydia Li: Yes, we have a full description of our customer profile and we want to be very targeted under our message and brand-marketing strategies to target these consumers. So, for example, if you asked me on Tmall, what kind of benefit could we provide through Tmall to the consumers, it’s all about occasions. They are going to consume why? For example, you know Tmall always have kefu(customer services). They provided it, comes out and see for the guest, for the consumers. For example, if they want to buy some wine, I said bring this what kind of wine you need to buy. The Tmall, service staff will give them some advice to help them to choose the correct product for the occasions.
Adam Najberg: And that’s beneficial for Mondavi as a brand, then, in China, right?
Lydia Li: Of course, yeah, right.
Adam Najberg: Let me ask you a weird question, because you always hear oenophiles in the United States talking about, ‘it has a slight nose of chocolate and a hint of huckleberry.’ Now for a Chinese who is fairly worldly, but maybe hasn’t traveled to Montana and has no idea what a huckleberry is, how do you talk to Chinese consumers about what your wine tastes like? What’s the lexicon for that?
Berny Yang: [LAUGH] That’s a very good question. Honestly, the beauty of appreciating wine is first of all, you need to come up with your own language to describe the wine. You don’t just simply read the tasting note prepared by French-
Lydia Li: Wine maker.
Berny Yang: Wine maker.
Adam Najberg: Darn, I’ve been doing it wrong with all these years
Berny Yang: [LAUGH]
Adam Najberg: Sorry, now you tell me!
Berny Yang: [CROSSTALK] Chilean wine maker, Australian wine maker, because they describe that wine with their vocabulary, right? The fruit of your neighborhood, or the fruit that they have experience in their life. For example, our winemaker, the chief winemaker of Robert Mondavi Napa Tier is French, right?So if you have a dialog with her, the way that she describe her wine, the vocabulary that she uses might not be familiar to Chinese, or even to Americans.
Adam Najberg: But attributes-wise, like a lychee might have a slight bit of acidity, kinda like an orange. Not like a lemon, which is very acid. Is that kind of what you’re saying? That you relate to the fruit-
Berny Yang: For example, you mentioned lychee. Lychee is very, I would say, it’s very Chinese. If you ask any, you ask Lydia, a typical Shanghai lady. She’s very familiar with the fragrance, the smell of lychee. We have a product, Napa Moscato. And we conduct a tasting session among Chinese pink collar.
Adam Najberg: Pink collar, what’s pink collar?
Berny Yang: White collar, blue collar, pink collar.
Adam Najberg: Okay, that still doesn’t answer my question.
Berny Yang: Like an office lady.
Adam Najberg: I see, okay.
Berny Yang: Pink collar, right? And they come up with the description. So, by smelling it, what did you get? Lychee, right, from moscato. But if you serve the same wine to consumer in US, they may not come up with that word. They may come up with yellow peach, or apricot, or some other fruit. But the key is, aptly as you said Adam, is to use your own vocabulary. Use what you get from the wine, right, to describe it. So I don’t think, not only China, okay? We go to Avignon, we go to Thailand, Korea, right?Consumers just simply use their vocabulary, different when they are familiar with, the fruit they are familiar with, to describe the taste that they have experienced.
Lydia Li: Usually we don’t use herb or berry, cuz it’s kind of, even for me it’s kind of difficult to understand. But we use some regular fruit and recipes to help the consumers to understand something that they are familiar with. For example, banana, apple, lime, lemon, orange, citrus, they all understand.
Adam Najberg: Everybody understands chocolate, too, right?
Lydia Li: Yes, chocolate, coffee. And I think another important thing for wine, for the tasting notes, it’s to tell them how to pair with the food. And this is very important to localize for different market, because you have different kinds of food and creation in different market. And how to pair the wines with your food that you are familiar, that you made in your home, is very important. For example, we would pair like a cab with beef, because the fat matches well with their acidity.
Adam Najberg: Cabernet sauvignon [CROSSTALK]
Lydia Li: But you can tell Chinese, these specialization Chinese consumer, you can pair too with hong shao rou (braised pork), which also has a lot of fat-
Adam Najberg: Hong shao rou, mm, you’re making me hungry here [LAUGH]
Lydia Li: And strong sauce. Yeah, I think that’s the way we want to communicate with our consumers.
Adam Najberg: This is good. This is a way of life. It’s not just a vocabulary.
Lydia Li: Yes.
Berny Yang: Exactly.
Adam Najberg: So as we wrap this up, let me ask you. You have two years under your belt on Tmall. Would you consider it successful, and how do you measure that success?Is it simply a numbers game, or the feedback that you’re getting?Tell me about it.
Berny Yang: Whether it’s successful or not, I think only my boss can judge it.
Adam Najberg: You’re still here, you still have a job.
Lydia Li: [LAUGH]
Adam Najberg: So you must be doing something right.
Berny Yang: Yeah, exactly. Joke aside, I think, allow me to share with you what have we have learned and what we will plan to do next.
Adam Najberg: Great.
Berny Yang: I think what we have learned, first of all is, as I have explained, Tmall is not just simply a transaction platform. If it’s a transaction platform, it is no difference from a hypermarket, right? We just go to the wine section, and then we pick the bottle. We look at the label. Tmall is far beyond that. First of all, it’s data. Working with Tmall, what we have learned the most is the power of collecting all these data. So we understand who is buying our wine? What is the consumer profile? Male, female, first-tier city or second-tier city, age profile, buying pattern. We get all these information. That helps us. Allow me to confess: We haven’t done our job the best to fully leverage the data that we have collected.
But this is clearly the next step to us. How we, by understanding our consumer profile, how we can do better to serve your needs and motivation, right? How can serve better, so that we can build a stronger relationship with our consumer? This is their next step to us. Secondly, what we have learned is, by promoting for the past two years. By promoting different tiers of Robert Mondavi brand. Allow me to jump out from this for a while just to take you through that, Robert Mondavi is a big family. And we have technically three tiers, from the everyday drinking in United States that you’re familiar with.
It’s the ‘Woodbridge by Robert Mondavi’ tier. On Tmall that’s around 120 RMB per bottle for 750 ml Woodbridge. And further up, we have Robert Mondavi Private Selection. So on Tmall, it’s around 200 something RMB per bottle. And then we move into the Napa tier, which is from the Napa Valley.
On Tmall, it’s around 400, 500 RMB per bottle. But even going up, we have the District, which is OakvilleDistrict, and then further up is our flagship product, Robert Mondavi Reserve. So, that’s across different price range and also different proposition for different purpose. So, by promoting, back to the question that you have asked, by promoting products at different tier, actually we learn that Tmall can not only be a perfect platform for Woodbridge tier product for young people. Not only that. Of course that’s our majority of our business right now. But starting from late last year and this year, we learned that more and more consumers start approaching the flagship outlet and start purchasing Napa tier and above. From what we have learned, because from time to time, we need to have meeting with the operator to Tmall and then the Tmall consumer product department as well.
And so, what we’ve learned is, first of all, there’s so many people, because now applying for (a U.S.) visa has been much easier, put it this way, much easier than before. So just think of number of tourists visiting the U.S. every year. And what is the number-one place where they visit? It’s California, right?
Adam Najberg: They’ve seen the videos on your Tmall flagship store, so they wanna go see the winery, right?
Berny Yang: Right. And then when they, for those people, for those wine lovers, when they are in California, when they are in the Bay area, they would like to visit Napa Valley. When they are in Napa Valley, what is the number one winery they will visit?Which winery-
Adam Najberg: It’s Gallo, right?
Lydia Li: [LAUGH]
Adam Najberg: No, no, it’s just-
Berny Yang: You’re so kind.
Adam Najberg: [LAUGH] No, of course, it’s the great content you have on the flagship store that makes them want to go see it right?
Berny Yang: Right. Exactly. And also Robert Mondovi Winery is probably, I can say, is well established for visitors. Of course, I cannot say, which is illegal, that Robert Mondovi is the best wine in Napa. This would not be true. But I think I can comfortably say that that is one of the best facility for tourists, for visitors.
So, every year there are more than 50,000 Chinese visitors visiting Robert Mondavi Winery. So, these people are scattered in China. Of course we haven’t done our job good enough to ensure that when they feel like to buy Robert Mondavi, they know where to go. That’s the beauty of having Robert Mondavi flagship outlet on Tmall. So, there’s one data that I have learned. I think it’s published by Tmall itself. From 2013 to 2016, the visitors, online purchaser, from outside of first year city has grown four times. That’s how powerful Tmall is, and that’s the very reason that we set up the flagship outlet on Tmall.
So that when consumer, for those who have visited Mondavi, who has great experience in the winery, who understand the story, the beauty of Napa wine. From time to time, when they feel like to buy a bottle of Napa, Tmall can be the place to go.
Adam Najberg: Berny Yang, Lydia Lee, I could speak all day with you guys about wine. It’s one of my favorite subjects. Food is the other one.
Lydia Li: [LAUGH]
Adam Najberg: But we’re out of time. I wanna thank you both for being on Alicast, and I hope we can do this again. Thank you.
Lydia Li: Thank you.
Berny Yang: Thank you.
Lydia Li: It’s our pleasure.
Adam Najberg: You’ve been listing to Alicast, a regular podcast from the Alibaba Group. Thanks for tuning in. I’m Adam Najberg.