Chinese e-commerce giant Alibaba announced Tuesday that it had signed an agreement to offer Robert Mondavi pinot noir, cabernet sauvignon and other varieties on its Tmall platform. The deal will give Constellation Brands, which owns the Robert Mondavi brand, access to Tmall’s 367 million active customers.
Alibaba’s Tmall only online destination for Mondavi in China
Alibaba is struggling with a slowing sales growth and the ailing Chinese economy. Sensing the Chinese consumers’ appetite for Western brands, the Hangzhou-based company has signed exclusive deals with major brands like Zara, Timberland, Converse, and Levi’s. Alibaba said Tmall will be Robert Mondavi’s “first and only online destination” to reach hundreds of millions of Chinese consumers.
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The opening of Robert Mondavi’s flagship store on Tmall will kick off the newly launched “Tmall Vineyard Direct” program that would feature wineries from across the globe. China is one of the world’s fastest growing wine markets. But American companies have failed to gain a foothold in the market dominated by wineries from France, Australia and Chile.
According to a study conducted by the Wine Economics Research Center at the University of Adelaide, demand is much higher than domestic production in China. It has created a huge opportunity for international brands. Chinese people consumed 417 million gallons of wine last year, up 45% from 2000.
China’s growing appetite for Napa Valley wines
Alibaba’s deal with Constellation Brands will allow labels like Woodbridge and Twin Oaks to be sold in China. Constellation Brands generates about 89% of its revenue from the U.S. market. Alibaba executives recently paid a visit to Napa Valley. The e-commerce company said it was looking for more such partnerships.
According to Bloomberg, Chinese tourists account for over 33% of the 200,000 visitors to Robert Mondavi’s winery every year. So, the winery started offering tours in Cantonese and Mandarin a couple of years ago, which might have helped increase the appetite for Napa Valley wines in China.
Alibaba shares inched up 0.23% to $66.27 at 11:24 EDT on Tuesday.