Dawine hopes a move into blockchain will get China wine sales to take off
Food & Agriculture
Food & Agriculture
Dawine is the latest ASX company to announce a move into the stockmarket’s favourite technology — blockchain — as a way to validate the authenticity of its wine.
Blockchain, which provides an encrypted, public ledger of transactions, is best known as the basis of cryptocurrencies such as bitcoin. But it has many other potential applications such as enforcing digital contracts and securing public records.
The National Farmers’ Federation recently called for the user of blockchain in digital supply chains that connect consumers and producers.
Perth-based wine exporter Dawine (ASX:DW8) is trying to build a market in China for Australian wines, but has struggled to push open the Sino-door.
It will look into blockchain-based distributed ledger technology with Beijing software developer ShineTech to allow Chinese buyers to track wines from the point of import onwards.
Counterfeit wine is a big problem in China.
In November Chinese police seized 14,000 bottles of counterfeit Penfolds wine from warehouses in Shanghai and Xiamen, and from five online retailers.
The bottles, which normally retail for $100 each, were being sold for prices starting at $40 on Alibaba’s consumer-to-consumer website Taobao.
In March, Chinese police seized another 50,000 bottles of fake Penfolds wine worth 18 million yuan ($3.7 million).
Dawine launched last year with plans to sell Aussie wine directly into giant Chinese online platforms WeChat and TMall.
It then became the exclusive wine partner for a major offroad car show in Inner Mongolia.
Since then the company has struggled to turn Chinese netizens into online wine buyers, and talks with a potential investor fell through.
New director Tony Ramage told Stockhead Dawine had about $1 million in cash in the bank and would not be doing a capital raise, particularly as the share price is at a 52-week low of 0.7c.
He says the blockchain tech won’t cost them much because it’s largely already built by ShineTech and they are “piggybacking” off them.
Dawine made $108,882 in sales in the half year to December 31, 2017.
It posted a $918,540 loss.
Mr Ramage says the managing director and executive team took a 20 per cent pay cut last week.
Further, Dawine won’t have to pay set up costs of $400,000 as the online sales channels in China and the in house Dawine.com sales platform are now established.
Mr Ramage says Dawine’s platform, which allows Australian businesses to access China and Chinese buyers to access Aussie goods, is the valuable part of the company.
He says many local and Chinese companies have approached them to get access.