Special Report: Dawine is pivoting from direct-to-consumer sales to B2B, in an effort to increase its exposure to China’s $1.1 billion a year thirst for Australian wine.

The shift to B2B is paying off, as the company (ASX:DW8) marks off a 17,000 bottle sale for their first business-to-business transaction.

Until now, the China-focused vino seller has tried to build its own consumer database through a variety of online sales channels, says chairman Piers Lewis.

But while they’ve made progress, customer acquisition costs are high for brands that aren’t world-famous like a Penfolds or a Jacobs Creek.

“Rather than compete directly for customers, we’ve recognized that it is more efficient to partner with existing Chinese retailers and sales channels, providing them with a platform to access Australian wine brands,” he said.

“Our aim is to provide a one-stop-shop for Australian wine producers of all scales to access the lucrative but difficult to navigate Chinese market. We’ll manage the entire process for them, from when the wine leaves the cellar door to when it’s delivered to a home in China.”

The new operating model also aligns with the company’s proposed acquisition of Wine Depot, an integrated B2B trading and logistics platform that allows retailers to drop ship orders directly to their customers from inventory held in strategically placed ‘depots’.

Dawine has had a presence in Shanghai for almost three years so the proposed acquisition is a logical starting point to establish a depot to service the China market.

Dawine would look to expand the network of depots into other major Chinese cities as demand grows, similar to Wine Depot’s plans for Australia.

Lewis noted the importance of getting the operating model right, citing Alibaba’s $400 million investment into wine importer and retailer 1919.com as a reflection of the market opportunity.

New focus on B2B reflected in rebrand

Along with the change in distribution strategy, Dawine is rebranding as Digital Wine Ventures.

Dawine was originally chosen as the consumer-facing brand in China, but the board has been itching for a new name that matches the new ethos and direction of the company, Mr Lewis said.

“Digital Wine Ventures was chosen as it aligns with our stock code (ASX: DW8) and seems an appropriate fit,” he said.

“It also helps us to set a new mandate for the incoming CEO, Dean Taylor, whose extensive experience in technology-driven and disruptive wine businesses is second to none. We’ve done our best to prepare the company ahead of his arrival, so he can hit the ground running.

He also flagged boardroom renewal, saying that getting new faces on the board is likely to be part of the Dawine – now Digital Wine Ventures – rebirth.

“It really is an exciting time for the company.”


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