Hello everyone. Since today’s guest comes from France, I thought it would be appropriate to start with a blooper in a sign in a Paris hotel elevator, which said, very simply in English, “Please leave your values at the front desk.” 

So, with that, today’s guest is Cecile Israel. Cecile has extensive experience and Experience in international business and marketing, particularly in the hospitality and food and beverage sectors.  She started her studies and career in hospitality, evolving into strategic management. She has recently returned to her native country France. After six years in China, where she launched her own company, Easy Bacchus, combining wine marketing and technology, she is known as Ceci The Wine Lady.

Before moving on to an exciting food tech company with Epermarket Group, where she led market development in South China, she was also the president of La  French Tech, a powerful international tech network at the time. We are delighted that you have joined us today. 

Hi Philly, thank you so much for having me today and for that great opportunity, and I’m really excited to share about my past. 

What other key elements might determine success in the wine business? 

So, I will say branding in wine is really important because It’s totally normal. China is now a big producer of wine, and has amazing wine. But consumers don’t know about wine. They really know wine in terms of branding, so when people don’t know a product, branding remains key. 

So, they need to buy a brand. So, it will be big companies that invested a lot, like Penfolds, which is the Australian wine company owned by Treasury Wine Estates, one of the biggest Australian wine companies. I say this because there were some anti-dumping stories and now Australian wine bottles are currently prohibited from being sold in China, but another brand, for example, – it is actually funny to say “brand” – is Bordeaux. Bordeaux wine became so famous that it became a region in France.

So that kind of reference is very important for Chinese customers. If they don’t know, it will be difficult for them to buy, and this is where social media comes in. One of the influencers recommended them. And then they can follow the recommendation. 

You mentioned an Australian company or an Australian wine. What is its name? 

Yes, yeah, the brand is Penfolds, and it’s owned by T.W.E.

Can you spell it? 

It’s P.E.N.F.O.L.D.S and it’s owned by T.W.E. So Treasury Wine Estates, and this was before the anti-dumping story, China represented 30% of their revenue. So far, it has been cruising from day to day. All Australian wine has been shut down. However, this benefited French wines, which reclaimed first place in terms of market share. It’s a big war in the wine business. 

I think you’re referring to the Chinese government’s banning many Australian imports that have been effectively prohibited. 

Yeah, right?  

like Australia, right? 

Yeah, there were and have been a lot of elements that were combined at that time, but the main story was that it was an anti-dumping case. As a result, the Chinese were told that the Australians were selling at a cost, less than the production cost, just to be able to sell into Chinese markets.

And do you feel that was true, or was it an invented excuse?

I have no idea, and I think there were a lot of different elements that were combined together. Political elements and economic elements as well. The only result is that right now they have to reinvent themselves. They have to, and they actually did because they found a way to purchase some Pinard in China and produce wine that is now produced in China.

Oh, how intriguing! I had no idea that China grew its own wine. I had no idea.

So, they do, they do, they do, and actually, as you know, more than half of the consumption is dominated by local wines. We all always think about imported wine because that’s what we see. You know what you know in supermarkets, and that’s all about big cities. 

But what’s next? The majority of wine consumption that occurs there is local wine in China, and then there is really bad-quality wine. But we have amazing ones. I saw a difference in testing from the day I arrived, especially in two areas in Ningxia and Shandong provinces. And six years later, the quality greatly improved. I am very interested to see how the wine market will evolve in the next ten years. And especially, you know, selling overseas. 

I’ve never seen the Chinese selling their excellent wines overseas. 

So, a little. 

Any shops here? 

So, it is a B2B circuit because it is a B2B circuit. Only contract with exclusive distributors. It’s not easy to find, but we can still find some. You know, yeah, and it costs quite a lot actually, even when buying in China, those very, very good wines to stay cool. They cost $500 a bottle because it’s very expensive to produce, but for different reasons. The first is that the climate is very hot, so they need more water to irrigate the soil. 

Then everything is made manually because of the climate, and it’s not straight, so they are. There aren’t many machines in use. So, everything is picked manually, and all the big machinery is actually used to produce wine in the vineyard. They have to buy that from abroad. They are not currently producing it, so it will raise the cost of producing wine.

And finally, within the same vineyards, in different ways. Well, usually in countries, you have OK on all sides. Pinot noir is all on that side, and Chardonnay varies greatly from one range to the next. In China, it requires a lot of different treatments. Then, when you combine the various grapes, it costs a lot to produce, and that’s why even local wines sometimes cost more than very, very good, imported wine. 

In terms of when you were there, basically running your company or your enterprise, how would you describe the management styles between Chinese companies and French companies? 

So, I had more experience in management on my last journey, which was to a hypermarket, because I was with my own company, Bacchus. I was a solo entrepreneur who only worked as a freelancer with one local hire. The other ones were based in different countries, but in my previous experience, We had a few people who lived nearby … people to manage. And yes, it’s definitely different. 

I will say, for example, in France, the management is quite flexible, but of course, it depends on the size of the company. For example, Startup and scale labs are much more open and use a flat hierarchy. In China, yes, it will be more traditional. The more top-down approach, but if you respect all of your calls for how to communicate with you, calls to your manager, and so on and so forth, you can still speak. It’s not as if you don’t have it. You can still exchange ideas. 

Yeah, quite different as well, as I mentioned at the beginning of the podcast, and I will say that in many countries, in accidents, people speak a lot. They speak, they have a lot of meetings, and so on, before they are able to make some decisions, and it goes much faster. In China, people are much more pragmatic, so OK, something doesn’t go. We will try that. And then we adapt. So, I really like that side of doing business. 

Very interesting. What about the marketing benefits and appeals? What elements work in the Chinese markets? For example, is it symbols, colors, or some other ways to attract Chinese customers besides the influencers that you mentioned? 

Yes, absolutely, the design and wording will be crucial. So, speaking about design, of course, some colors attract a lot of attention. Red is popular among Chinese consumers because it is associated with luck, so it will be lucky, and so on. 

Then, according to the year of the Chinese calendar. This year, for example, will be the year of the rabbit so you will have everything related to rabbit design; rabbit wording will undoubtedly increase your sales potential, as will all the wording. It is really important in China. 

The name of the wine. People frequently change their names to something positive, something that brings luck, something that brings prosperity, something that brings wealth. So, this is really important. 

And then, in terms of design, I would say all those traditional wine labels, you know, with the name of the chateau written in a very old-style font, will increase in value. I mean, in the mindset of a Chinese customer the wine, in addition to the wood cork it’s what we call the “new world” wine with the mindset of the Chinese consumer, even if the quality is actually better for the Chinese consumer. He won’t speak. 

What about the wood cork?

Yes, yeah, they won’t. During transportation and also if the wine needs to be etched. So sometimes it’s even better for me to have cap wine, yeah.

For example, in terms of design for my wine tables, I couldn’t use, you know, for the wine aromas, some icons or fruits that they didn’t know. For example, they don’t know the mulberry or raspberry. But they are familiar with dragon fruit. You know what they eat requires you to adapt everything as well to what the Chinese consumer is aware of, experiences, and, of course, desires. People will not accept in the same way of tasting wine or picking wine, wherever they are coming from, and whatever their level of education. Also, price budget. 

Very fascinating. What about pricing models? In the Western world, for example, and since you’re French, you certainly know about perfume. It costs relatively little to produce, but the prices are charged high to create a sense of exclusivity and prestige, and the quality is extremely high quality.

It’s high profits for a small amount whereas wine can be either priced low for a mass market or priced very high to create the same sense of exclusivity. So, in China, which pricing models do you use? Or is it a combination?

I will say it’s more of a combination, so definitely something important in China is that the price will meet the value that you give to a certain product. So, if it is a good one you will have to price it a little higher. Just because the Chinese consumer needs to put some value on that product. But you must also consider the cost, and the fact is that when it comes to imported goods, you must consider the cost. The cost of logistics also rises significantly, particularly with COVID or logistics and cost.

So, all transportation costs rose especially during COVID. And when you first arrive, why do you have to pay taxes? And then it can be very high. And just to give you an idea, on French wine, you have to pay something around 46 to 48% in taxes. So, it’s a lot.

But some countries benefit from trade agreements. Chilean and New Zealand wines, which were popular before Australia, are still available and will as well link to the price points that you will provide for your product. Personally, I have always tried to get the most bang for my buck in my community. 

But the great thing is that I was distributing a low volume of wine as I was purchasing wine from the first importers. So, the big, big one was not the distributor. Again, just the first importer. That, for example, was transporting the wine from that chateau in Bordeaux to China. And the big advantage is that I benefited from the low price as well, so I could put in a fairly reasonable margin to sustain it while still providing excellent value to the end consumer. 

Really interesting. Thank you. 

How does a Chinese wine consumer differ from a French Wine consumer?  

Such a difference! First of all, they consume more red wine, so of course it is also 

“They” …  the Chinese consume more red wine than the French?

Yes, yes, yes. And then there are oxidants in general.

When I first arrived in China six years ago, they were drinking 90% red wine and only 10% white, sparkling rosé, and so on. That changed a bit. Maybe it’s now 80% red wine and the rest white or sparkling rosé, but red wine still dominates. This is due to a variety of factors. 

The first one is literally how wine is translated in Chinese: “red wine.” You say honjiou, red wine so if they call the new wine “red wine,” you know it’s red wine. And when it comes to white wine, it is frequently associated with the Chinese liquor baijiu, and it most emphatically is not a wine. As a result, the word itself is very important. 

Also, red wine, because the Chinese don’t like to try anything too cold or fresh, which is usually, you know, white wine or sparkling wines are chilled. And Chinese consumers don’t care to try something too cold in their mouth. Red wine is something like that. They simply prefer it in general.

Then, in terms of taste, They prefer I say something medium to intense with red fruit and spice aromas. So, for example, French Bordeaux chili (?) and wine, or Australian wine, definitely fit, and they don’t really like when there is too much acidity. OK, when they drank white wine, that really happened more with women, they prefer something very aromatic, very fruity, and very sweet. 

The taste also varies from north to south. In China, you know when you make marketing decisions. I mean, you can’t say I’m selling to China; I’m not selling to China. You’re selling to some kind of market in every province that is very different. For example, in the north, they are simply, if I may say so, eating. Much more dense food. They prefer lighter food in the south of China. They, too, prefer something sweeter, so the food will taste accordingly to the taste of wine they prefer.

The majority of Chinese consumers are concentrated in China’s coastal cities. And not much in the countryside. In fact, Guangdong province is home to one-third of all Chinese consumers. China’s southernmost province. So it’s very interesting to learn. Younger and younger as well. You know, if you check the forecast, the consumption of wine should double by 2026, and it will be mainly driven by Generation Z and Millennials. Young consumers. 

As I was saying previously, it’s mostly local wines that dominate, but of course, imported wines are very present, especially since Australia left China, and now surpassed France in terms of market share, followed by Chile and Italy. Actually, if you just put together France, Chile, and Italy in terms of imported wine, it represents 70% of the market share, because it’s really a lot. 

70% of market share is imported wine from France, Chile, and Italy?

Imported market share Yeah, right, yeah. 

Then how people consume wine is a completely different experience. I would say people in France, and more widely in Occident, enjoy wine at home as well as in restaurants, and frequently with some Food.

In China wine is mainly consumed. With something linked to socializing, it won’t be at home; it will be mainly in restaurants or hotels, at events, or as a gift, as it was before. The first method of purchasing wine is now, I would say, more evenly split between social consumption and gifting. But definitely not at home. Of course, with COVID It rose a bit. However, the majority of wine is still consumed outside of the home.

And then something very different is that, of course, in France and Occident, we frequently have one dish followed by another, so you can pair one dish with one specific wine. The thing is that in China, on the table, you sometimes have dozens of dishes that arrive at the same time, so it’s really complicated to pair a wine. And of course, Chinese people don’t eat a lot of sweet stuff, but It still happens, especially in South China. 

So sometimes at the beginning of the meal you have something sweet, so that will stay in your mouth because the sweet taste is quite strong, and then you move to something super light or something spicy. And then you have wine, only one of which you need to find to pair. So, it’s a different way of consuming. People, of course, will always cheer up when we do, let’s say we “Gan-bei” [cheers] together; that’s a great way to build a relationship. Well, to show respect. 

You will always be aware, instead, like, for instance, we will just choose one or the other. You eat twice, you know, mainly at the beginning and end of the meal. In China, you will do that repeatedly, maybe ten times during the same dinner, and you will also cheer with different people, mainly the person who invited you, because you have to show respect. So, it’s critical for all of that social aspect. 

So you’re talking about toasting when you say “cheers.” You’re talking in English about toasting?

Exactly, exactly, exactly. 

Exactly. As well, when you drink it, So “ganbei” comes from baijiu, so usually when you “ganbei baijiu” you have to drink it all at once, but it’s really a small quantity of wine. 

Ganbei Baijiu?

With the “baijiu,” the Chinese liquor that I was mentioning previously,

It’s very strong, so that’s why we only serve small quantities, but then you have to drink it. You know everything at once, and the same is true for wine. This is also why we only serve small amounts of wine when we serve it. We are completely different from what we are used to in France. Yeah, in the West, yeah. More broadly, in the West.

And then something completely different, people buy wine. So, I mentioned a lot about the power of social media and the influencers that literally control TikTok. And all the other social media platforms, such as Xiaohongshu. They perform some live streaming and sell thousands of wines in minutes. As a result, people are increasingly purchasing wine online. I will say 30% of consumers are buying wine online. This is huge. And it gets even better with COVID. 

And if you compare it to the West, that number is only around 10-12 12% max, so it’s really huge in China. 

That 30% of the majority of wine purchases is made online. Then, of course, supermarkets are still present, but online marketing will develop and continue to develop with the power of social media and influencers. 

It’s also very interesting because you have some global-influence users who sell a variety of products and work with various brands, ranging from fashion clothing to wine, and you also have some specific wines targeted by Wine-focused influencers who specialize solely in creating and selling wine-related content. 

And you have one there, which is called Lady Penguin, very, very well known in China, and she’s, for example, specialized in wine, and I don’t know from her what she did in revenue last year, but it’s definitely more than what we’ll make as a good wine importer. So, it’s really crazy to see how online, as you know, live streaming and services are now dominating the wine market.

That’s fascinating. Is there anything else you’d like to add before we close?

No, I will say that my experience in China has been really amazing. I also had far more opportunities than I would have had if I had stayed in France. Of course, you create your own opportunities, but I really think it’s a wonderful country if I had to sum it up in one word, adaptability is something I learned and continue to practice.

Adaptability yes. 

Well, thank you so much. Cecile, this has been a superb, wonderful interview full of wonderful facts.

Thanks to you, Philip. 

I hope everyone will join us next time for another edition of Global Gurus and their stories of international business. This is Philip Auerbach from Auerbach International (www.auerbach-intl.com).  Thank you.