A new start-up is hoping to change the way South Africans buy wine, benefiting both consumers and farmers in the process.
The site, SaleWine.co.za, founded by local wine expert AJ Ray, is modelled on the “members-only flash sale” model of e-commerce, where a limited set of merchandise is available for a defined period of time.
It’s a model pioneered by international companies such as Gilt Groupe and HauteLook. This type of e-commerce is expected to generate US$900m in revenue in 2010, according to research by eMarketer.
SaleWine uploads a new offer, consisting of one red and one white wine, every 72 hours. The flash sales are open only to members of the website, though membership is free. Wine must be ordered in minimum case lots of six bottles and is typically discounted by between 30% and 70%.
The company offers free delivery in metropolitan areas for orders of 12 bottles or more; maximum order size is 60 bottles as the service is aimed at individuals, not restaurants and liquor retailers.
Ray, who has self-funded SaleWine and still owns 100% of the company’s equity — the website went live five weeks ago — says he hopes the site will give wine farmers more options to sell their wine and to do so more profitably.
It’s often difficult for farmers to get their products into retail stores, which stock on average about 100 brands. “There are 605 wine farms in SA, with perhaps eight to 10 brands each,” Ray says.
He says the market in SA is big, with annual sales of R6,5bn. He expects SaleWine will sign up at least 20 000 members in its first two years of operation. Customers are mainly professionals such as doctors and lawyers.
To date, the site has sold about 800 cases of wine. These were mainly wines not sold through regular retail channels. The focus, says Ray, is selling wine made by smaller wine farms.
Ray writes a synopsis of each wine that is sold, which is published together with technical notes from the farmer. “It’s all written in a language people can understand,” he says.
Wines on offer range typically from R30/bottle to about R150/bottle. “We can’t make it work for wines that cost less than R30 and still deliver them for free.”
Sauvignon blanc and merlot from proved the most popular wines among buyers so far.
Will SaleWine branch out into selling other products? Not necessarily, Ray says. Because he has years of experience in the wine industry, he wants to stick with what he knows.
“There is a thought that next year we might go into olive oils. But no one is going to buy a case of olive oil in one go, so we need to figure out how to package it. We certainly won’t go into spirits, or clothing, or anything like that. There’s a big enough market just in selling wine.” — Duncan McLeod, TechCentral
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