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What does a Chinese partner most concern with?

Bon-wine Culture Consulting Company by 09/03/2013  

Some foreign wineries didn't cooperate with China's agent before. Owing to they use the native way to think and judge, it is difficult for them to understand the problems that are proposed byChina's agent. We prepare some common problems for the foreign wineries to refer to:

i. Price

Most of the agents concern with the price mostly. Some of the agents put forward the price when the wines are not completed. Those agent only know how to distinguish the grade of the production region. They know the AOC, DOC and DO are better than VDP, IGT and VDT. They just emphasize on low price but high quality, and do not pay attention to the quality/price ratio. So, the foreign wineries need to explain the quality/price ratio and choose a lowest price wine in the same grade.


The other agents know how to distinguish wine's quality/price ratio. They know the price tendency in the market, and can judge the wine bad or good after tasting. Owing to them also like low price, the foreign wineries should know their price be of superiority whether or not first. They should know their price fairly well in the heart when discuss the cooperation, and make the choice of whether insist on the price or reduce it according to the situation.


We suggest that the foreign wineries should not tangle in the price and promise at the first if they are not interested in the agent. There is a gap in the first quotation and final confer price. Some agents used to asking,“ what is the lowest price?” The best answer are that: “because price relate to many factors, if you want to cooperate with us , we will discuss the price at last or that is the lowest price in China’s market.”


ii. The coverage of the product's grade

Although middle and low grade wine(EURO 0.8-2.5 )sell well inChina's wine market, many ofChina's agents are interested in the foreign wineries whose product grade and size are completed. When they import wine, they will import 80% of the middle and low grade wine, with some quantity of white wine and high grade wine (FOB EURO 5 above) So, the foreign wineries whose product is single and the price grade is few should considered to sell combo. That could complete the variety and price grade of the product, and enterChina's market easily.


iii. The stock quantity

The foreign wineries concern with the stock quantity mostly. But, most ofChina's agents do not import a large number of quantities for one time blindly. For example,China's agents import one or two a unit of length of the standardized containers or several thousands bottles of wine for one time mostly. The reasons for it are that the lack adaptability of the new product, the long time for promotion and establishment of the sale web and the occupation of the fund for large stock quantity.China's agents often import small quantity, and then import again to meet the market demand. So, the foreign wineries must understand the situation ofChina's agents, and can not put the high requirements on the stock quantity and sale quantity at the first time.


iv. The support of the market

The support of the market is that the wineries supply the charge to the agents for market promotion such as advertisement fee, present fee, enter the arena fee, open bottle fee and so on. The newChina's manage imported wine companies often put forward the requirements according toChina's wineries’ market style. Under this situation, the foreign wineries should explain the reason of “price includes the fees” to them. The price that doesn’t include the market promotion charge is the best way for them to save money.


v. The benefit policies

To encourage the agents, the benefit policies are necessary. They can show the cooperation sincerity of the foreign wineries. So, the foreign wineries must set up some benefit and encouragement policies.(refer Chapter XII. Section VII. vii and viii.)


vi. Payment for goods settlement

s agents usually accept the ways of international immediate settlement of credit loans. The long-term credit cards have no meaning to most ofChina's companies. Because the banks do not supply the credit lines to the small and medium-sized companies, issuing the bonds are 100%. Owing to the promotion funds is large at the beginning,China's agents hope more support of the payment for goods from the foreign wineries. To this requirement, some foreign wineries promise that they give the installment support to the next goods after the accomplishment of the sale in first year.


vii. Market risk

Some newChina's manage imported wine companies worry about the unknown market risks. How the evade the risk is the problem for them to think over. Although the foreign wineries could give more promises such as withdraw the products, they can propose the benefit terms to give the agent confidence.


viii. Agent by single

Considering the benefit of oneself, the cooperation partners would request agent by single. China's agent request the foreign winery promise it to be the single agent, and the foreign winery also request China's agent promise it to be the only wine brand.China's agent that has the strength could be promised by the foreign winery under the premises of the sale quantity. But, the middle and small wineries and agents should think it over for the first of cooperation. To the foreign winery, they can promiseChina's agent to be the single agent or the general agent in the limited time and region under the promise of sale quantity. Using this way, they can avoid the risk of the market promotion and the wrong choice ofChina's agent. The foreign wineries could deal with the problem ofChina's agent's request of being the single agent reasonably. They can requireChina's agent should not agent the foreign wine similar at price, grade, quality, trait and product region.