• TheLINK on WeChat

    Look what you’ve been missing!

    569
  • CEIBS Alumni

    Join the largest, most influential b-school network in China: over 19,000 business leaders, and growing.

     

    569

wine9.com Founder Zhang Huijun: Profiting from E-commerce

Volume 1, 2013

With nearly RMB 300 million in revenue last year, wine9.com is said to be one of the few profitable e-commerce enterprises in China. It was established in 2010 by Zhang Huijun, a former employee of technology giant Huawei. Last year Zhang, who is constantly looking for new ways to keep his company successful, was one of the participants in CEIBS 1st China Entrepreneurial Leadership Camp. His company has also been selected to receive second stage financing from the HGI FINAVES China Fund, a collaboration between CEIBS and HGI Capital dedicated to backing innovative, high-growth business ventures.

The early days

Zhang joined Huawei Technologies in 1998 and within 11 years his various roles there included manager of the software department and head of sales for the branch in Europe.

He was assigned to the European Branch in 2004 and during his six years there successfully landed deals with major telecommunications operators. He also learned a lot about local customs and the wine culture which made him realize that, with wine selling at exorbitant prices in China, there was a potential business opportunity to be explored. After careful thought and thorough preparation he resigned from Huawei, returned to China and launched wine9.com in 2010. His goal: to use e-commerce channels to sell overseas wines directly to domestic clients. His career at Huawei had provided a solid technical base and rich commercial business experience, which became his unique competitive advantage in the e-commerce industry’s wine niche.

Initially, Zhang’s revenue was merely the difference between the sale prices in Europe and China. Gradually, he began to strengthen integration among the overseas chateaux with which he did business, enhance the product brand, and tried combining his offline business with existing online operations.

Today, wine9.com has 4 million registered users online and 80 offline franchisees.

Involvement with CEIBS

Fully aware of the challenges ahead as he tries to grow his business, Zhang saw the CEIBS China Entrepreneurial Leadership Camp as a way to breathe new life into his company. The Camp provided valuable opportunities to learn from the school's knowledgeable professors, successful entrepreneurs from CEIBS’ alumni network and his peers. It also improved his ability to plan company strategy and effectively lead his employees.

These lessons are complemented by the capital injection received from the HGI FINAVES China Fund, which also provides a full range of value-added services – such as strategic planning, marketing and team building – to help wine9.com strengthen its core operations and enhance its competitiveness.

Ready to compete

Zhang is optimistic about the future of the wine industry in China. and predicts that the market will grow to RMB 180 to 200 billion per year. With offline retailing still currently dominating sales channels, he is confident that online wine retailing has huge growth potential. 

With more than 200 European chateaux supplying him with products and a superior e-commerce operating platform, including an ERP (Enterprise Resource Planning) system which is constantly being optimized, he believes he will be able to compete effectively enough to grab this market opportunity.

“Right now our biggest challenge is to expand and make a profit in the short-term,” Zhang explains. He has decided, based on intensive market analysis and industry trends, to enhance his company’s ability to maximise offline channels. He is also planning to launch a B2B side of the business and expand his offerings to include white wine.

Fully recharged from the CEIBS China Entrepreneurial Leadership Camp and encouraged by the support received from HGI FINAVES, CEIBS professors and alumni, Zhang is confident that there is a bright future ahead for his company. 

HGI FINAVES Tips

The essence of e-commerce is COMMERCE; the goal is to provide competitive and differentiated products and services for your clients. This is the only way to survive. There has to be a thorough understanding of commerce, brand promotion and how to maximize the internet to gain users.

In today’s tough market environment, the following factors are crucial for the survival of e-commerce companies with a vertical structure:

1) The segment markets they select should have a high gross profit, such as the wine market wine9.com dabbles in;

2) Gaining users should be relatively low cost but highly efficient, and should include deep, on-going collaboration with third-party platforms;

3) They should focus on building their own brand, as well as vertical integration in industrial chains (such as the close collaboration between wine9.com and upstream chateaux).