Italthai expands online wine portfolio

After more than five years of slowdown in the wine business, Italthai Group is moving into e-commerce and adjusting its wine portfolio to attract younger customers.

Skon Sriwannawit (right) of Italthai and Supachai Pachariyanon, managing director of McFiva (Thailand), have teamed up to sell wines online.

Skon Sriwannawit, vice-president for marketing communications, said the company recently launched Italthaicellar.com, offering red and white wine made from various types of grapes, rose wine with a floral flagrance and popular sparkling wine.

Selling wines online will help the company to expand its customer base to reach the new generation after establishing a strong presence in Thailand for five decades.

The company hired online marketing agency McFiva (Thailand) to take care of its marketing and sales via e-commerce.

"Competition in the Thai wine market is very fierce due to many international brands expanding to tap wine drinkers here," Mr Skon said.

With the entry of new players, Italthai Group is facing difficulties selling wines via only modern trade channels, as many retailers ask for a high entrance fee to sell wines on their shelves, pushing up the costs of many wine companies.

"It's the right time to provide wines via e-commerce because of the influence of social media, while younger customers prefer to drink wine rather than whisky or beer at parties," Mr Skon said.

Italthai Group is among the oldest wine distributors in Thailand.

It offers almost 200 wines from 17 brands from France, Italy, Australia, Chile and New Zealand.

Mr Skon expects e-commerce sales will account for 10% of company sales this year, rising to 30% in the next three to five years.

By that time, wine sales via modern trade outlets are expected to hit 30%, while hotels, restaurants and catering will account for a combined 40%.

Apart from the e-commerce channel, the company has also adjusted its portfolio by adding more entry-level wines to attract the young generation.

Four or five new items will be launched by year-end to spur wine drinking during the festive season.

The price of new wines is 400-500 baht per bottle.

McFiva managing director Supachai Pachariyanon said e-commerce in Thailand continued to grow as social networks changed consumer behaviour more to online shopping.

Moreover, broadband internet penetration is improving and 4G on the horizon, he said.

These factors have resulted in a 30% growth in online purchases this year.

McFiva expects 10 million baht in sales from e-commerce wine sales this year.