WineDirect Roadshow: Napa Valley DTC China

Adam Ivor Co—Founder & Director of Operations

Gliding Eagle Inc. April 21st, 2016

What will be discussed:

1. The Chinese Consumer

2. The Case for DTC

3. Logistics

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So, why am I here today?

31 Years in Napa and Sonoma

Winemaker, Highway 12 Vineyards & Winery

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This is new, and this is HARD.

So, why am I here today?

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$100 Retail in Tasting Room Example:

WineryF.O.B. $50

Consumer in China

$300

Traditional Dist. Model

Extremely Fragmented & Murky

So, why am I here today?

Lack of DIRECT access to the largest market in the world

outside of the U.S.

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1

The Chinese Consumer

Visiting California, Culture and Tendencies

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California Tourism

According to Visit California, the state saw over 1 million Chinese visitors in 2014 who collectively spent $2.5 billion in the Golden State.

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California Tourism

V.C. projects that 2 million Chinese tourists will visit California by 2018.

New 10 year visa policy is a major driver for increased visitation.

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California Tourism

The California Travel and Tourism Commission states that Chinese consumers spend on

average $6,000 per person during a trip.

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The Average Chinese Wine Consumer

Overall a very skeptical consumer base

May sometimes make lofty statements (negotiations)

Highly motivated by personal recommendations (safe choice)

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The Average Chinese Wine Consumer

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Will seek a discount or bargain

Faces mis-information in the marketplace

Is greatly concerned with authenticity

Tendencies & Trends

TechCrunch.com states that there will be 6.1 billion smartphones by 2020

Currently 697 million active users on WeChat

Price Transparency, Authenticity & Safety

Direct from the winery = No Middlemen

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2

Direct-To-Consumer - Why Do It?

The Benefits & Opportunities

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The Benefits of DTC

30-50% Greater MarginsPayment Immediately

Reduced Inventory in ChinaDevelop Customer Database

Targeted Marketing

Reduce Opportunity Loss

Complement Distribution Efforts

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Order Metrics

Average order size = 3-4 cases

Average order value = $30 - $2,200 per bottle

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Average delivery time = 18 Days

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DTC Logistics

Payment Options, Packaging, Import & Export Paperwork, Customs Clearance, Express Delivery in China, Customer Service

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Payment Platforms

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Shipping & Delivery

Packaging is critical!

Export Paperwork

Import Paperwork

Customs Clearance Broker

Express Delivery in China

Parcel Insurance

Customer Service

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4

Marketing

Great Firewall of China, Your digital brand equity? Social media presence? Mobile, Pricing Model

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美国加州翔鹰公司

们 红

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Winery Logo here

Half-Case (Duties/Taxes/Shipping & Insurance included)

Full-Case (Duties/Taxes/Shipping & Insurance included)

$1,230 $205/btl

*1.37

$2,280 $190/btl

*1.27

$1,095 $183/btl

$2,040 $170/btl

10% off 20% off

2012 Generations Cabernet Sauvignon 750 mL

$125

2012 Red Room Red 750 mL

$150

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Single Price Example

Your Brand in China

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Do you have a trademark, brand protection?

What is your digital brand presence?

Mobile/Social Media optimized?

Great Firewall of China

Baidu.com (Google) Yesmywine.com (Wine.com)

wine-world.com (wineseacher.com)winekee.com (wine.com)

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Mobile Based Brand Marketing We built a beautiful mobile app connecting authentic, premium American wineries with Chinese consumers. It is optimized for searching by Chinese users, and sharing on WeChat social media.

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WHAT’S NEXT?

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eCommerce Sales

Payment Processing, FX, Translation, Hosting, Re-Purchasability

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Re-Purchase Ability

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Wine Club

This is 2016 we should be able to do this!

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Contact Gliding Eagle

Web: eagl.co/wine Email: Adam Ivor, Co-Founder & Director of Operations

aivor@gliding-eagle.com Phone: 707-815-3155 Office: 120 Tower Road #1, American Canyon, CA 94503

Thank You

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