First Taste of a New Retail Model

Signature Wine Club wants drinkers to sip, swill and subscribe

By Cameron O'Shaughnessy

Wine pairings for a prime cut of beef – no problem. But what about the perfect balance to the burning tingle of mala-filled Sichuan cuisine? Mike Signorelli and his team of wine experts at Signature Wine Club have an answer – a chilled glass of fruity Moscato – and hope this attention to the Chinese consumer's needs sets them apart from other wine retailers.

Signorelli founded Signature Wine Club in April 2014 as a subscription service that offers Chinese consumers more than a simple introduction to wine. Subscribers receive monthly deliveries of wines from a wide range of countries and varieties along with detailed notes to provide context and better educate the drinker.

The company’s subscription box business model is fairly new to the Chinese retail industry. In the US and Europe, the lifestyle-driven, retail-box subscription industry is flourishing. A company offers a curated selection of goods in a niche category, such as cosmetics, shaving products or organic snacks. The value for consumers lies in the ease, the quality of the selections and the novelty of getting a special surprise every month. According to a Forbes article, Birchbox, which specializes in cosmetics, now takes in $96 million in annual sales from its $10-a-month service.

Signorelli hopes the trend catches on in the Chinese lifestyle market.

“We listened to the market and discovered that people were very frustrated with buying wine,” Signorelli said. “Our service eliminates pain and saves time by choosing the product, guaranteeing the quality and delivering it right to your door.”

From lush to laoshi

To satiate both veterans and newcomers to the industry of vineyards and zymology (the science of wine fermentation), Signorelli partnered with one of Beijing's leading wine educators, Fongyee Walker, the Director of Dragon Phoenix Wine Consulting.

Once a month, the six-member team of Signature Wine Club converges in its 200-square-meter Beijing office to select, taste and critique wines. This handpicking process yields the three bottles that will then be sent to members, along with a full breakdown of each bottle. These descriptions – in both English and Chinese – include information on the type of wine, its origins, the history of the vineyard and wine pairings with Western and traditional Chinese dishes.

Members really want to learn about the wine as they try them and have an expert help them out, “a laoshi so to speak,” Signorelli said.

"We want local people to understand that there is wonderful wine out there, all different kinds, at very reasonable prices," he said. Prices at Signature Wine Club run RMB 299 for two bottles a month and RMB 449 for three bottles, offered in three-, six- and 12-month subscription packages.  

The company has experienced a sharp increase in local interest as native Chinese membership has increased from 10 percent to 40 percent of the customer base. Nationally, bottled wine imports grew 3.24 percent in 2014 according to the China Wine Import Data Monitoring Annual Report. This indicates a rebound in domestic interest after government austerity measures and declining consumer confidence slowed growth in 2013.

Market barriers for subscription model

In the US, subscription service companies have thrived thanks to the boom of e-commerce and the ease of automated, monthly credit card payment plans that allow users to opt out at any time. Chinese banks have not yet adjusted to allow subscription billing plans, forcing customers to commit to yearlong subscriptions. The all-at-once price tag often scares away potential members, Signorelli said.

He's worked to counter this setback by offering members full refunds if they wish to end their commitment early. Additionally, the company cooperated with PayPal to create a scheduled payment plan. Signorelli is hopeful that the rapid rise of mobile payment platforms such as UnionPay, AliPay and WeChat Wallet will lead to more innovation in monthly subscription payments in China.

Raising a glass to APSA

For any AmCham China members that subscribe to the service, Signature Wine Club will donate 10 percent of the subscription fee to the nonprofit Americans Promoting Study Abroad (APSA). A 100,000 Strong Foundation partner, APSA brings public high school students to Beijing on full scholarships. When here, students focus on language acquisition, cultural and community engagement, and career and leadership development. To learn more, go to sigwine.com/amcham.