Wine, women and the In­ter­net

An acute sense of dis­cern­ing con­sumers

Finweek English Edition - - Business Strategy - Les­lie Maliepaard CHIMWEMWE MWANZA

E-SHOP­PING MAY BE OLD HAT for well­heeled, dis­cern­ing con­sumers with bucket loads of credit and an in­sa­tiable ap­petite for exclusive ac­qui­si­tions. So where does that leave bud­ding en­trepreneurs with an eye on po­ten­tial busi­ness op­por­tu­ni­ties? The trick from an en­tre­pre­neur’s point of view is to find a niche in what’s a global shop­ping mall where ev­ery­thing from mo­tor ve­hi­cles to food is on of­fer, says Les­lie Maliepaard, ex­ec­u­tive di­rec­tor and MD of on­line wine sell­ing por­tal www.wineweb.co.za.

That’s not just busi­ness bab­ble. Maliepaard is liv­ing tes­ti­mony to her coun­sel. She says her choice of prod­uct was fairly ob­vi­ous: wine is an ex­pe­ri­en­tial lux­ury. “You can de­ter­mine peo­ple’s sta­tus and life­style by merely looking at the wine they drink. In fact, growth in con­sumer con­sump­tion in many coun­tries is a mea­sure of the state of the econ­omy.”

The prod­uct and mar­ket were a per­fect fit. In­deed, if Maliepaard’s as­ser­tion is true then it’s safe to at­tribute the growth of South Africa’s wine in­dus­try to its bur­geon­ing black mid­dle class. Un­sur­pris­ingly, busi­nesses that had strate­gi­cally po­si­tioned them­selves to cash in on the grow­ing black mid­dle class are reap­ing the ben­e­fits of wine e-tail­ing. Google “wine e-shop­ping” and you’ll see a plethora of web­sites and e-tail­ers ply­ing a grow­ing e-liquor trade. “It’s sim­ple,” says Maliepaard. “Web­sites of the older wine e-tail­ers dom­i­nate most search en­gines, giv­ing them an edge over start-ups.”

So where does that leave en­trants such as WineWeb that only broke into the in­dus­try about four years ago? “The shift­ing dy­nam­ics of SA’s eco­nomic land­scape – which’s seen more black peo­ple swelling the ranks of higher in­come earn­ers – and its stand­ing as the world’s sixth largest wine pro­ducer (al­most 2,8% of pro­duc­tion world­wide) are op­por­tu­ni­ties for new en­trants,” says 33-year-old Pre­to­ria-born Maliepaard.

Hav­ing spent time in the fi­nan­cial ser­vices sec­tor – with stints first as fi­nan­cial man­ager and busi­ness an­a­lyst at For­ward­slash and Mer­cantrade – be­fore mov­ing on to head pub­lish­ing house Quo­rum Con­sult­ing, Maliepaard hardly had any ex­po­sure to the wine in­dus­try prior to launch­ing WineWeb.

A self-con­fessed techno-geek, Maliepaard used a com­bi­na­tion of her busi­ness skills and, with part­ner Jonathan Maliepaard’s ex­per­tise in web ar­chi­tec­ture and IT skills, de­vel­oped one of SA’s largest on­line wine por­tals. How­ever, rais­ing seed cap­i­tal proved a ma­jor chal­lenge. “I pro­vided that from my own sav­ings, which ex­plains why our prospects have been some­what con­strained.”

Such was the creative im­pact of the web­site that in just un­der 15 months it reg­is­tered 2,7m hits. Based on the amount of traf­fic to the site, WineWeb claims a 15% mar­ket share of SA’s e-liquor trade. As part of her strat­egy to dif­fer­en­ti­ate her ser­vice in the on­line mar­ket, she then tar­geted a very spe­cific niche mar­ket with a pen­chant for a va­ri­ety of top French Cham­pagne and SA’s Cap Clas­sique.

“Prior to launch­ing WineWeb we saw a huge gap in French Cham­pagne and Cap Clas­sique. Al­though we sell a wide range of wines, those two prod­ucts are our big­gest driv­ers of group rev­enue.”

The suc­cess was spec­tac­u­lar: so much so that an over­whelm­ing de­mand for the two prod­ucts saw WineWeb re­cently launch an exclusive on­line shop­ping por­tal solely ded­i­cated to sell­ing French Cham­pagne and Cap Clas­sique.

“We’re see­ing an in­crease in traf­fic among women buy­ing Cham­pagne and Cap Clas­sique, so our new web­site will be geared more to­ward our fe­male con­sumers as we’ve iden­ti­fied a gap in that mar­ket.”

“You can’t ig­nore the spending prow­ess of the emerg­ing black mid­dle class,” she says. “Most wine re­tail­ers are now tak­ing their stock to town­ships. Un­like in the past, we now have the an­nual Soweto wine fes­ti­val,” says Maliepaard.

WineWeb has also en­tered the in­ter­na­tional mar­ket, which cur­rently ac­counts for around 20% of group rev­enue. Al­though de­clin­ing to dis­close WineWeb’s turnover, she’s very comfortable with its fi­nan­cial po­si­tion. Its re­mark­able growth was recog­nised by the Cen­tre for Women and In­for­ma­tion Tech­nol­ogy last year by award­ing Maliepaard a schol­ar­ship to Mary­land in the US for a three-week “Women in ICT” en­trepreneur­ship pro­gramme.

Rais­ing seed cap­i­tal proved a ma­jor chal­lenge.

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