Wine, women and the Internet
An acute sense of discerning consumers
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.