These Italian entrepreneurs probably know better than most the Chinese expression "wei ji," whose equivalent in English would be "crisis", with "wei" signifying danger and "ji" signifying opportunity or change point. In ancient Chinese philosophy, every crisis offers a golden opportunity.
Alessandro Mugnano, 38, and Enrico Palmentieri, 45, from Italy, not only deeply understand this philosophy, but also put it into practice and have achieved great success in their business.
In 2012, the two founded Interprocom Cantine Divine in Shenzhen with two other Italian partners, Ivana Mugnano and Ferdinando Rizzo. The company has grown so much that it has become China's largest Italian wine importer since 2018. Despite the pandemic, the company achieved 2% growth year-on-year in 2020, and 21% in 2021. In March this year, they also opened an Italian restaurant in Shekou, which is doing well.
"I really like Chinese culture. Chinese culture teaches me a lot about strategy. Sometimes the problem is not just a problem, but also an opportunity. This is what I have taken from Chinese culture," said Palmentieri, co-founder and general manager of Interprocom Cantine Divine.
Starting a business from scratch
Alessandro Mugnano and Palmentieri came to Shenzhen some 12 years ago, originally planning to bring Chinese products to Italy. However, they ended up importing Italian wine to China, a huge market with great potential.
"It's quite a funny story, because at that time we tried to do trade, to bring some products from China to Italy. So, we came here just to look for new products, but in the end, we started to import wine. We chose Shenzhen because it’s a city that we love," Palmentieri said.
For Mugnano, co-founder and CEO of the company, Shenzhen was the first and only city in China that he has lived in. "What brought me here was the desire to spread the 'Made in Italy' brand in the Chinese market, and the desire to face some new challenges. I chose Shenzhen because in my opinion, Shenzhen is a fast-growing city, being one of the fastest in China," he told Shenzhen Daily.
They started from scratch 10 years ago. Currently, the company has its headquarters in Shenzhen, with branch offices in Guangzhou, Shanghai and Beijing. It has 54 brands and nearly 800 SKUs of Italian wines in its portfolio.
"At present we have in sole agency the greatest portfolio of Italian wine brands. We sell our products across 30 provinces in China. Guangdong is the province that we sell most in, and it was actually the province where we started distribution. We now fully cover Guangdong province, selling our products in every single city. Shenzhen's market has been developing a lot, but as of now Guangdong is still a major province in terms of wine sales. Our other main areas are Shanghai, Northeast China, Sichuan, Beijing and Guangxi," Mugnano shared.
However, the journey to success has not been easy for them. "We have met thousands of difficulties and problems. We could actually write a book about it," both interviewees said. The difficulties they encountered ranged from setting up the company, to building a team in China and overcoming the obstacles caused by the recent pandemic.
One of the main difficulties was that back then, not many Chinese people knew about Italian wine. "If we talk about 10 years ago, most of our customers didn't even know that Italy produced wine. They thought Italy was just for fashion and shopping. So, we had to start from zero, to help them understand the potential and quality of Italian wine, and that Italy is one of the biggest producers of wines in the world," Mugnano explained.
According to Palmentieri, about three years ago, white wine was not well accepted in the Chinese market, but now, the situation has changed.
"The wine we like also works well and sells well in China because we can interact with the market. You have the chance to talk with people a lot. There are multiple ways. We also do some B2C events with our partners, so you can really touch the market and understand where the market is going. Now, people appreciate white wine, orange wine, many different kinds of wine, and this means that the market is growing," Palmentieri added.
With determination and perseverance, they developed the company into the largest Italian wine importer in China by 2018, and it has remained so since.
"I still remember that in 2018 we had quite a big party here in Shenzhen to celebrate that we had imported 100 40-foot containers to China in a year for the first time. Then from 2018, every year we have achieved growth," Mugnano said.
Over the last four to five years, the Chinese wine market has changed a lot in terms of quality, and the product's average unit price has tripled compared to that of five years ago. "We have not only increased a lot in terms of sales volume, but also in terms of quality. In the last three years we have imported 180 40-foot containers annually, which is the largest number for an Italian wine company in China," Mugnano proudly said.
Business grows amid pandemic
The pandemic does not let anyone off, including Italian wine importers.
"The pandemic affects everything, including our daily social lives. At the very beginning, it was very difficult to deal with, but at the same time we, together with our team, developed a customized strategy to overcome it," Mugnano said.
Despite the pandemic, their wine business achieved a 2% growth year-on-year in 2020, and 21% in 2021.
"Behind any big crisis, there are always great opportunities. So, what we did during this time, and the reason we have achieved growth in such a difficult moment, was to keep investing, to keep doubling our efforts, and at the same time, to be the first in line to seize all of the new opportunities found in the market," Mugnano said.
During the pandemic, one of the most affected was the horeca (hotel, restaurant, café) channel. To cope with this, the company diversified their strategy and channels.
"It's true that some channels, like restaurants, were forced to close, but one of the greatest advantages in China is that we could still sell wine in many other different channels. What we developed during this time was our sister company Alawino, which focuses on online business. We are present in all the main marketplaces, then we started to develop social media channels for Italian wineries, establishing WeChat, Weibo and Little Red Book (Xiaohongshu) accounts. That’s how we made this happen in such a short time," Mugnano explained.
Palmentieri added that another key point to their success is they have invested a lot of money to teach their team how to sell. They also successfully organized a wine tasting event on June 8.
In addition to their ever-growing wine business, they have accepted an invitation from chef Diego Di Costanzo to bring to Shenzhen a three-generation Italian restaurant and opened an Italian restaurant called Il Faro in Shekou in March. The restaurant offers authentic Italian pizzas and other mouth-watering Italian food.
One funny anecdote was that the restaurant opened one day before the city was locked down for one week in March. "So, we waited for a couple of weeks and we started with online delivery and then later on, after two or three weeks, we opened for dine-in service in April. I have to say that we are very happy about the business, thanks to the support of a lot of friends and customers," Mugnano said.
Double confidence in Chinese market
When Mugnano was interviewed by Shenzhen Daily in 2019, he said that China was the future. Three years later, the Italian entrepreneur reiterates his strong confidence in the Chinese market.
"Now in 2022, I'm happy to tell you that I'm doubly confident than I was in 2019. How this country conducted the control and prevention of the pandemic while developing its economy at the same time is something that has really impressed us. A lot of countries worldwide will take years to overcome the impact of the pandemic. China did it in the fastest way and it has given us the confidence to develop and to grab all the new opportunities that this market offers," Mugnano said.
For them, the company's growth speed is the epitome of Shenzhen speed. "Shenzhen is a young and dynamic city with a fast development speed. I still remember how it was 12 years ago, which is a far cry from the Shenzhen we see today. I am so proud to have come here," Mugnano said.
For Palmentieri, Shenzhen is a city where every kind of company should want to be. "I think Shenzhen is a place where people and their ideas can really grow together. People come from everywhere, not only from China, but also overseas. We are here in Shenzhen, and we really want to stay here to grow. We really trust in the Chinese market. We really trust in Shenzhen. We really trust in China," he added.
For their future, they want to remain the top Italian wine importer in China. "Now our goal is to stay on top for many years, which is the most difficult thing. Because everybody can reach the top, but to stay on top for many years, to be stable and to lead the market for many consecutive years is difficult," Mugnano said.
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