As part of its international expansion strategy, Vinomofo has chosen New Zealand as the destination for its first international sales event.
The event will run for two days over June 16th and 17th, or until sold out. And for Vinomofo, it’s all about the experience — the customer experience and the experience in the new market.
The sales event is part of Vinomofo’s international market testing strategy. This strategy involves testing a range of markets — including New Zealand, Singapore, the US, the UK, Hong Kong and China — with limited sales events. From these events, the team will gain insights into the various local markets. The company will then examine the insights and traction from the events to determine which markets are right for a full-scale expansion.
While co-founder and joint-CEO, Justin Dry, had previously signalled either China or Hong Kong, New Zealand emerged as the logical choice for the first event due to the ease of entry into that market.
“Liquor licensing and other laws were easier to negotiate in New Zealand,” Dry told Power Retail.
“Selling into New Zealand proved easiest as it’s similar to the Australian market. The wine mix is similar and they already buy a lot of the wines we’ll be selling into that market.”
Despite recently securing $25 million in capital, Vinomofo is keeping these sales events small, limiting them to just 5,000 members.
“We don’t want to make it too big and run the risk of not being able to deliver,” said Dry.
“Our focus is on getting the experience right. It’s crucial to have the experience amazing for people who are having their first interaction with the brand, because first impressions are really powerful.”
This limited release also creates a sense of exclusivity for the members. The first 5,000 New Zealand members will become “foundation members”, giving them priority access to future deals and sales.
Vinomofo’s strategy for approaching foreign markets sees it going back to its roots, mirroring the strategy it initially used to launch in Australia. The company has restricted its marketing budget in New Zealand, instead focusing on word of mouth, and delivering a great experience to a small foundation base, rather than chasing mass customer acquisition from the outset.
This strategy will be carried through to the other markets. After, New Zealand, Singapore has been lined up for the next Vinomofo event, followed by the US.
Challenges across markets
The move to approach New Zealand first is part of an ease-of-entry strategy. The similarity to the Australian market means Vinomofo can enter the New Zealand market quickly and confidently, and take what it learns to the subsequent market tests.
And each market is different.
“Some of the markets we’re going into are highly competitive, while others are wide open for disruption,” said Dry.
“Hong Kong and the US are very competitive, but the market opportunity in the US is so big, it makes it worthwhile.”
Dry points out other challenges across markets including differing licensing laws around importing, selling and delivering alcohol, and difficulties negotiating payment gateways for foreign currencies.
New Zealand’s similar wine market also made it easier for Vinomofo to approach that region. Other regions will require a more specifically tailored wine mix to successfully sell into those markets.
“For places like Singapore and Hong Kong, the wine mixes will obviously be very international since they don’t have their own wine industries. So they will require a more diverse range of wines from around the world,” said Dry.
While Singapore and the US have been lined up for the next events, no concrete dates have been set.
“Is it more important to stick to a particular date, or is it more important to get the experience right?” Dry asks.