It has been less than a year Since Wajiu Group, the 10-year-old B2B cross border wine company, shocked the wine industry by acquiring two of China’s biggest wine importers – Summergate Fine Wines & Spirits and Torres China. With the landmark move, Wajiu vaulted from relative obscurity to the center of the wine world’s stage, leaving a trail of baffled competitors, wineries and industry veterans wondering aloud, “Who exactly is Wajiu?”
Dan Siebers, a seasoned wine merchant who’s navigated China’s complex markets since 2000 with 10 years of experiences in Summergate and later with other major importers, now pilots the turbo-charged Summergate and Torres China under Wajiu’s expansive umbrella.
Serving as Co-partner of Wajiu Group China, which overseas Summergate, Torres China, B2B trading platform Wajiu.com and Summergate Fine Wine (open market fine wine trading), he described the first few years of Wajiu’s growth as “rapid but quiet,” a stealthy ascent unbeknownst to the flashy world of branded wines.
“The big swing”, as he says, came when it made the high-profile acquisition of the two big importers.
For years, Wajiu was flying under the radar for the country’s fine wine importers and brand operators even though by 2017 it was ranked as the country’s biggest wine importer by volume. “In the world of branded wines and premium but low-volume distribution, they were never a competitor. You just didn’t hear about them,” he recalled.
Yet, key suppliers were in the know. Companies like Gérard Bertrand and Villa Maria were well aware of Wajiu. “Wajiu was probably happy to keep it quiet so their competition wouldn’t know about them either,” he said with a wry smile in his voice.
The acquisition significantly altered the dynamics of China’s imported wine sector, heralding what some media heralded as the end of “Western domination of Chinese wine imports.” Reflecting on the shift, Siebers remarked: “It is long overdue for key players in the Chinese market to be Chinese-owned. Just as we don’t see Western-owned importers dominating the Japanese market or German and US-owned importers leading the Australian market, it’s crucial that major importers and distributors in China are locally owned. In China, Chinese companies are inherently more effective and efficient at navigating the complexities of the market than outsiders.”
“It is long overdue for key players in the Chinese market to be Chinese-owned. Just as we don’t see Western-owned importers dominating the Japanese market or German and US-owned importers leading the Australian market, it’s crucial that major importers and distributors in China are locally owned. In China, Chinese companies are inherently more effective and efficient at navigating the complexities of the market than outsiders.”
Dan Siebers
Today, Wajiu no longer flying under the radar is constantly watched and speculated about. The level of interest and attention on the company was like a lightning bolt to an industry that had been in a deep freeze for three years due to the pandemic. “Now every other day, there’s another rumor about Wajiu. ‘Who is it gonna buy now?’,” he says with a mix of exasperation and amusement. “No, we are not!”
Overcoming the ‘Hidden Cancer’
Since 2014, the Beijing-based company has built its business by serving small distributors low cost but high-quality wines on their closed B2B platform. Today Wajiu Group is structured into three main divisions, Wajiu China, Wajiu Service and Wajiu International, combining global wine trade, supply chain management, domestic warehousing and distribution, as well as brand marketing and promotions.
Initially, the merger with Summergate and Torres seemed like a marriage of misfits. However, Siebers argued that these additions brought synergy to the company.
For one, Wajiu’s existing logistics and supply chain management under Wajiu Service significantly reduced logistics costs for Summergate and Torres.
Leveraging what Siebers calls Wajiu’s “secret weapon”—its vast logistics network—he watched as logistical costs went down by 35% while service doubled.
He described the high logistics costs as “the hidden cancer” of the wine industry. “People think this is a sales and marketing game, but it’s really a cash flow and logistics game. If you don’t nail your cash flow and logistics, it doesn’t matter how good you are at sales and marketing,” he said with conviction.
In terms of profile, Summergate and Torres filled the fine wine void that was previously missing in Wajiu China’s offerings. “For example, our wholesale B2B platform focuses on the broader market with less expensive, non-famous brands, and Summergate Fine Wine, focusing on open market trading,” he explains. “Our business units remain independent but synergize perfectly, covering all market needs without competition.”
The merger, which integrates the portfolios of two of the country’s top fine wine importers, now positions Wajiu as a dominant force in the premium on-trade sector. It now distributes to more than 50% of the Michelin-starred and Black Pearl restaurants, according to the company executive. “This is even more remarkable considering that a significant percentage of these restaurants do not offer wine, or only a very limited selection,” he enthused.
Siebers delves further into Wajiu’s distinct strategy that sets it apart from its competitors. Wajiu distinguishes itself by offering a comprehensive range of wine from premium to OEMs, and employs a nationwide distribution strategy that covers over 400 cities.
“While all other companies approach the market from one target market (open market, premium brands, or inexpensive unknown brands) or one geography single city or province), Wajiu Group is the only player to cover the entire nation with direct distribution to over 400 cities, at both the top middle and bottom of the market, and all channels,” he explains.
Summergate and Torres, now merged, continue to operate as an independent business unit within Wajiu Group. This arrangement allows them to access a broader market through the group’s diversified business units. It offers the best of both worlds: maintaining their independence while enjoying the benefits of being part of a much larger organization.
The 10,000 Princes
A wholesaler, for instance, looking to fill his portfolio then can buy from all the divisions under Wajiu banner. Continuing, his tone intensifies, “And let’s be clear, the actual China market is not the ASC, Summergate, Torres, or EMW world. The actual Chinese market is the 10,000-strong regional wholesalers that really have intense direct control of all the distribution.”
“And let’s be clear, the actual China market is not the ASC, Summergate, Torres, or EMW world. The actual Chinese market is the 10,000-strong regional wholesalers that really have intense direct control of all the distribution.”
Dan Siebers
These regional wholesalers, whom he dubs the “10,000 princes” or “mini kings,” are the de facto rulers of China’s wine distribution landscape. Each one reigns supreme in their territories but is limited in their ability to scale and import directly.
“They need various types of wines: open market, inexpensive OEMs, sparkling wines, and famous brands. Wajiu meets these needs with its diverse offerings,” he notes.The strength of Wajiu’s synergy among its different divisions became especially apparent during market downturns. “Wajiu’s diverse offerings help us stay resilient. Their wines, for instance, offer great value for money. This reputation for quality helps us maintain high sales and customer satisfaction,” Siebers adds.
“People often say, ‘oh, they just sell cheap wine’,” repeating a jab that many hurled at Wajiu. “Well, if they just sold cheap, bad wine, do you really think they would have reached this a scale large enough to purchase 2 of the 3 most prestigious importers?” He asks rhetorically.
Largest Wine Distributor in Asia
Having now surged to the top and merged two of China’s biggest wine importers, to call Wajiu Group a disruptive actor in the wine industry seems fitting. But when asked Siebers remains ambivalent. “Innovative? Yes,” he said approvingly, “but disruptive? I don’t know,” He muses before quickly adding, “but then again I struggled to think of anyone doing something different.”
One thing for sure as our conversation goes is Wajiu’s ambition is far beyond China.
He outlines the strategic intent behind future capitalization plans. “The key focus of our investment is to expand Wajiu International. Wajiu International is an extremely successful bulk wine trader and producer of wines, with separate companies based in both Adelaide and Bordeaux. The plan would be to set up distribution networks like Wajiu, Summergate, and Torres across all of Asia. This can’t be done organically; it requires a significant injection of capital to get started. Wajiu isn’t just looking at China; it’s looking at all of Asia.”
“We’re really just looking for a capital boost to help us grow. Certainly, this isn’t a time to cash out; quite the opposite, actually. It’s far too early to consider reaping the rewards of growth—we’re just scratching the surface of where we want to be.”
