Wine Importer Increasing Directly Operated Stores... "Enhancing Profitability"

Expansion of Directly Managed Retail Stores to Improve Profitability of Major Wine Importers
Also Serving as Showrooms... Trend of Increasing Direct Stores to Continue
Importer-Specific Differentiated Services to Enhance Visit Incentives

The top five domestic wine importers are expanding their directly operated retail stores to improve profitability. Directly operated stores can increase profit margins through direct sales and facilitate inventory management based on stable sales channels. Additionally, they serve as showrooms where the importers can showcase their product lines at a glance, so the trend of expanding directly operated stores among importers is expected to continue for the time being.

Shinsegae L&B 'Wine & More'

According to the liquor industry on the 15th, Kumyang International opened its second directly operated store, ‘Wine Spot,’ in Euljiro, Seoul, on the 27th of last month. This came five months after opening the first store in Sangam-dong in November last year. Kumyang International is expected to open two to three more stores, including a third store, within this year. Shinsegae L&B’s ‘Wine & More,’ a representative directly operated store run by a domestic wine importer, also opened its Gyodae branch in the same month. It is the 10th store in the Gangnam area of Seoul. Wine & More started with the Hannam branch in 2016, then expanded to 10 stores the following year, 31 stores in 2019, and 45 stores in 2021. As of April, it operates 47 stores nationwide.

In addition, Ayang FBC operates eight ‘Wine Nara’ stores, including the recently opened Hongdae branch, while Nara Cellar runs five premium wine shops under the name ‘Wine Time,’ four wine outlets called ‘Wine Fix,’ and three ‘Haru Ilgwa’ restaurants with a wine shop & bar concept. Lotte Chilsung Beverage has also expanded its directly operated stores called ‘Obinomio,’ which feature a wine complex space, to three locations since last year.

The reason wine importers are expanding their directly operated retail stores is primarily to increase profitability. Operating their own sales channels allows them to sell products at desired prices, making margin adjustments easier. Since they use their own logistics centers, they can supply products quickly and maintain turnover. Moreover, stable sales channels enable them to maintain purchasing power for various products and facilitate inventory management, such as clearing discontinued wines.

Another attractive aspect for importers is that they can directly curate their imported wine portfolios. Since directly operated stores are channels operated with direct authority from the company, they can quickly introduce product assortments that align with trends, maintain consistent store concepts, and implement marketing policies. Additionally, direct communication with customers allows them to understand customer preferences and serve as a testbed for new wines.

Geumyang International 'Wine Spot'

With concerns about an economic downturn, the overall liquor market, including wine, is showing signs of slowing down, so the trend of expanding directly operated stores that can contribute to improving profitability for wine importers is expected to continue. However, since the wine market has somewhat contracted after the endemic phase, the industry consensus is that the direction for operating directly operated stores will focus on selective new store openings based on thorough commercial area analysis and improving the efficiency of existing stores rather than indiscriminate expansion. An industry insider said, “We plan to continuously revamp stores by renewing store layouts to fit the surrounding commercial areas, boldly reducing underperforming categories based on sales analysis, and expanding popular other alcoholic beverages.”

As the number of directly operated stores increases, importers are also making efforts to prepare differentiated services to attract visitors. Shinsegae L&B plans to expand the lineup of Wine & More exclusive products from about 40 types from six countries to 60 types by the end of the year and operate stores by segmenting store types according to regional commercial area analysis. Ayang FBC also plans to tailor store layouts and sales strategies according to customer demographics at each branch, such as operating an aroma zone where customers can experience aroma kits at the Hongdae branch.

Nara Cellar, preparing for an initial public offering (IPO), plans to operate its stores as cultural spaces for enjoying wine by providing wine education, purchase consulting, personal wine list management, and storage services. On the other hand, Kumyang International plans to develop its stores as a ‘daily wine channel’ with affordable prices under the ‘convenience bottle shop’ concept, allowing customers to visit and purchase as easily as at a convenience store.

Ayoung FBC 'Winenara'

This content was produced with the assistance of AI translation services.