Vinomofo boss talks international expansion and picking partners

octomedia

23rd Jun 2016

Off the back of Vinomofo’s first international sales event, Internet Retailing, spoke with Justin Dry co-founder and joint-CEO about the retailer’s international strategy. 

Last week the five-year-old business entered its first international market, running a 48-hour online-only sale in New Zealand.

Vinomofo is using a “lite” model to enter overseas markets, setting up a partnership with a local logistics provider in each market to run pop-up sales events with limited quantities of wine.

“It was all about entering the market almost in stealth mode,” Dry said of the New Zealand sale. “There wasn’t a huge marketing budget, we just wanted to build that ground swell like we did originally when we launched Vinomofo, which was really fun because it was kind of back to start-up mode.”  

The focus for Vinomofo was to provide “early adopters” with amazing customer service, including handwritten notes, without over-extending themselves.

At the end of the 48-hour sale, Vinomofo ended up with 3500 new members and more than 500 new customers.

Vinomofo will launch another similar New Zealand sales event in mid-to-late July, with a bigger marketing spend and more inventory.

“We have seen enough traction and energy around it that we will definitely be rolling out New Zealand,” Dry said.

Dry’s advice for picking a logistics provider is to have your developers take a close look at the provider’s technology.

“We have learnt you need to dig into and understand their API and how technologically developed they are, because a lot of people promise a lot of things and when you actually dig down they can’t do half of what was promised,” he said.

“I would go to three or four [providers], meet them all, discuss what’s possible and what the expectations are and get your dev team to really dig into the technology and make sure it’s actually possible. The final thing we did was talk to a lot of customers that were using the services of each of the three or four we were looking at, which is pretty standard stuff, but it’s really important.”

In April Vinomofo secured $25 million from Blue Sky Venture Capital to fund its domestic expansion, as well as entry into six international markets: New Zealand, US, UK, Singapore, Hong Kong and China.

Originally Vinomofo had intended to focus its international expansion plans exclusively on China and started building a new team and spending time in China to understand the market and meet potential partners, before reassessing its strategy.

“We were budgeting a lot of money, a lot of energy and building up a team, and we were only going to know if it really works a year and a half in,” Dry said.

“Then if it doesn’t we have to dig deep and go harder or we have try another market. If that’s the way we do it, we are going to take 30 years to get around the globe.

“So instead of going all in [spending] a couple of million bucks building teams one-by-one, we decided that we could provide a taste of Vinomofo in an event; a pop-up online sale to a whole bunch of countries in really quick succession.”

The method chosen by Vinomofo allows the online retailer to launching in six or seven countries in 12 months as opposed to one. Based on the response in each market, Vinomofo says it will follow up by establishing local teams.