Tontine Wines signed strategic cooperation agreement to establish a new wine retail resource sharing alliance
Apr 05, 2017

China Tontine Wines Group Limited ("Tontine Wines" or the "Group", stock code: 0389), one of the leading sweet wine producers in China, today announced that the Group has signed a strategic cooperation agreement with three leading wine and spirit merchants in China. This agreement is aimed at establishing a new model of wine retail resource sharing alliance geared to direct sales from wine producing areas to consumers. This move is expected to facilitate both the on-line and off-line sales coverage of Tontine Wines' products in China.

The wine and spirit merchants forming the strategic alliance include LeEco-controlled Beijing Wang Jiu Wang e-Commerce Company Ltd. (北京網酒網電子商務股份有限公司), Henan Jiu Bian Li Commercial Company Ltd. (河南酒便利商業股份有限公司), a member of Legend Holdings Corporation, and Heilongjiang Jiu Zhi Da Supply Management Chain Company Ltd. (黑龍江酒直達供應鏈管理有限公司)

Mr. Wang Guangyuan, the Chairman of Tontine Wines, said: "This agreement represents a new starting point for Tontine Wines' market penetration, which will facilitate the Group's nationwide expansion of its market presence. The alliance also signifies that our product quality and operating strategy are well recognized by industry leaders. Partners in the alliance are currently contemplating further cooperation, including the introduction of more of the Group's products and continuous brand promotion and launch of wine-tasting events across the country."

The above strategic agreement was signed last week at the "Tonghua Wine Producing Area Summit Conference" held during "The 96th China Food and Drinks Fair" in Chengdu, Sichuan Province. In his capacity as the Chairman of Tonghua City Wine Association, Mr. Wang led 23 delegates from the wine producing area of Tonghua, Jilin Province to attend the Summit Conference held during the Food and Drinks Fair.

Mr Wang pointed out that although Tontine Wines has commanded top quality products and management, it still requires innovative distribution channels such as specialized chain stores, e-commerce and hypermarkets to distribute its products. The Group's "Xuanniya Ice Red Grape Wine (North Ice Red 2013)" just won a gold prize in "The Eighth (2017) Asian Wine Competition" held in the middle of this month, while "Xuanniya Ice White Grape Wine (Weidaier 2012)" won the silver prize. Early this year, Tontine Wines was ranked among the "Top 100 Chinese Wine and Spirit Manufacturers 2016" organized by "China Alcoholic Drinks Industry", an industry magazine. The ranking was based on the overall competitive strengths of the wine and spirit manufacturers in China.

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One of the major deployments of the strategic cooperation will be positioning Tontine Wines' production and ancillary servicing capabilities as the core pivotal support to the cooperation initiatives, and leveraging the marketing edges of the three wine and spirit merchants to establish a new model of wine retail resource sharing alliance geared to direct sales from wine producing areas to consumers. The marketing edges of the three wine merchants include a new retail chain network covering the core cities in China and strategic e-commerce presence, well-established membership base, and extensive marketing resources.

At present, the combined membership of the three wine and spirit merchants exceeds 100 million in various parts of China, with over 10 million members having used their service to purchase wine. Moreover, these three wine merchants are planning to allow the strategic alliance to leverage their extensive distribution channels for marketing and promotion initiatives. In addition, their combined new retail chain network not only includes self-operated websites, but also mainstream e-commerce platforms in various regions of China, as well as a network of chain stores and service capabilities in cities and provinces such as Beijing, Shanghai, Guangdong, Henan, Heilongjiang, Shanxi, Shaanxi and Hebei. The development of the network of chain stores and service capabilities, which is an integral part of the alliance, has been completed.

Mr. Wang said: "All the members of the alliance have pledged to make available their quality resources and operating capabilities. In view of the rapid growth in demand for high quality products in China and against the backdrop of increasing consumption stratification, the strategic alliance will expand the Group's product range and service capabilities in the producing areas through continued interaction and communication with consumers."

Regarding the background of the members of the strategic alliance, Beijing Wang Jiu Wang e-Commerce Company Ltd. is an arm of LeEco engaging in Internet operations, with an aim to develop a vertically-integrated wine ecosystem in China. Henan Jiu Bian Li Commercial Company Ltd. is a brand name for specializing in direct sales of wine and spirit; for direct sales, it selects several hundred types of wine and spirit from around the world as well as wine wares. Heilongjiang Jiu Zhi Da Supply Management Chain Company Ltd. provides a wine and spirit-oriented information platform, offering one-stop solution for placing orders, direct sales and logistics services; it also carries out global procurement of wine, thereby simplifying the wine purchase procedures for consumers in China.

About China Tontine Wines Group Limited
China Tontine Wines Group Limited is one of the leading sweet wine producers in China. Unique taste, premium quality and top-notch operation earn the Group numerous awards. For instance, the Group's "Xuanniya Ice White Grape Wine" won the gold medal again in the "Grape Wine Quality Competition in International Leading Wine Regions"; the Group won the "Second Prize of the Innovative Achievements of the 23rd National Enterprise Management Modernization" and was ranked among "Top 100 Chinese Wine Manufacturers 2016".

The exceptional quality of Tontine Wines' products is much attributable to the Group's commitment to quality assurance and its grape supply from Ji'an city in Jilin Province, one of the few regions in the world that can cultivate the unique mountain grapes. In recent years, the Group has been dedicated to diversify its product portfolio to include low to mid-end wines to tap the mass market. The Group currently offers 137 types of wine products sold through 129 distributors in 21 provinces, 3 autonomous regions and 4 municipal cities in China. The Company's shares were listed on the Main Board of the Stock Exchange of Hong Kong Limited since November 2009.

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Issued by: China Tontine Wines Group Limited
Through: CorporateLink Limited

Media Enquiries: CorporateLink Limited

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