California Grapes Goes Online With CA Wine Publ

California Grapes Goes Online With CA Wine

Published August 24, 2012

Hello,

“CGI” has continued to build on its “Wine Club” in Beijing through little more than “word of mouth”. The club now has 333 unique members subscribed and with the recent events at the store, we are expecting to see this number grow substantially. We have been evaluating the position of having our own e-commerce web site or partnering with an online wine retailer in order to service our member purchases and market to new customers once they have been to the retail shop.

We believe we have come up with the best scenario for our members and new customers by focusing our communications with the “Wine Club” members on news and information regarding promotional events and special offers that will be available at our retail location. We will drive traffic into the store as often as possible which will allow us to maintain a high level of interaction with our customers. The retail location is the key component in providing the foundation of the California Wine education that is typically missing in the international wine sales efforts.

The company is moving forward with two online wine sales channels that offer very diverse advantages for “CGI” and our club members. The online business-to-consumer web sales for China grew to $124.2 billion dollars in 2011. This represents a 53.7% increase from 2010 and in 2013 China is expected to surpass the U.S. as the world’s largest online retail market.

http://www.internetretailer.com/2012/07/05/ch...uit-growth

“CGI” is starting off with the 3rd largest online retailer in China. Amazon China has provided approval for the California Grapes International, Inc. online store and unlike a vendor relationship here in the U.S., each SKU must go through a governmental approval before it can be made available. We have submitted over 100 wines for initial approval and we are bringing the largest California Wine offering online under our own “CGI” Storefront. The agreement is very simple in that they receive a straight commission on all sales and we set our own pricing and manage all of the logistics and fulfillment. The additional benefit here is that Amazon China also becomes a customer of a few selected SKUs that they will purchase directly from “CGI” and manage all sales pricing, logistics and fulfillment with directly. This is a great entry point for “CGI” and there are some very strategic projects with Amazon China being discussed for the coming months that we are very excited about. http://www.amazon.cn/b/qid=1345759049?ie=UTF8...XMASSNH9DH

The second online sales channel is a smaller company that is focused exclusively on wine sales online. “TasteV” http://tastev.com/index.php?main_page=login has a very unique approach to wine sales through Social Media. They promote a member feedback and social networking base for driving sales. As a customer of “CGI”, we are looking into the possible opportunity to provide a forum for their social tasting events at our retail location. With close to 100,000 fans on Weibo (the equivalent of Facebook and Twitter combined in China with approximately 200M users today) and over 2000 club member so far, the wines being offered from “CGI” will have an opportunity to have a specialized forum with the Beijing wine enthusiast/consumer for feedback and reviews.

The online sales business in China is significant and with the ability to come and physically taste, touch and see the CA wine selection available from “CGI”, it will give us a tremendous platform for exposure to the emerging wine consuming market while satisfying our “Wine Club” member purchases.

We would like to “thank you all” for your support and the positive feedback we have received is much appreciated.

Sincere regards,

California Grapes International, Inc.