Claudia Masüger, a 47-year-old Swiss woman, arrived in Beijing on January 8, 2008, bearing just 12 bottles of wine. Speaking only basic Chinese, she offered tastings on the streets of Beijing and other cities, her ultimate aim to make drinking wine fun and affordable for young people. By interviewing staff members at local retailers, wine bars, hotels, import businesses and even lawyers, she learned about the local culture and built a personal network. And she quickly realised that China was a difficult market. In those days, wine was generally not seen as an affordable drink for everyone, but a prestigious gift to be given to officials and business partners, or consumed in Western-style restaurants.
Service with a smile
Fortunately, selling wine was nothing news for Ms Masüger. She was born into a Swiss family that began importing wine in 1898, when her great-grandmother Lina brought wine to Switzerland on a horse-drawn cart from Italy. The Masüger family has been involved in the wine trade ever since. Claudia’s father, Tieni Masüger, together with his brother Jürg, started the wholesale company MQ Wines in Switzerland in 2003, later represented by Claudia in China. This business came to a sudden end in November 2010 when a fire destroyed their warehouse and its 200,000 bottles. Fortunately, the damage was covered by insurance because Claudia, rather than relying on the assurances of the warehouse, had insisted on her own insurance policy, which she signed two months before the fire.
Dissatisfied with the excessive prices that retailers were charging for mediocre wines in China, she still wanted to pursue her original aim of making wine fun and affordable for young people. Starting with a Chinese business partner whom she knew from MQ Wines, Masüger opened a store in Beijing in April 2011 called CHEERS, its slogan “Cheers makes you smile”.
But how do you make people smile with wine? By offering free tastings every day, customer service from well-trained smiling staff, bright stores with red interiors, a welcoming atmosphere, and easily understandable, fruity and mostly off-dry wines at very favourable prices. The concept was new to China’s young customers. Despite the fact that CHEERS sold only wines it imported, however, they kept asking if the wines were fake. So to prove the wines came from where CHEERS said they did, the company retained copies of the import documents in each store.
Next came the Mini Wine School, a short education programme that ran each Wednesday, introduced because young Chinese customers were eager to learn about wine. The concept was an immediate hit. CHEERS became so popular that customers even proposed marriage in the stores. Within two years, it had expanded to eight stores in Beijing.
However, in 2013 the government began an anti-corruption campaign which hit sales of Western luxury goods including wine, indirectly affecting CHEERS. The market was flooded with cheap wine and copycat stores appeared overnight, luring away experienced staff. But although the copycats were a problem, they generally disappeared after a few months.
To continue expanding the business and keep the copycats out, Masüger started establishing franchise stores. The franchisees, mainly female, were and are former employees who returned to their respective home towns and opened a CHEERS store there, but who were also enthusiastic customers of CHEERS.
There were other problems ahead. One was urban development measures imposed on Beijing in 2017, which forced many shops – including CHEERS stores – to close. Existing but irrelevant regulations were applied suddenly and rigorously. To survive, CHEERS had to develop its concept and move into shopping malls, with a new interior design, offering and marketing. Roughly 100 CHEERS stores have opened since 2011; today, after the forced closures, there are 40 stores in Beijing and 20 in the rest of China.
CHEERS also has its own Taobao und JD.com online stores. But in a city where convenience is paramount and orders are expected to be delivered within 19 minutes, food delivery sites are more important. CHEERS now appears at the top of the list of suggestions in Beijing thanks to its reputation and good ratings for its wines and service.
Surviving and thriving
Looking back, Masüger considers what factors led to her success. Wines were of course important from the beginning, for her the most important factor was and still is the goal of making the customer smile and feel good when leaving a CHEERS store. To this end, the company staff is trained about wine and attentive customer service in a special training store. Many have been with the team since the beginning in 2008 or are connected to CHEERS as franchisees. “‘Cheers makes you smile’ must come from the inside out,” Masüger says. She lists the company’s core values as “love to smile, learn and grow, and rock with the team”.
There were, and still are, many difficulties in doing business in China that require clever action or simply patience. For example, Masüger wanted to register CHEERS’ head office as the 15th floor of a building in the Diplomatic Residence Compound in Beijing. Unfortunately, the registration could not be completed because the building itself was only registered as having three storeys, officials on-site told CHEERS staff. In China, it is generally difficult to know what the law is; sometimes even the responsible official doesn’t know and will answer anything, just to get rid of people. Engaging knowledgeable lawyers and having a reliable personal network are crucial.
But understanding your customers and the local culture are also important. Many young Chinese feel strong pressure to be successful, with a well-paid job, their own apartment, a car, a marriage and a child, all before the age of 25. CHEERS stores offer them a relaxing environment where they can meet friends for a glass of wine or experience a wine tasting.
Customers are sceptical and demand honesty about the business and its wines. They check labels and prices online before buying and strongly rely on peer recommendations. However, the history of the Masüger family adds to the authenticity of CHEERS. Customers can meet Claudia and occasionally her father, Tieni, in the stores and listen to Tieni’s explanations of different wines. It is the romantic family stories that touch young Chinese customers. They appreciate such moments and share them on social media channels; CHEERS uses ten channels to talk to customers about its wines and brand.
Influence on the market
The CHEERS concept plus its wines – never more than 150 SKU and priced between Rmb28.80 and Rmb1,000 ($4.30-$149) per bottle – mean the company not only benefits from wine drinking trends in Beijing, but helps to set them. Today wine from all over the world is often purchased and drunk for personal enjoyment rather than bought for gifting.
“When we ask a customer about the occasion for drinking wine, the kind of food, the age of the guests and so on and let them taste some wine,” says Mäsuger, “they usually choose in the following order: one, taste; two, occasion.” Then comes price, origin and grape variety. “It is no longer popular among young urban Chinese to drink a glass of wine gan-bei’d, meaning emptying the glass in one go,” she says.
The development of CHEERS in China has been uneven but robust, marked by countless unexpected and irritating challenges. Masüger confirms the popular wisdom that one really needs two-and-a-half times more money than budgeted to break into the market. She says that she speaks everyday Chinese but leaves negotiating to a Chinese native, although she advises keeping tight control of negotiations as a business owner.
Masüger didn’t expect the massive and fast changes in China which have forced every business owner there to react quickly. Today, however, CHEERS is positioned as a well-established, trustworthy and reliable brand and leader in the wine market in Beijing, selling a container of wine every week. After hiring a CEO, Masüger now sees her role as more of a strategic one, to develop the business, whose turnover grew by 28% in 2018, exceeding the 6.6% growth of the Chinese economy. Since Mövenpick acquired a stake in CHEERS in 2016, her aim has been to open the company to further outside investment. Her ultimate goal is to establish 888 stores in China; after all, eight is China’s lucky number.
This article first appeared in Issue 2, 2019 of Meininger's Wine Business International magazine.