2024
On behalf of the Board of Grace Wine, I would like to present the Company’s annual report for the year ended 31December 2024.
In 2024, our revenue declined to RMB34.6 million from RMB65.0 million in 2023, with bottle sales decreasing from 738,000 to around 438,000 units. This downturn reflects the broader challenges within China’s wine industry, where consumption has been on a downward trend since 2018. The overall market environment remains difficult, and we anticipate that these challenges will persist for the next three to five years.
China’s economic landscape in 2024 has been marked by deflationary pressures, cautious consumer spending, and a slower-than-expected recovery in discretionary spending. While the government has set a gross domestic product (GDP) growth target of around 5% for 2025, the road to economic stability remains uncertain. These factors have directly impacted the premium wine segment, requiring businesses to adapt swiftly.
Although it is unlikely that we will return to our 2021 sales levels in the near future, we remain confident that, through strategic adjustments, we can achieve profitability. Our key focus areas include:
1. Operational efficiency and cost management – We are restructuring our operations to align with our current sales scale, implementing cost-saving measures and enhancing efficiency across all levels.
2. Targeted marketing – Rather than appealing to a broad audience, we are sharpening our focus on core consumers who appreciate premium wine, ensuring a more effective allocation of resources.
3. Industry collaborations – To expand brand awareness, we are engaging in cross-industry collaborations. A recent example is our partnership with Imaginist Publishing House in China and its retail arm, Naive, on the special wine project “Bottle of a Year.” We expect these partnerships will allow us to reach new audiences and reinforce our brands’ positioning.
4. Export growth – We have also made steady progress in expanding our export market. In 2024, our export sales to Hong Kong increased to 1,066,000 units, compared to 985,000 units in 2023. This reflects our ongoing efforts to expand the global footprint of the Company and build stronger relationships with international distributors.
We are delighted to share that our Cabernet Franc is now being served in Cathay Pacific’s Business Class, and our Marselan will be added soon. This partnership highlights the growing recognition of our wines and reflects the quality and craftsmanship that we stand for.
Despite market difficulties, we have made the strategic decision to renovate our winery, using minimal investment to maximize impact. The last major renovation took place in 2012, and we recognise the need to elevate the visitor experience to match our brand standards. More importantly, our winery is the closest to a major city in China, and while Taiyuan is not Beijing or Shanghai, it still has a significant population base of approximately 5.3 million people. A refreshed and engaging winery experience will strengthen our direct consumer relationships and enhance brand loyalty.
We deeply appreciate our shareholders’ support, particularly in approving the disposal of our distillery. This move significantly reduces our cash burden, allowing us to focus on our core winery business while improving financial stability. While challenges remain, we are confident that our commitment to quality, operational efficiency, and strategic collaborations will enable us to navigate this evolving market successfully.
Cheers!