Time to sell wine online

THE head of a local e-business solutions company believes the time is now right to sell wine online, despite the spectacular failures of similar ventures just 18 months ago.

Last week’s announcement that Eduka will develop websites and e-commerce applications for Spanish wineries in partnership with one of Spain’s largest wine sellers has given Eduka managing director Ashul Shah a positive outlook on wine e-tailing. He believes the Australian market will be ready to buy wine via the Internet in six months.

“Six or nine months from now I believe we’ll be saying ‘yes, we’ve made the right move’. Once the market comes back, I think the wine industry will soar online,” Mr Shah said.

He said that, with the benefit of hindsight, Eduka could keep development costs to a minimum.

“The biggest difference is, what would have cost $2.5 to $3 million to develop has probably cost us around $30,000 to do,” Mr Shah said.

“We’ve looked at what mistakes they’ve made. The entry level cost where you need large teams of people developing the technology is no longer an issue.”

He said the other major stumbling block – having to spend large amounts of money marketing the site – also was a non-issue. Wine seller Eno-Teca already had an established customer base of stores and wine collectors throughout Europe that were ready to use the e-commerce facility.

“Again, it’s a big difference from the models. In this case the buyers are already buying wine from Eno-Teca. They already have an established client base. We don’t have to guess who the target market is.”

The agreement to develop the websites for Eno-Teca came about after Eduka failed to secure interest in its website from WA’s major winemakers. The demonstration site’s primary function is selling wine online but it also contains general information about wine and food.

“I think we weren’t speaking with the right people here in WA,” Mr Shah said.

“Being a new company and not having a track record, people tend to shy away from the kind of technology we have to offer. But in Europe they have started to see the benefits of e-commerce and are saying they’d like to give our Australian innovation a go.”

The Spanish connection could be good news for WA wineries, especially the boutique operations in the South West and southern area of the State. Mr Shah believed the buying power and reputation of Eno-Teca could lead to little known, but premium, WA wines sold in Europe.

“If the plans work as we hope and we get a decent number of Western Australian vineyards on board, there’s no reason why we won’t see Eno-Teca buying WA wines in the same way they buy Spanish wines and sell them across Europe,” Mr Shah said.

Eduka plans to complete the English language e-commerce system in time for this Christmas. The Spanish version will be live in February 2002.

Mr Shah said all the development and integration could be carried out from Perth. They would liaise with an IT officer at Eno-Teca but it would not require Eduka staff on the ground in the Catalans region.

Mr Shah said the deal would be worth around $150,000 a year, an amount he described as significant for the 12-month old company.

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