AJ Nel, the man responsible for leading Cybercellar to the next chapter of its journey as it grows its national footprint. Since joining the company, Nel has already made several key changes to the business model, including updating and improving the online wine retailer’s user journey.
After spending several years working within the local wine and retail sectors, Nel relocated to Shanghai, China, with the aim of expanding his knowledge of the global wine industry, gaining international experience in one of the world’s busiest, most competitive markets. In Shanghai, AJ was appointed sales manager of East Meets West Fine Wines – one of China’s top wine distributors – where he worked with a portfolio of 60 wineries from twelve of the world’s best wine producing nations.
In a relatively short period of time, AJ was promoted to sales and marketing director for East China, where he was responsible for all on-trade, off-trade and private customer sales channels, as well as the sales strategy development and marketing across the region.
Q: What did you take away from your experience in Shanghai in terms of working in the online wine retail space?
AJN: The most important takeaway was applying proper business principals when working with wine. Incidentally, when we moved there, my wife (who was my girlfriend at the time) didn’t want to get involved in the Shangai wine industry because it was so intense, cutthroat and competitive. Over there, it’s more about the numbers than the wine, which is really tough for winemakers. From a South African perspective, the biggest lesson was realising how small a player we are on a global scale. I went to Shanghai with a mind-set of ‘Sauvignon, Chenin Blanc and Chardonnay’ when it came to white wines. Chenin is not even in the top three over there. It’s just not a grape variety that people tend to go for on the Asian market. People refer Riesling, and there’s a big focus on white blends. Shanghai is like ‘China Lite’ because it is so international.
Q: How has South Africa managed to keep up with the rapid global development of e-commerce?
AJN: There’s talk of a CAGR [compound annual growth rate] of about 30% in general e-commerce in South Africa. But that said, only 1% of total wine retail is done online. So it’s still a very tiny portion of the market. But it is growing very fast. I think the biggest challenge, as with any African country, is getting our logistics up to scratch. Again, to reflect on my experience in China, where e-commerce is huge, ordering and having merchandise delivered at home is so much easier and more convenient. There’s so many systems in place to be able to receive and process your delivery. Customers can choose their own delivery window within a space of two hours. The Chinese are even able to deliver after hours and on weekends. Over here, that’s still a big challenge: finding that point of convenience that makes shopping online so attractive. In South Africa, we’re very much still traditional. There’s still a general distrust of buying online and a slower adoption rate. Wine, as a product, is quite tangible. Consumers want to pick up the bottle, touch it, and experience it. That’s where content curation comes in for us. It’s about driving an experience around the wine in a digital way. Whether it’s content-driven mailers, or the ability to learn more about the wine on the website – that fits into our strategy going forward.
Q: What’s the key to running a successful e-commerce business in South Africa?
AJN: To be a successful business in South Africa, we have to learn from overseas players. We have to continuously innovate, and be fresh and new. Many successful businesses in South Africa have essentially copied or taken elements of models that work well overseas. It’s not quite that easy in the local wine industry. If you look at Majestic Wines, one of the biggest players in the UK market one of the biggest players in the UK, they have a network of more than 200 stores to drive the click-and-collect trend. It’s a much bigger market, so it’s easier to drive those elements faster. It’s the same with wine.com in the US. They leverage off the FedEx network which offers an incredible range across the country. We have a much smaller market and we don’t have those opportunity of scale. Achieving that level of convenience is slightly more difficult in South Africa. We have to take what works in overseas markets and adapt it to the unique challenges here in South Africa.
Q: What key changes have you made to Cybercellar’s business model since starting?
AJN: The biggest one is a project I inherited. We went live with it in January. It’s what we call the in-stock-only system – it’s an innovative stock system that only allows you to order what’s currently in our warehouse. This has brought our average national delivery time to under two days. Often in the past, an order was delayed (because of vintage change at winery or they only interrupted by weekends). Now we only show on the site (live) what stock we have for purchase. There’s always an option to contact our customer services team if you want to order more bottles. But just from an efficiency and customer service point of view, it’s made a very big difference.
The reason you shop online is for convenience. You don’t want to buy something online and wait weeks for it. We have an interesting situation in South Africa where Mondays are usually the best online sales days. People don’t trust that they would get the wine before the weekend and order in advance. But we’re starting to see the change in trends as people realise we’re getting their products to them within two days. Last month, we launched the same-day delivery system in Cape Town. Every choice and move that my team and I have made is with the customer in mind, by enhancing their journey and experience.
We’ve taken a business approach to what we’re doing. That said, it’s difficult balancing between having the right business principals and also keeping your passion for wine alive. My history and experience within the wine industry has helped me achieve this balance.
READ the full interview with AJ Nel in the next issue of WineLand Media (October 2019). Alternatively, listen to the entire PODCAST interview here: