Observers of the Chinese wine market may be sorry to learn that 36-year-old, leading influencer, Lady Penguin — Wang Shenghan — is dramatically scaling down her operations and stepping back from them.
Anywhere else, this kind of news would barely warrant inclusion in the media, but Lady Penguin has been much more than an influencer. She has been an ‘influencer brand’ with 3.33m followers on Douyin (China’s TikTok) and close to 1.5m on Weibo – WeChat. She is also the person behind the Lady Penguin retail channel which, in 2020, according to local 36Kr media, sold nearly 2.5m bottles of wine and generated nearly $49.5m (RMB 350m). By 2023, close to three-quarters of the revenue came from her own brands such as Wine Daily and Niao Jiu / Flamenco Paradiso.
US-educated
The story of Lady Penguin began 10 years ago, when, with a degree from Brown University in the US, a wine management qualification from Le Cordon Bleu institute and experience selling wine in New York, she burst on the Chinese wine scene with Penguin Red Wine Daily video clips that were as educational as they were entertaining. She quickly attracted a broad audience of younger wine drinkers who liked her style, and backing from within China and Hong Kong from investors who saw her as a unique way to build wine consumption.
Inevitably, for similar reasons, she was also courted by wine companies and generic promotional bodies including Wine Australia which, in 2018, named her ‘Online Wine Communicator of the Year’. Three years later, she published her book, Welcome to Wine: 9 Basics for Beginners which was described by local academic Professor Ma Huiqin of the China Agricultural University as potentially “the most popular wine education book in China.” Also in 2021, the influential China Alcoholic Drinks Association CADA, also dubbed her China Wine Promotion Ambassador.
Subscription sales
From the outset, Wang focused on addressing Chinese consumers directly. This included the launch of two subscription services called ‘Penguin 200’ and ‘Penguin 2.000’. The first of these, which was mostly aimed at novice wine drinkers involved the monthly delivery of a RMB200 ($30) bottle of wine along with educational background material. The second targeted wealthier drinkers whose bottles would have a value of 10 times as much.
While explaining the complexities of Bordeaux and Burgundy in her book and delivering a range of more or less classic wines to her subscription club members, Wang was also profitably exploiting the Chinese taste for sweet, low alcohol beverages with her range of fruit-flavoured, 7-11% wine-based drinks and bag-in-box mulled wine.
In 2021, it was a dispute over similar products from a rival company called Luoyin that led to a court case that Lady Penguin lost and was ordered to pay damages. Her employees were found to have ‘smeared’ Luoyin’s products in ways that included posting negative reviews about them online. The cost to Lady Penguin was relatively small, - RMB 120,000 ($17,750) – but the impact on her reputation was significant.
Shrinking market
Even more important for Lady Penguin, in the last three years, however, may have been the state of the Chinese wine market. While the last decade has – until recently – been one of growing success for her business, since 2017, domestic and imported wine sales in China have been falling steadily. As wine exporters to China have discovered, prices have become increasingly sensitive and the market far more difficult to manage profitably.
Wang Shenghan did not specifically acknowledge these challenges in the video and text she posted on October 8th in which she announced the scaling down of her business. Instead she blamed herself for a lack of focus and too much ambition.
“The online experience of members was not enough, so I opened an offline red wine bar. I like to make products, so I keep launching new ones; I don't cherish the hot products when I have them, and I think I can continue to develop the next hot product. When the company couldn't survive, I thought it was because the red wine market was too small and there was no growth, so I had to "save the country by taking a detour" to expand the product category. I have made fruit wine, spirits, beer, and blended wine. When the company was doing well, my greed was stimulated, and I thought I could do even more. Whether in good times or bad times, my solution is all addition, addition, and more addition…. because I didn’t focus, most of my business started well but ended badly. Throughout the process, although I had ideals, my heart was still not pure enough. I was seduced by this world of drinking and feasting, which prevented me from seeing the obvious truth and made me hesitate to make a choice between being a channel and building a brand."
She also described what westerners would call 'burn-out'. Following the birth of her second child, a daughter, she found that she could no longer perform as an influencer.
“ I had stopped updating for almost two months, but I still filmed the video for the monthly subscription. I didn't expect that when filming, I felt physiological nausea - I really felt uncomfortable in my abdomen after clicking record, and I started to retch. I lost the ability to express myself freely, so I had to write a script, but even a sentence I had written in advance could not be read smoothly after I read it eight or nine times.”
Paradiso Lost
If, at least for the moment, Wang's days as an influencer are over, sales of her fruit wines, the once best-selling Flamenco Paradiso and all but three Chinese wines will cease, and the subscription schemes will be wound down, Lady Penguin is not about to abandon the wine sector. She now seems likely to reinvent herself as a producer of a Chinese wine from Ningxia that will be released in December.
But her disappearance from the scene will disappoint those who, just a few years ago, believed in a China where fermented grape juice would inevitably supplant the local baijiu spirit, and tens of millions of citizens would eagerly follow enthusiastic young influencers like Lady Penguin on the road to wine.
In preparing this piece, we are indebted to numerous articles by Vino Joy News which remains the most invaluable source of information about the Chinese wine scene,
