The startup raised US$1.7 million in first round of funding from German-based private investor Joerg Winklemann
BottlesXO, a mobile app that delivers wines with its proper, ready-to-serve temperature within an hour of ordering, is launching in Hong Kong this month.
The startup, which launched in Shanghai in June this year, recently expanded to Suzhou, a city northwest of Shanghai. It is also planning to hit the Singapore market early next year.
The startup was founded by Mischa Schulze. A German national, he relocated to Shanghai to open a design firm three years ago, before founding BottlesXO. He was living the typical “agency life” laced with late, thirsty nights in Shanghai.
“In Berlin, it’s easy to get access to wine anytime. But in Shanghai, after 9PM I can only go to the late night stores. There is no ‘good’ wine there, in term of quality,” says Schulze, referring to the vast majority of liquor stores in China which stock a disproportionate amount of bai jiu (a Chinese alcoholic beverage).
Schulze also found prices at these stores “unbelievably expensive”. So, he, along with fellow wine connoisseur Thilo Fuchs, started investigating why the prices were so high compared to Europe.
They couldn’t find a reason for the exorbitant prices of wines in the city. So they started BottlesXO, which delivers affordable wines and also provides information on the bottle, tasting notes and suggests food pairings. The duo roped in Chinese native Zou Zhengfeng as the third Co-founder.
Currently, the team has around 20 staff in Shanghai alone.
Schulze’s former employer Blue Scope Communication provided the seed funding worth US$100,000 to develop the prototype of the app. This was followed by a funding round of US$1.7 million from Joerg Winklemann, a private investor in Germany. The trio now plans to raise the second round of funding around the Chinese New Year.
Competition flows in Hong Kong
Talking about competition, Schulze says: “We are competing with everyone — supermarkets and online stores that pre-deliver local brick and motor stores.”
Despite the difference in culture, the BottlesXO team sees Shanghai as its training grounds for Hong Kong.
“I think the market in Shanghai is highly competitive. Chinese consumers are very very demanding,” says Schulze, saying that Shanghai offers more choices than Hong Kong does.
They’ve had to make a few logistical changes. In Mainland China, the startup hires its own team of drivers that speak perfunctory English, because “drivers are our only touch point.” In Hong Kong, the team is working with a third party company for delivery. But BottlesXO doesn’t want to be grouped in the myriad of food delivery services in town.
“Delivery services are not serving their own products. They are [bringing] stuff to your door. I think delivery services compete on who is faster and cheapest. The business model is very flat. We are a niche model. I’m not afraid of the food delivery guys. I’m not looking to make 600 deliveries per hour [or] rely on growing our user numbers by the thousands per week,” Schulze says.
BottlesXo is aiming to be profitable in nine months, a goal the company said it managed to achieve in Shanghai. The startup currently have a few stock rooms from which it distributes wines to select areas in Hong Kong.
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