Red Wine World Plans to Exit New Third Board, Unprofitable After Ten Years of Listing

How does the AI smart wine cabinet business impact the company’s losses?

Shenzhen Red Wine World E-commerce Co., Ltd. (referred to as “Red Wine World”) recently announced plans to withdraw from the New Third Board to improve operational efficiency, control costs, and focus resources on business development.

Since listing in 2016, due to increased expenses during brand expansion, declining gross profit margins caused by pricing strategies, investments in promoting smart wine cabinets, and depreciation expenses, Red Wine World has yet to turn a profit. Since 2020, it has experienced five consecutive years where losses have not exceeded one-third of the paid-in capital.

Ten years listed without profit

Regarding the termination of the listing, Red Wine World attributed it to the company’s long-term strategic development and operational needs to maximize benefits for the company and all shareholders, improve decision-making and management efficiency, conduct business effectively, control costs, and focus resources on business growth. “Terminating the listing will not have a significant adverse impact on the company’s normal operations.”

Data shows that Red Wine World mainly engages in online sales of wine. Since its listing on the New Third Board in 2016, it has not achieved profitability.

From the start, Red Wine World’s performance showed “congenital deficiencies,” with losses in 2013-2015. In its public transfer prospectus, the company stated that ongoing losses were due to entering the wine sales industry at the end of 2012, with offline sales channels still being built, and online third-party and self-operated sales platforms being relatively new, requiring time to gain customer recognition. Sales scale was small, and management and staff salaries were high.

In 2016, Red Wine World’s cross-border e-commerce platform officially launched, and it established a wholly owned subsidiary in Hong Kong and an office in France. Due to the large amount of information published on “Red Wine World Net” and investments to expand warehouse capacity in bonded zones, expenses for technology development, talent training, platform promotion, product marketing, and brand communication increased, while gross profit margins declined. During this period, net profit dropped 63.16% to -34.5781 million yuan.

From 2017 to 2019, driven by growth in online channels such as the Red Wine World Member Mall, Cross-border Mall, and Hong Kong Mall, revenue increased for three consecutive years with a narrowing of losses. However, due to pricing strategy adjustments leading to lower gross profit margins, the company was unable to turn profitable.

Since 2020, Red Wine World has experienced five years where losses have not exceeded one-third of the paid-in capital. In announcements from 2021 to 2023, the company mentioned ongoing investments in customer base expansion, brand promotion, content database construction, technology development, human resources, and marketing.

In 2024, due to changes in user demand leading to a decline in sales, revenue decreased by 40.53% year-over-year to 78.56 million yuan, mainly offset by gains from the sale of subsidiaries. The main wine business revenue fell 41.17% to 73.9855 million yuan.

Smart wine cabinets worsen losses

Among the many factors causing losses, investments in promoting smart wine cabinets and depreciation expenses are frequently mentioned.

From 2016 to 2019, Red Wine World’s main business was wine sales. In February 2018, it participated in establishing a joint venture, Qingdao Jiushishi Intelligent Technology Co., Ltd. (renamed Qingdao Bofin Intelligent Technology Co., Ltd. in 2021), to develop smart wine cabinets. In 2020, this joint venture, in collaboration with Qingdao Haier Special Electric Freezer Co., Ltd., launched smart wine cabinets that can be managed via RFID tags.

In April 2021, Red Wine World acquired intangible assets from Qingdao Haier Special Electric Freezer, including patents and trademarks related to smart wine cabinets, costing 70 million yuan. The company stated this would promote operational innovation, enhance customer experience, and increase sales, aligning with its long-term strategic layout. The same year, it invested an additional 80 million yuan in Qingdao Bofin Intelligent Technology, increasing its stake to 92.22%.

In October 2021, Red Wine World announced a private placement plan to raise 60 million yuan to purchase components such as cabinet bodies, mainboards, RFID modules, and to cover expenses for setting up smart wine cabinet display stores.

However, this business expansion added to the financial strain. Starting in 2019, the company’s financial reports included the smart wine cabinet business. From 2020 to 2024, revenue from this segment was approximately 5.06 million, 5.39 million, 3.52 million, 5.35 million, and 3.82 million yuan respectively. R&D, branding, and promotional investments, along with increased depreciation of smart wine cabinets given to customers, led to annual losses accumulating over time.

In June 2024, Red Wine World sold its 92.22% stake in Qingdao Bofin Intelligent Technology to related party LaVilete (Shenzhen) E-commerce Co., Ltd. for 83 million yuan, ceasing its involvement in smart wine cabinet R&D and manufacturing. The company explained this was based on long-term strategic needs to optimize resource allocation and promote sustainable development. This sale resulted in an investment gain of 62.34 million yuan in 2024.

However, by April 2025, the annual auditor’s report issued an unqualified opinion with emphasis of matter, citing nearly 79.12 million yuan of transfer payments owed by Qingdao Bofin Intelligent Technology and LaVilete (Shenzhen) E-commerce.

At the same time, the company’s audited net assets as of December 31, 2024, showed a deficit of about 354 million yuan, with paid-in capital of 92.33 million yuan, meaning losses exceeded one-third of paid-in capital. The main reasons cited include declining sales and gross margins due to changing user demands, closure of offline stores, warehouse lease terminations, personnel restructuring, and the disposal of fixed assets related to smart wine cabinets.

To reduce losses, Red Wine World proposed expanding cooperation, increasing sales, developing AI tools, improving operational efficiency, and reducing staff. However, due to declining sales, its financial performance further deteriorated in the first half of 2025, with revenue down 49.49% year-over-year to 21.52 million yuan. Operating losses widened, with net profit decreasing 73.35% to -7.65 million yuan, affected by business model transformation, higher gross margins, reduced rent, and layoffs.

An industry insider who wished to remain anonymous commented that Red Wine World is essentially a wine distributor relying on online sales, but its ventures into content promotion and smart wine cabinets have shifted it from a light-asset to a heavy-asset model. Coupled with sluggish wine consumption and declining gross margins, this has led to continuous losses.

Beijing News Chief Reporter Guo Tie

Editor Tang Zheng

Proofreader Mu Xiangtong