Moutai's "diving" shook a thousand waves

There is always a reason

2024-06-28 17:43Creators in the field of technology

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01 Moutai's liquor prices continued to fluctuate, falling below 2,600 yuan in April, below 2,500 yuan on the eve of the Dragon Boat Festival, and the wholesale price of bulk bottles fell to 2,100 yuan on June 25.

02 The decline in Moutai prices has damaged the confidence of the consumer market, and the auction market has also been affected, with only 11 of the 132 lots sold in the lot.

03 Secondly, the competition in the liquor market has intensified, and major distilleries have announced expansion projects, and Moutai has become the target of siege by other manufacturers.

04 However, Moutai's price reduction did not bring about consumption fairness, but instead led to a decline in the price of other liquors, affecting the entire liquor market.

05 At present, Moutai urgently needs to recover so as not to bring unpredictable consequences.

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Moutai's liquor prices continue to fluctuate.

In April, the reference wholesale price of Feitian Moutai fell below 2,600 yuan, and since then it has started a sharp decline mode. On the eve of the Dragon Boat Festival, Feitian Moutai fell below 2,500 yuan; In mid-June, everyone began to worry about whether Moutai would fall below the "bottom line" of 2,200 yuan for wine merchants, and on June 24, the wholesale price of Feitian Moutai bulk bottles in 2024 fell below 2,100 yuan; On June 25, although it rose slightly to 2,100 yuan, it was also weak.

Such a huge price drop caught everyone off guard.

The pawn amount of 53 degrees Feitian Moutai in 2024 given by many pawnshops in Beijing has touched the market guidance price of 1,499 yuan per bottle. This is a situation that many pawnshops encounter for the first time. During the "618" promotion, due to the long delivery cycle of some merchants and the decline in the price of Moutai, Moutai became a money-losing futures product, which made many "scalpers" stop recycling Moutai, and even suffered large losses, and had to withdraw from the second-hand recycling market of Moutai.

The collapse of the retention rate has also implicated the auction market. In a special auction of Kweichow Moutai, only 11 of the 132 lots were sold. At the same time, the price of old wine is also decreasing. Last year, a set of six bottles of 1990 iron-capped Kweichow Moutai sold for 224,300 yuan, and this year, it is between 162,000 and 210,000 yuan.

In order to end this dangerous price shock, Moutai has worked hard. But today, the situation seems to have failed to change, and even the stock price has been affected.

On May 7 this year, Moutai ushered in a phased high point this year, with a total market value of more than 2.22 trillion yuan. However, with the fall in the price of Moutai, the total market value has shrunk to less than 1.87 trillion yuan on June 25. In more than 30 trading days, the total market value has evaporated as much as 350 billion.

Moutai plummeted to blame

The consumer market once endowed a bottle of Moutai with multiple attributes, whether it is social attributes or financial attributes, it is a scarce resource in China, so that it causes public obsession, and its own drinking value has become the most inconspicuous characteristic.

Now, Moutai has finally encountered difficulties.

Outsiders often applaud this price "crash" from the perspective of consumers, but in the current macro environment, it is difficult to hide the unfavorable signals behind the decline.

The "depreciation" of Moutai is probably from multiple perspectives.

The first is the lack of demand. As we all know, with the general decrease in consumer desire, consumers' purchasing power has begun to be greatly reduced, which has also led to huge inventory pressure on the entire liquor industry.

Although Moutai was once the first share of Big A, in the face of such a turbulent trend, it is also like a flat boat in the sea, unable to change the direction of the storm.

According to the "2024 China Liquor Market Interim Research Report", nearly seventy percent of liquor merchants reported that the unit price of customers declined, and the inversion of 800 yuan to 1,500 yuan was the most serious. On June 14, 2024, the number of reservations for 1,499 yuan Feitian Moutai on Jingdong was only more than 100,000, and the number of people was at least one million in the past.

It is this general trend that has made Moutai's strong financial and social attributes begin to weaken.

Secondly, with the advent of the stock market, the competition in the liquor market has intensified. In the context of sluggish consumption, brands and channels have to start a fierce zero-sum game.

Among them, the expansion of production has begun to become the main means of involution of major wineries.

According to the data provided by the China Wine Association, in addition to Moutai, Wuliangye, Luzhou Laojiao, Fenjiu and other leading liquor companies have successively announced nearly 50 expansion projects, involving a capital scale of no less than 200 billion yuan, aiming to expand production capacity to one million tons.

Among them, Wuliangye plans to increase its production capacity from 140,000 tons to 240,000 tons after 2025, and Luzhou Laojiao also plans to increase its production capacity from 170,000 tons to 250,000 tons.

In the liquor circle, Moutai has always been the one who has been chased and targeted, and the middle and high-end players have been trying to squeeze into Moutai's position for a long time. This means that, whether Moutai wants it or not, it has become the target of unanimous siege by other manufacturers.

In the decade from 2014 to 2023, the total market share of CR5 in the liquor industry has steadily increased from 17% to about 43%. In recent years, a number of liquor brands have carried out high-end layouts, and the pressure on Moutai can be imagined.

When consumption encountered downgrading, and countless substitutes came one after another, the price of Moutai was naturally affected.

In terms of channels, during the Dragon Boat Festival, what is more interesting than Moutai's continuous price reduction is the "mutual tearing" drama between scalpers and e-commerce, which directly exposes the current transaction crisis of Moutai.

It is reported that many online merchants have taken advantage of Moutai's price reduction to play with liquor "futures", resulting in the loss of the interests of a large number of scalpers who hoard goods and collectively encircled and suppressed e-commerce players.

It is worth noting that e-commerce platforms have a lot of "responsibilities" in the depreciation of Moutai, especially in the field of e-commerce, which has ushered in an uninterrupted price war. It is reported that after Taobao's 10 billion subsidy channel, Jingdong's self-operated liquor zone, and platform subsidies, Sanmao directly let consumers see Moutai's unprecedented cost performance.

Scalpers, e-commerce, and even the entire dealer market, the chaotic order has shaken the price foundation of Moutai's flow to the market. Of course, the price of Moutai continues to fall, which is not unrelated to its own brand downgrade. In recent years, Moutai has suffered from the non-youthfulness of consumer groups and is bent on winning the favor of young people.

Several co-branding that caused a sensation among young people have caused a lot of dissatisfaction with the originally stable market consumers.

In the eyes of many people, Moutai's pursuit of young people has, in a sense, the risk of lowering the brand tone and overdrawing the brand value. What's more interesting is that Moutai intends to put down its position in front of the next generation, and the brands it cooperates with are basically selected in the parity range, such as Mengniu, Luckin, Dove......

In this regard, although young people applauded, they did not become a new force in the consumption of liquor. According to the "Young People's Wine" report, only 11.2% of young people prefer alcohol with an alcohol content of more than 30 degrees, and only 13% of young people's alcohol choices, liquor ranks behind wine, fruit wine, whiskey and beer. This group's refusal to buy liquor has also become the most anxious thing for Moutai.

The wind started at the end of Qingping, and now looking at the plunge of Moutai, everything seems to have traces.

The "price protection war" is not easy to fight

In the past two years, Moutai has taken great pains to protect the price.

In order to better grasp the market pricing power, Moutai's most direct means is to increase the ex-factory price of products, the data shows that in 20 years, Moutai has adjusted the ex-factory price nine times, and it has been more frequent in the past two years, in November last year, the ex-factory price of Feitian and Wuxing Mao was increased from 969 yuan to 1169 yuan.

However, blindly adjusting the ex-factory price did not bring significant results, so Moutai began to continue to deal with it "heavy-handed". At present, Moutai's series of price protection actions basically revolve around such a logic: reducing supply, expanding demand, increasing marketing expenses, and even tapping a larger market.

On the supply side, Moutai's attitude is very direct, insisting that scarcity is expensive. Some time ago, Moutai suspended the application acceptance of group buying enterprises through direct channels in some provinces, trying to regulate market prices by limiting the preferential amount. Subsequently, it was announced that the synthetic exercise of Xunfeng 375ml Moutai would be suspended.

For the dealers, Moutai is not soft at all.

It is reported that dealers in many places said that the 12-bottle Feitian Moutai will be canceled soon, and the Feitian Moutai unpacking policy will also be canceled, at the same time, some merchants have also received a notice of suspension of delivery of 15-year-old Moutai and boutique Moutai, and the delivery of Feitian Moutai in June in some areas will be carried out in batches.

In fact, Moutai has been bent on stabilizing its pricing power through distributors over the years. As early as 2018, Moutai planned to eliminate the number of dealers, and that year, more than 400 domestic dealers in Moutai were banned, and the number was reduced to 2,987 by the end of the year. In 2019, this number dropped further to 2,377.

In the past three years, the number of Moutai dealers has been controlled within 2,100.

Then, Moutai began to support direct sales channels, and launched the i Moutai App in 2022, and by the first quarter of 2024, the financial report shows that Moutai's direct sales revenue has accounted for 42%. But it is clear that the direct-to-consumer approach has not allowed Moutai to truly regain its pricing power, and now it is at a critical juncture, and it still needs to rely on a strong distribution network.

Frankly speaking, in the final analysis, Moutai's price fluctuations are still the "pot" of the consumer market, and in order to get rid of the shackles of the gradual growth of domestic liquor demand and consumption downgrade, Moutai urgently needs to open up new markets. In view of this, since 2024, Moutai's eagerness to go to sea has also reached an unprecedented state.

In January, Moutai executives led a team to Italy and Switzerland, and it is reported that Italy will become the core market for Moutai to go overseas in the future. According to the data, Moutai's goal to go overseas is to export more than 5,000 tons of products and exceed 10 billion yuan in the international export market by 2027. However, in the past year, Moutai's annual product exports reached only 2,132.71 tons, with a revenue of 4.065 billion yuan. In the same period, the total revenue was about 149.5 billion yuan, and the contribution of overseas markets was less than 3%.

Doubling the volume of product exports in three years is an unlikely task.

But no matter what the road ahead is, Moutai is bound to go on this step, and it is better to take the initiative to break the situation than to sit still. On June 25, the batch price of bulk bottles Feitian Moutai in 2024 rebounded to 2,150 yuan, showing a slight increase. In the secondary market, Kweichow Moutai's share price has also turned red in the short term.

Although the small rebound is a drop in the bucket, it at least comforts many scalpers who are in a hurry to run away. According to media reports, after June 25, the purchase price of bulk Feitian Moutai cattle has returned to 2,120 yuan, and the batch price of bulk bottles of Feitian Moutai in Xi'an, Zhengzhou, Jinan, Wuhan and Chengdu has basically remained at 2,300 yuan.

As for whether it can continue to recover, no one dares to say easily. After all, in the eyes of many people, Moutai, which has always looked down on the A-share market and the consumer market, returns to the essence of liquor, and removes the excessively high premium, which is the real normalization.

Moutai fell, no one "fed"

Interestingly, Moutai had an unfavorable year, not only did not make a group of friends happy, but it brought a sigh.

Previously, some liquor-related practitioners said that they all hoped that the price of Moutai could rise quickly, otherwise, the products of other brands would also lose some pricing space.

Although the major liquor brands are bent on becoming the next "Moutai" on weekdays, it turns out that when Moutai is lonely, there are no more opportunities left for them, and there is even the possibility of being "sitting".

The liquor market needs Moutai, at least in terms of stabilizing market confidence, Moutai's influence is irreplaceable for the time being.

According to the survey, most liquor brands will refer to Moutai in the pricing of new products, especially those who always want to squeeze into the high-end track.

For example, at the 110th National Sugar and Wine Fair, the pricing of new products of many distilleries basically revolves around 1,399 yuan, 1,299 yuan, etc., tacitly lower than the guide price of the Moutai market.

Now the price of Moutai has fallen, which has also indirectly led to the decline in the price of other liquors. According to public information, the price of the eighth-generation classic Wuliangye has dropped from 940 yuan/bottle three months ago to 860 yuan/bottle, and the prices of other brands such as Guojiao 1573, Guotai, and Xijiu have also been reduced.

However, the price is only one aspect, and what is even more unacceptable to liquor companies is that the share price of Kweichow Moutai is also closely related to the entire liquor sector. According to the data, as of June 24, the total market value of Kweichow Moutai was 1.85 trillion yuan, while the total market value of the rest of the liquor listed companies was about 1.5 trillion yuan, and Kweichow Moutai accounted for more than half of the total market value of the liquor sector.

This is actually an unreasonable market pattern, but Moutai has tied the entire market to its own chariot. Even the impact of Moutai on the liquor market is much greater than the impact of the market on Moutai.

For example, in the whole of last year, the average decline of A-share listed liquor companies was 20.73%; Moutai fell only 0.86%, while Luzhou Laojiao fell 22% and Wuliangye fell 24%; Other second- and third-tier players, such as Drunkard Liquor, Yanghe, and Shede, have fallen by more than 30%. During the decline of Moutai from May 7 to June 24 this year, the Wind Liquor Index fell by 17.59%, which was more than the decline in Kweichow Moutai's share price.

One is prosperous, and one is lost. The prosperity of the liquor industry has dropped from 21.95% in October 2021 to 15.37% in June 2024. To put it simply, before he became the next Moutai, he was afraid that Moutai would eat too much, and he was afraid that Moutai would fall.

Looking at the entire liquor circle, in addition to the liquor companies that need Moutai, the downstream supply chain is also looking forward to Moutai's re-protection.

A liquor packaging company in Zunyi City has publicly revealed that with the fall in wine prices, the profits of developing new liquor have decreased, and the order volume of packaging factories has dropped by 30% this year. If this continues, it will be a fatal blow to it.

In addition, in addition to Moutai, the current liquor companies are actually seeking to go overseas in order to solve the consumption dilemma encountered in China. However, the recognition of baijiu overseas is far from reaching a certain stage of maturity. According to data released by the China Liquor Industry Association, the cumulative export volume of mainland alcohol in 2022 will be 816,400 kiloliters, of which the export volume of liquor accounts for only 2%.

Because of this, to a certain extent, Moutai has become a business card for liquor to go overseas, and it is also the only 100-billion-level liquor single product in the world. Even in the entire liquor market, Moutai also plays more of a "spokesperson" role. If Moutai can't get up quickly after falling, I'm afraid it will trigger more chain reactions behind him.

For consumers, Moutai's price reduction will make consumption more fair, but it still has to recover as soon as possible to avoid unpredictable consequences.

The Tao is always reasonable, and he used to use the name Crooked Dao, the Internet and new media in the technology circle. WeChat public account of the same name: 道总有理 (daotmt). This article is an original article, and any form of reproduction without retaining the author's relevant information is prohibited.

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