Financial Investment News reporter Liu Min photography Li Li
■ With the help of the digital system, Wuliangye continuously optimizes the allocation of marketing resources and achieves good performance and digital precision marketing
■ Luzhou Laojiao carefully creates a high-end circle communication platform for members, so that club members can enjoy the high value-added experience brought by Guojiao's products
Since May this year, Kweichow Moutai, the leading liquor company, has suffered a "double kill" in stock price and liquor price, pushing the adjustment of the liquor industry into a white-hot stage.
The reporter of the Financial Investment News noticed that under the influence of the increasingly clear season of liquor demand, liquor channel dealers are under pressure at both ends, not only facing inventory pressure and changes in consumer demand, but also facing the pressure brought by the price increase of upstream manufacturers' products. In the current environment, the relationship between liquor manufacturers has once again been emphasized, channel distributors are thinking about how to break the situation, and can the new sales model inject new vitality into the liquor industry?
The decline in the price of Moutai stirred up the liquor market
Around the Spring Festival this year, driven by the market, the wholesale price of Feitian Moutai in 2024 is just at the 3,000 yuan/bottle mark, and the bulk Feitian price also exceeds 2,700 yuan/bottle. According to the latest news on June 28, the price of Feitian Moutai in 2024 will be 2,530 yuan/box, and the bulk price will rebound from 2,080 yuan/bottle to 2,290 yuan/bottle.
As of the close of trading on July 1, Kweichow Moutai's share price closed at 1440.38 yuan per share, a cumulative decline of 16.47% since May 7. As a leader in the liquor industry, Kweichow Moutai's stock price and liquor price have "double-killed", reflecting that the entire liquor industry has entered a period of deep adjustment. From May 7 to July 1, 16 stocks in the liquor sector fell by more than 16%. Among them, Huangtai Liquor fell as much as 31.55%, and 8 stocks such as Golden Seed Liquor and Gujing Gongjiu also fell by more than 20%.
So, where does the adjustment momentum of the liquor industry come from? Since 2023, wine companies have to sell in the peak season and prices in the off-season, and the pressure on channel inventory has increased. Cai Xuefei, a liquor analyst, told the Financial Investment News, "The liquor industry is cyclical, and the recent price fluctuations of liquor products are more due to the imbalance between supply and demand at the market end, the shrinking of social consumption, and the weakening of expectations for the future market, which has intensified the panic in the market, thus forming a price stampede and triggering a decline in the price of products in the industry." ”
The price is determined by the relationship between supply and demand, so the wholesale price of liquor reflects the relationship between supply and demand more directly, and the access to data is more convenient, which is more likely to affect the market's confidence in the follow-up fundamentals. Some institutions believe that the "price reconstruction" brought about by this year's "618" promotion is one of the main factors for the decline in the wholesale price of famous wine. The decline in the wholesale price of Moutai reflects that the consumption power of the liquor industry has not yet fully recovered, and the fundamentals are still facing certain pressure. Therefore, in the face of the in-depth adjustment of the industry, the management of wholesale prices and inventory of large single products sold by wine companies is more refined and rational. Taking Kweichow Moutai as an example, under the influence of market price fluctuations, the company has made a series of adjustments to its market strategy, such as suspending the group buying business of some direct sales channels, increasing the proportion of direct sales channels, and reducing the number of dealers and market share.
The reporter of the Financial Investment News noticed that Wuliangye also said at the 2023 general meeting of shareholders that the company will optimize and refine the channel construction and make further efforts in marketing. Specifically, Wuliangye continued to expand high-quality dealers and core terminals in the traditional channels of the main brand, launched the Wuliangye member code scanning mini program and consumer activity management platform, and continuously optimized the allocation of marketing resources with the help of the digital system, achieving good performance and digital precision marketing. At the same time, the company's direct sales channels have comprehensively promoted the construction of "three stores and one store", upgraded and built the fifth generation of stores, and the number of stores has continued to increase.
Under the background of adjustment, dealer pressure appeared
The terminal is the place where consumers gather the most, and it is the closest place to consumers. In the view of industry insiders, the current liquor industry is under pressure on profitability at the channel level, and the profit margin of mainstream products has shrunk significantly compared with previous years, but the pressure on liquor companies to crowd out funds on distributors and terminals has not decreased.
According to the "2024 China Liquor Market Interim Research Report" recently released by the China Liquor Industry Association, in 2024, the recovery trend of the liquor industry will be weak, and in the context of stock competition, 80% of enterprises will say that the market is cold, and it has become a fact that consumption diversification, strong differentiation and wide competition have become a fact. In the case of stable holiday consumption, more than half of the dealers and terminal merchants said that the profit margin has decreased.
A reporter from the Financial Investment News visited a number of liquor distributors in Chengdu, Sichuan Province and found that the price of mid-to-high-end liquor has been reduced slightly, but the magnitude is not large, and some dealers have a serious backlog of inventory. "To be honest, liquor dealers have had a hard time this year." A high-end liquor distributor in Chengdu told a reporter from Financial Investment News in an interview, "The decline in the price of Moutai has led to a decline in the price of mid-to-high-end liquor, and we have also taken the initiative to make profits and lowered the price of some products." But the main pressure comes from inventory and capital, on the one hand, inventory pressure, and on the other hand, the performance pressure of manufacturers. ”
In this regard, Xiao Zhuqing, a wine marketing expert, told reporters, "The double-digit growth of mid-to-high-end liquor in the past was caused by channel pressure, and now the price of high-end liquor represented by Moutai continues to decline, and dealers can only sell one box and enter one box, and dare not hoard goods." Therefore, the road of channel pressure to support the growth of liquor is not working. ”
Ouyang Qianli, chief expert of Yixiang Baijiu, said in an interview, "The current liquor distributors are facing problems such as high inventory, tight funds, talent shortages, difficulties in transformation, and aging product structure. He believes that dealers who have not transformed are still pinning their hopes on making money with opaque price differences, and profit margins will inevitably be reduced, and customer loss will be serious. Smart dealers have learned to reach a settlement with upstream manufacturers, actively integrate into the alliance, and then reap effective profits.
The so-called alliance is to build an alliance with dealers or terminal stores as a group in the whole country under the guidance of the manufacturer, and agree on the group purchase price and wholesale price to build a community of destiny. In the market, by creating a good market atmosphere, guide more dealers and terminal stores to improve brand reputation and stabilize shipping prices, so as to obtain more support from manufacturers. Taking Luzhou Laojiao's "National Cellar Club" as an example, through the company's direct investment, dedicated services, cross-border high-quality resource development, etc., it carefully creates a high-end circle exchange platform for members, so that club members can enjoy the high value-added experience brought by Guojiao products.
Cai Xuefei believes that this issue should be viewed from a cyclical perspective. The liquor industry has entered a period of adjustment, and the profits of the industrial chain will inevitably decline, which is the general direction for channel providers and terminal merchants to realize the transfer of value services from channel distribution to consumers, and they can actively cooperate with the manufacturer's policies, improve the product structure, expand the source of profits, and carry out local e-commerce and experience marketing innovation practices, which can effectively reduce business risks and enhance their competitiveness.
Liquor distributors explore new sales models
In the face of intensified competition in offline channels, some dealers are also exploring new sales channels and opening online channels to conduct business.
Judging from this year's "618" e-commerce promotion, the total transaction volume of goods on the whole network reached a new high, reaching 798.7 billion yuan, an increase of 102.8 billion yuan over last year, and the online sales performance of alcohol is also constantly refreshing. Specifically, the sales of Tmall's live broadcast of drinks on the first day increased by more than 1,300%; Pinduoduo's first-week report shows that the sales of liquor increased by more than 100% year-on-year; From 20 o'clock on May 31 to 24 o'clock on June 18, Jingdong Supermarket's alcohol revenue increased by 30% simultaneously.
From the perspective of the industry, the current competition in the liquor market is becoming more and more intense, the market structure is showing an increasingly obvious trend of concentration, and the liquor circulation field also shows a trend of concentration to large distributors. Taking Xinhuadu, the first share of liquor e-commerce, as an example, the company divested its retail business and focused on Internet marketing, achieving revenue of 1.402 billion yuan in the first quarter of this year, a year-on-year increase of 106.9%, and a net profit attributable to the parent company of 94 million yuan, a year-on-year increase of 47.1%, and the performance exceeded expectations. It is worth mentioning that in the second half of 2023, the company will begin to deeply deploy live broadcast e-commerce platforms such as Douyin and Kuaishou, and the e-commerce has started rapidly in less than a year, and its performance has achieved unexpected growth.
Bank of China Securities pointed out in the research report that after the peak sales of liquor around the Spring Festival this year, the impact of demand replenishment has weakened, and it will take time for business activities and consumption power to recover. However, based on the optimistic judgment in the early stage, the momentum for winery shipments and distributors' purchases in March was sufficient, resulting in high channel inventory. After entering the off-season of consumption in the second quarter of this year, it took a long time for the channel to digest the inventory, and the "618" promotion was superimposed, and the distillery and distributors increased their promotional efforts, so the price of liquor was slightly loosened.
Zhongtai Securities believes that online channels have become a force that cannot be ignored in the liquor industry, and the entry of Internet giants with "tens of billions of subsidies" and the generational replacement of consumers have further promoted the online process of liquor: on the one hand, it is necessary to accept the challenges of price management and channel diversion; On the other hand, it has also ushered in the opportunities of efficient marketing, young new customers and sinking markets.
Although whether the e-commerce road of liquor distributors can go through remains to be verified by time and the market, Guo Mengjie, an analyst at Pacific Securities, said that with the gradual emergence of the advantages of e-commerce platforms in logistics, price, consumer reach, etc., the online sales of liquor may achieve rapid growth, and the penetration rate has broad room for improvement.