GuShiio.com Wen| Chinese business strategy
On January 10,#Moutai Ice Cream closed stores and stopped production and cleared up at 30% discount #went on hot searches.
From young people’s first bite of Moutai to now quietly fading out of the market in clearance promotions, behind the exit of ice cream, Moutai is taking heart and focusing on the main business of liquor with a more pragmatic attitude.
Cool ice cream
“I can’t buy Moutai to drink, can’t I afford ice cream?” rdquo;
At the 2022 Top Ten Economic Figures of the Year Award Ceremony, this sentence by Ding Xiongjun, former chairman of Kweichow Moutai, instantly ignited the topic and made it a hot search on Weibo, with the topic popularity reaching 220 million.
On May 29, 2022, Moutai Cross-border Mengniu jointly launched Moutai Ice Cream. With young people’s first bite of Moutai with labels such as 2% of the wool content, it quickly detonated the market as soon as it appeared.
Moutai International Hotel’s iconic No. 001 ice cream flagship store has become a popular check-in resort. After the store opened to the country, many consumers even rushed to the flagship store to queue up at 4 a.m., just to buy this Internet celebrity product as soon as possible.
Moutai official data shows that sales exceeded 200,000 yuan in seven hours after its flagship store in Guiyang officially opened for sale; at the launch promotion meeting, three pre-packaged Moutai ice creams launched the iMoutai App, and all sold out within an hour, with sales exceeding 2.5 million yuan.
First-tier cities such as Beijing, Shanghai, and Guangzhou have also quickly opened flagship stores, and there are long queues waiting in every city. Some stores still have difficulty stopping the crowd due to purchase restrictions.
Moutai Group executives revealed that by December 2022, about 3.4 million people had purchased and tasted Moutai ice cream, and about 400 million people knew and understood Moutai ice cream. That year, Moutai Ice Cream contributed approximately 262 million yuan in revenue to Kweichow Moutai.
Ding Xiongjun has high hopes for Moutai ice cream. In his view, Moutai ice cream is not a simple consumer product, but a strategic product. It is an important way to cultivate the Maotai-flavor taste of young consumers and promote the rejuvenation and fashion of the Moutai brand.
Seizing young people means seizing the future of Moutai.
In 2023, at the anniversary celebration of the launch of Moutai Ice Cream, Kweichow Moutai officially announced that May 29 of each year will be designated as the Moutai Ice Cream Festival. This year, Moutai Ice Cream opened a total of 34 flagship stores across the country, and opened 22 experience stores in Chongqing, Yan ‘an, Fuzhou and other regions, with cumulative sales reaching nearly 10 million cups.
However, from the beginning, discussions and doubts about Moutai ice cream have never stopped.
Many people believe that Moutai should honestly make wine well and cherish its high-end position. Cross-border places like ice cream do indeed take over, but if overdone, it will dilute Moutai’s brand value.
Some people also pointed out that Moutai makes ice cream as an amateur after all. A temporary surge in sales does not mean that consumers truly recognize its ice cream. When the excitement and fashion pass, Moutai ice cream will no longer be sold.
Looking at it now,Both have become predictions.
As early as June last year, Nanjing media reported that Nanjing Xinjiekou Moutai Ice Cream Flagship Store had officially closed, and the shopping mall also confirmed that the store had withdrawn its stores. Since then, similar news has been reported in Beijing, Guangzhou, Shenzhen and other cities.
Online channels, including Moutai ice cream, also cannot escape the fate of being cool.
Moutai Ice Cream’s Weixin Mini Programs are no longer searchable; i On the Moutai App, Moutai Ice Cream Classic Cup, Classic Wine Bottle and Small Branch products all show that the store is selling out and replenishing, and only a few unpopular flavors can be purchased.
E-commerce platforms such as Tmall and Jingdong have also removed the flagship store products of Moutai Ice Cream, and the Douyin flagship store is also empty. Even if there are platforms that still sell Moutai ice cream, most of them are in stock products that are close to the shelf life.
A salesperson revealed that the manufacturer has stopped production, and all the existing inventory is the remaining inventory from last year.& rdquo;
At the same time, the price of Moutai ice cream began to plummet. On third-party sales platforms, the original price of a classic flavor of 66 yuan each now costs only 21.9 yuan.
On the afternoon of January 10, the relevant person in charge of Kweichow Moutai responded that Moutai ice cream had achieved certain results in cultivating young consumer groups.At present, for the ice cream business, the company has strategically chosen to actively shrink.
Cross-border Moutai
Although Moutai has a long history of cross-border cooperation and diversified business layout, its cross-border really attracted attention only after Ding Xiongjun became chairman in August 2021.
During this period, the company has launched a variety of new cross-border products, from ice cream to coffee, from mooncakes to co-branded cultural creations, and even Maotai-flavored queen rooms. The cross-border steps are getting bigger and bigger, and the moves are becoming more and more colorful.
“Everything can be Moutai, let it hit hot searches time and time again.
Why is Moutai so keen on cross-border? One of the important reasons at the time was:Younger.
Against the background of the slowdown in the growth rate of the liquor industry and the intergenerational replacement of the main consumer groups, Moutai, as the top leader in the industry, is trying to narrow the distance between young people and Moutai through attempts to break the circle, so as to take the lead in future market competition.
But challenges also follow.
Almost every cross-border product has failed to escape the fate of a flash in the pan.
Take Moutai ice cream as an example. It brings a novel experience of drinking Moutai, but in the end, ice cream has to return to ice cream. When the freshness passes, the experience as ice cream is insufficient, and disappointment follows.
“The taste of ice cream is too strong and sweet. The overall harmony is not enough. I don’t want to buy it again after eating it once.& rdquo; A consumer’s complaint on social media expressed the sentiments of many people.
A similar situation also occurs in Moutai’s other cross-border products.
In September 2023, Moutai and Ruixing Coffee jointly launched the Maotai-flavored latte, which achieved an astonishing sales volume of 5.42 million cups on the day of launch, with sales exceeding 100 million yuan, becoming a phenomenal hit at that time. However, after the popularity, the Maotai-flavored latte also retired sadly.
For example, the wine-core chocolate that cooperated with Dove also gradually faded out of consumers ‘attention after a brief period of market popularity.
Opening high and moving low also makes people doubt the significance of Moutai crossing the border.
First of all, this means that it is unlikely to bring sustained performance growth to Moutai.Moutai’s financial report does not separately list income such as ice cream, but taking 2023 as an example, the total revenue of the company’s other businesses (including hotel business and diversified product business) is only 475 million yuan, which is compared to Moutai’s total operating income of 150.56 billion yuan., it is almost negligible.
Secondly, the huge traffic and brand exposure,How much transformation it can bring to its core liquor business is always a question mark.
“People who have eaten Moutai ice cream and drank Maotai-flavored lattes may not necessarily pay for Feitian Moutai.& rdquo; An industry insider pointed out that although cross-border products have broadened Moutai’s brand boundaries, their role in core consumption transformation has always been limited and fail to solve the fundamental problem of insufficient coordination with the main business.
In the eyes of many people, frequent cross-border and continuous short-lived events may also have side effects:
The most valuable thing about Moutai is that it is expensive. Excessive FMCG cross-border will reduce its sense of honor.
Quietly relax
On January 5, 2025, Kweichow Moutai released the Year of the Snake Zodiac wine, with a market guidance price of 2499 yuan/bottle. So far, the Moutai Zodiac wine series has completed a complete 12-year cycle.
This wine has been highly expected by Tibetan friends, but the market response has been lukewarm, and the price popularity is far lower than before.
Today’s wine price shows that as early as January 2, before the snake grass was officially released, its market price had reached as high as 3800 yuan/bottle; on the day of release, the price dropped by 1,000 yuan to 2850 yuan; on January 17, its price further fell to 2730 yuan.
According to Ningbo Evening News, the terminal market transaction price of 500ml snake grass is 2,700 – 2,800 yuan/bottle.
Looking back on previous years, the launch of zodiac wine has always set off a wave of price increases and buying. When Longmao was listed in 2024, the price was once speculated to 8,000 yuan; in 2023, rabbit grass was not inferior, and the price was speculated to nearly 6000 yuan; in 2022, tiger grass also reached a high price of 7000 yuan. In comparison, this year’s snake grass appears particularly low-key.
Moutai has long felt a similar encounter. As we enter 2024, the price of Feitian Moutai is chilly all the way.
In 2024, it experienced four price declines in April, June, July and October, falling sharply from more than 3000 to around 2100 yuan. Moutai, which previously relied on cross-border, out-of-stock, and price increases, has begun to frequently go on hot searches because of price cuts and even being sold off.
Just as the price of Moutai was broken, in April 2024, Zhang Deqin replaced Ding Xiongjun as chairman of Kweichow Moutai.
“An old Moutai person and an old wine industry person,Such a label gives the outside world special expectations for Zhang Deqin to take over Moutai. Everyone hopes that he can lead Moutai to withstand the cold market winter, traverse the cycle, and continue to write brilliantly.
Among them, one of the key points that attracts attention is whether he continues the series of cross-border operations of his predecessor or whether he thinks differently about cross-border. Less than a month after taking office, Zhang Deqin gave the answer tactfully at the Kweichow Moutai shareholders ‘meeting.
He said:“Moutai has made many attempts in recent years. I hope everyone will understand the attempts made by Moutai. Enterprises have the ability to correct errors and will adjust immediately if they find inappropriateness. They must believe in Moutai’s ability to correct errors. rdquo;
To believe in Moutai’s ability to correct errors, this statement can also be said to set the tone for Moutai’s cross-border approach.
Following this, there was a series of obvious return and heart-warming actions.
Products such as Moutai ice cream and Maotai-flavor latte have been turned into self-financing and gradually faded out of the market. At the same time, optimization and innovation related to the core of liquor are focused.
One of the landmark actions is to propose three transformation strategies based on liquor:Focus on high-end business groups (customer group transformation), expand diverse drinking scenarios (scenario transformation), and enhance brand service experience (service transformation).
This shows that Moutai will promote development and innovation more consumer-oriented, focusing on the wine itself.
In 2025, responding to challenges will remain the main theme.
On January 15, Zhang Deqin emphasized at the Moutai Group Employee Representative Conference that we should respond to the situation in accordance with the times, strengthen the foundation and consolidate the foundation, build a solid integrated industrial ecology with the main business of wine as the core, consolidate Moutai Liquor ‘s status as the anchor star ballast stone, and let Maotai-flavor series wine has become the moat and growth pole of the brand.
This is not only a rational response to market changes, but also a recalibration of Moutai’s business direction.
From high-profile cross-border to focusing on its main business, Moutai is abandoning impetuosity, returning to quality, value, and its long-term competitiveness as a leader in high-end liquor.
References:
[1]《Zhang Deqin, Chairman of Moutai: Adhere to the strategy of product price matching and large single product products, fully tap existing demand and cultivate incremental demand “Paper News
[2]”Moutai shrinks ice cream business and is on sale with a 30% discount on imminent products!” financial Union
[3]”Moutai Ice Cream Disappeared with Ding Xiongjun?” South Plus
