Kweichow Moutai boosts investment

Kweichow Moutai boosts investment

In the next few years, Kweichow Moutai Co Ltd, will make more investments and will aim to export more products to Belt and Road economies.

The 500ml bottle of the classic Feitian 53% liquor has been sold in 44 countries and regions included in the Belt and Road initiatives in September. It has become its main export product which is now being sold at 1,499 yuan through online shopping giant Tmall.

It was in 1993 when Moutai started to export its product weighing just about 45 metric tons. But last year, it was quite a feat, volume that stood at almost 2.2 tons which generated over $450 million.

President of Kweichow Moutai Import and Export Co Ltd., An Huailun revealed that they sell their products through mainstream channels like large supermarket chains, liquor stores, and luxury hotels in some mature overseas markets such as the United States, Australia and France. He made specific mention how the development of the Belt and Road Initiative has attracted more Chinese-funded institutions and overseas Chinese to buy more products.

Despite the revenue this product creates, it is also a known truth that some overseas consumers are not quite used to the unique taste of Moutai, or Chinese baijiu as compared to foreign liquor brands. Given that, the company is trying to mix Moutai spirits with other drinks to make cocktails and promote it in bars.

On the other hand, the distiller is trying to sell more Moutai products at mid-end and high-end overseas Chinese restaurants, The company would like to attract more local consumers to drink Moutai as an accompaniment to Chinese food.

The Shanghai-listed company’s market capitalization now reads at more than 1.4 trillion yuan. It became the first stock to see its share price exceed 1,000 yuan per share after 27 years back in June. It became the most expensive stock in the A-share market, boosted by continuously growing demand and good earnings.

On the contrary, the company also stated that it has faced many restrictions when developing overseas markets. It has recognized its need to consider market growth potential, cultural differences, and laws and regulations.

Last year, Asia ranked first with a 44.87%of the total overseas sales of Moutai followed by Europe and North America, with 21.57% and 10.91% respectively.

The company is also aware that their products have not jumped out of the East Asian cultural circle yet, we still need to increase efforts to cultivate more foreign consumers in Western markets.

Apart from Moutai, a spirit-producing area Guizhou, has about 5,000 spirit makers. Guizhou Xiongzheng Liquors Group is one of the major white spirit distillers based in Maotai. Founded in 2000, the company has seen its business grow rapidly in recent years.

Last year, it started to export its products to the United Kingdom. Zhang Zaibin, president of Guizhou Xiongzheng Liquors Group, reveals that their target consumers are aged between 30 and 50. They sell through food shows as well as some major channels like supermarkets..

In addition, he firmly believes that the domestic market will still be their dominant market. They are also planning to expand into some overseas markets near the UK; with much effort to be put on cultivation and brand promotion. Moreover, the company is still facing challenges such as trade tariffs and the management of goods delivery systems overseas,

According to the National government, the production volume of spirits in Guizhou accounted for 3.5% of the national total and the profits yielded from Guizhou enterprises made up 43% of the whole market.

Governor of Guizhou province. Chen Yiqin stated that spirit making has proved itself to be an important pillar industry for the province, with annual production volumes of over 300 million liters.

She further stressed that they will continue to protect the ecology of spirit making, and continuously optimize the industrial layout and development pattern. Also, that they will further develop the industrial chains to raw material planting, packaging and printing, logistics and transportation, and e-commerce, and promote the integration of primary, secondary and tertiary industries of spirit distilling.