Moutai to double online liquor sales
Kweichow Moutai Co Ltd, China's signature high-end spirit maker, said on Friday that it expects online sales to account for 60 percent of its total sales in the future compared with 30 percent now.
According to a report in China Business News, Moutai earlier had released more than 200,000 bottles of its white spirits into the market to stabilize prices and alleviate supply shortages, but scalpers had purchased most of the products.
In December, Moutai, a distiller from Maotai town, Guizhou province, said it would raise the prices of its products by 18 percent this year, which will be the first price change since 2012.
Dong Baozhen, one of the most famous investors in Moutai from the private equity sector, said on his Weibo account that Moutai prices have risen as the company did not manage its sales channel properly.
"The company should sell its products through e-commerce platforms, rather than brick-and-mortar stores, in order to control retail prices," he said.
A 500-ml bottle of Moutai's classic Feitian 53 percent liquor now retails for 1,499 yuan ($230) on online platform JD and consumers need to make an appointment online to reserve the product first. As of now, the platform has received reservations from nearly 250,000 people.
In December, the price of the same product on JD was 1,299 yuan per bottle.
Li Baofang, general manager of Moutai Group, said Moutai will not change the number of its domestic distributors this year. The company will adjust its sales structure and release new products in e-commerce platforms and overseas markets. In addition, it will increase the supply of some value-added products such as zodiac commemorative wines.
Cai Xuefei, a wine sales expert, said Moutai aims to supervise the flow and pricing of its products, and online sales will help that effort.
"If Moutai can sell 60 percent or more of its products through online platforms, it means the company can subvert its traditional hierarchical agency system, and shape a flat sales system. This can't be achieved without the support of big data," Cai said, according to a report in the China Business News.
