Liquor maker ramps up efforts in overseas markets

Shanxi Xinghua Cun Fen Chiew Group, a leading Chinese liquor maker, is ramping up efforts to expand its presence in overseas markets and drive its digitalization push to combine online and offline sales channels, said company Chairman Li Qiuxi.

"We will increase support for overseas dealers this year, and vigorously promote the construction of multichannels, such as expanding sales in tax-exempt markets and cross-border e-commerce platforms, so as to hedge against the negative impact of the COVID-19 outbreak," Li said, adding the company is accelerating its globalization expansion.

The official said that apart from boosting the sales of Fen Chiew and Zhu Ye Qing Chiew, two famed Chinese traditional liquors, in overseas markets, the company will intensify efforts in the R&D of tailor-made products, such as a cocktail that uses Fen Chiew as its alcoholic base.

Li said the company added duty-free stores in three countries and regions in 2019. Its sales network covered the major airports in Asia, and the firm launched six types of liquor products targeting the economies participating in the Belt and Road Initiative.

As a representative of Chinese mild flavor liquor brand, Fen Chiew Group has seen its sales revenue reach 11.88 billion yuan ($1.7 billion) in 2019, an increase of 25.79 percent year-on-year. Its net profit attributable to shareholders of the listed company was 1.939 billion yuan, up 28.63 percent year-on-year.

Fen Chiew Group is also reforming its traditional retail channels through digitalized methods like expanding its presence at e-commerce sites, where its transaction volume reached 291 million yuan last year, Li noted, adding they have also beefed up efforts to expand its footprint across the nation.

He added more efforts should be made to strengthen their scientific research capabilities, improve the quality of liquor products, and explore the application of intelligent manufacturing, smart factory, big data and artificial intelligence to improve operational efficiency.

Data from the ASKCI Consulting Co showed the revenue of China's liquor industry rose from 536.4 billion yuan in 2018 to 561.8 billion yuan in 2019. The proportion of mid-and high-end liquor products continues to increase.

A report from market research firm Nielsen said that as one of China's traditional industries, the main purchasers of liquor have long been recognized as older consumers.

In recent years though, the rise of new consumption forces and the public's affirmation of Chinese traditional culture meant liquor enterprises should pay more attention to the cultivation of young consumption groups.

The overall demand for liquor is recovering at this time, but the competition in the mid-end market is fierce along with upgrades in consumption, said Liu Peng, an analyst from TF Securities.

Liu added liquor companies should take a differentiated strategy to entice a new breed of consumers.