Original title: The turbid "wine king" Wuliangye lost to Maotai for more than 380 billion market value in 10 years.
Chen guang
From WeChat WeChat official account: Chinese businessmen’s strategy
Wuliangye, the "wine king", used to be the most expensive wine, the most famous wine and the largest wine. Now, it is not even possible to get a gift.
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Recently, I visited an old friend who had a good thing. The other person had a good drink, so he planned to buy two bottles of Wuliangye "Puwu" as a gift. Unexpectedly, the owner of the acquaintance suggested that Maotai should be replaced because "Maotai is the most decent and Wuliangye may not be able to get it".
After listening to it, I suddenly felt that Wuliangye seems to be really not at the same level as Maotai: in the past two years, on the so-called tall scenes and tables, there were mostly Maotai and few Wuliangye.
The boss offered a "conscience price" of 1,400 yuan for Maotai’s 53-degree flying, which exceeded the "red line" of Maotai.
In April this year, Maotai introduced the "strictest" dealer punishment system, vowing to control the retail price of 53-degree flying below 1,300 yuan.
But this system is not easy to use. Out-of-stock, price increase, purchase restriction, spike … Under the price control, Maotai constantly staged dramas that dissatisfied consumers.
Physical stores either raise prices or hoard goods, and online malls are out of stock for a long time. Even if they are "photographed" at the price of 1299, they have to pay a delivery fee higher than that of 200 yuan, but the actual price still exceeds the "red line".
It is even more reported that the price of goods taken by retailers in some areas has already passed the 1500 yuan mark.
There are many analyses and even conspiracy theories about the shortage of Maotai, but in any case, it at least shows that more and more consumers recognize Maotai and are willing to spend a lot of money on it.
A few years ago, the public was still worried that there would be no Maotai after the "eight regulations", but unexpectedly Maotai became more "Maotai".
On the other hand, Wuliangye, which was "despised" by the store, was quite embarrassed.
This year, Wuliangye has adjusted its price twice, once led by the company and once "said to be" led by the market. After adjustment, the retail prices of Wuliangye "Puwu" and "1618" are all around 900 yuan, but the price of e-commerce platform shows that the promotional price of Puwu is 899 yuan, and the order enjoys 40 yuan discount, and the transaction price is only 859 yuan.
In the offline market, according to the unproven statement in the industry, some retailers of Wuliangye still have the phenomenon of upside down, that is, the purchase price is higher than the sales price.
The gap between the two is quite emotional, but where does the gap come from?
Maotai is Maotai-flavor, Wuliangye is Luzhou-flavor. In China, Luzhou-flavor liquor has a wider audience, and there is also a ridicule in the market all the year round that "those who drink Maotai never buy it, and those who buy Maotai never drink it". In the fierce competition of Luzhou-flavor market, no one can have the taste of Wuliangye, which is the consensus of many good drinkers.
Therefore, it is certain that even if the quality is poor, the gap will not be so big.
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For Maotai and Wuliangye, the most important asset is the brand, and the difference between Maotai and Wuliangye is also a very important reason. In the past year or two, this gap has become more and more obvious.
It can even be said that after several years of advance and retreat, Maotai has completely opened Wuliangye.
The appearance of brand difference is that high-end banquets and even many family gatherings drink Maotai; When it comes to the company’s operation, it is increasingly disparity in profitability and company value.
In 2016, Maotai achieved a revenue of 38.86 billion and a profit of 16.72 billion. In 2017, Maotai continued to explode, and both revenue and profit in the first quarter increased by over 14% year-on-year.
On the other hand, Wuliangye’s revenue in 2016 was 24.54 billion, its net profit was only 6.785 billion, and its profit scale was only 40% of that of Maotai.
Reaction in the capital market, the gap between the two is more obvious.
In October 2007, the market value of Wuliangye was as high as 171.9 billion yuan, compared with 168 billion yuan for Maotai in the same period.
Ten years later, as of the closing of the market on July 25th, Wuliangye, which was proud of Maotai at the beginning, had a market value of only 212.2 billion, while Maotai was as high as 600.4 billion.
In this way, in the past 10 years, the market value of Wuliangye has lost more than 380 billion to Maotai.
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This is really, where there is contrast, there is harm.
Because of this gap, Wuliangye’s performance in the capital market has been criticized, and even some investors cursed "being trapped by Wuliangye for 10 years".
There is also a ridicule in the capital market: holding Maotai for 10 years, how many times have you made a profit, and holding Wuliangye for 10 years, you have no sleep.
The so-called deep love and responsibility, even so, there are still many investors who have consistent expectations for Wuliangye, thinking that it is the lowest-valued brand in global food consumption. Investment institutions have repeatedly said that it can "reach 300 billion yuan", and investors also think that its market value should be at least half that of Maotai.
Unfortunately, the "half" never came.
Time is the real touchstone, it can make the superior and the subordinate exchange places. The technology industry is considered to be changing with each passing day, and even if it is stronger than Nokia, there is a risk of rollover. However, what the world often ignores is that even in the most traditional industries, the alternation and overturning of brands has suddenly become the trend of water under the bridge.
In the past 20 years, Wuliangye was the trump card of China wine industry. When Maotai was immersed in the name of "national wine", Wuliangye’s annual revenue was five times.
At that time, Wuliangye was the most expensive wine, the most famous wine and the largest wine, which was called "the king of wine" by public opinion.
However, the wine king is becoming turbid.
The grand scene of "thousands of miles of warblers singing green and reflecting red, and the wind of wine flags in the water villages and mountains" has suddenly become like "a glass of wine in the spring breeze of peaches and plums, a lamp in the rivers and lakes for ten years".
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Sichuan wine is the best in the world, and the essence is in Yibin.
The warm and moist environment in Sichuan has created the strong aroma of Sichuan wine, and Wuliangye is one of the most fragrant.
In 1915, Wuliangye crossed the ocean and went to the Panama World Expo on behalf of China Liquor, which attracted much attention. After the reform and opening up, it grew rapidly in the market economy and became the first brand in Sichuan.
The development of Wuliangye is inseparable from its ancient brewing method and the key promoters. Today, when Wuliangye is mentioned, many people will think of Wang Guochun, the former chairman of the group, at the first time.
In the industry, Wang Guochun is a mixed character. But regardless of the merits and demerits, without Wang Guochun, there may be no "wine king" of Wuliangye.
In 1985, 39-year-old Wang Guochun became the director of Yibin Wuliangye Winery, and since then he has been in a "ruling" career for 22 years. When Wang took office, Wuliangye was only a medium-sized local winery. When he left office, Wuliangye was enjoying the last glory of the "wine king".
Wang Guochun is bold and knows the market. For a long time, other wine brands can only follow in his footsteps.
For example, in 1989, Wuliangye took the lead in raising prices, which directly laid the price system of liquor industry. At the same time, Maotai still stays in workshop-style production, and even the "national first-class enterprise" that the State Council participated in failed to pass.
During Wang Guochun’s tenure, he left many similar decisions and stories, among which the buyout management system and the OEM authorization system derived from it were the most critical and most influential.
This system once helped Wuliangye sweep across the world, but it has become its present shackles.
In 1992, Wang Guochun took the lead in introducing the buyout management system into the liquor industry, and distributors in various regions were able to do all the work. They bought goods from wineries at preferential prices, and constantly explored the market with great enthusiasm, supplemented by fierce brand offensive. Wuliangye soon blossomed everywhere and captured the national market.
In just two years, the price and scale of Wuliangye surpassed that of "Fen Lao Da" in an all-round way, and the name of wine king came from this.
After several years of rapid development, Wuliangye borrowed the power of capital.
On April 27th, 1998, Wuliangye was listed on the Shenzhen Stock Exchange, with an opening price of 29.77 yuan, which was quickly promoted to 57 yuan.
At that time, Maotai’s sales were only 800 million, and its market share was only 0.01%.
The 53-degree flying Maotai, known as the "classic national wine", has a unit price of only about 200 yuan, which is dozens of yuan cheaper than Wuliangye’s "Puwu". And even if the price is the highest, the "Puwu" is still in short supply.
At that time, no matter the brand image, price and scale, Wuliangye was riding the dust.
However, the ambition of this company is not only to become the boss of high-end wine. In other words, the status of local state-owned leading enterprises determines that it cannot be limited to single products and wait for natural growth.
In order to pursue scale and profit, Wang Guochun has launched a series of diversified operations, but most of them ended in failure. However, Wang Guochun has made quite successful innovations around the brands of liquor and Wuliangye.
Wuliangye is a high-grade wine, and there is still a lot of room for development in the middle and low-grade fields. Focusing on this market, on the basis of buyout operation, Wuliangye launched a brand-new brand Wuliangchun, and with the help of Wuliangye’s production, this nascent brand quickly achieved great success.
Seeing the rolling interests, Wuliangye has successively bred brands such as Wuliangchun, Jinliufu, Liuyang River and Jingjiu, all of which have gained fame and fortune.
It was also the most glorious era of Sichuan wine. With the east wind of Wuliangye, the output value of Sichuan wine industry is increasing day by day, and GDP and profits are rising …
However, everything has two sides. These brands are all stained with the light of Wuliangye and let Wuliangye brand. The more successful they are, the more Wuliangye will earn. However, in the process, the value of Wuliangye’s main brand has been repeatedly diluted.
Buy-out operation, brand authorization (OEM production) and listing, all of which will praise Wuliangye to the sky and drag it back to the ground in the future.
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Jinliufu and Liuyang River are survivors of Wuliangye brand system, and their numerous "brothers" are filled with a large number of unfortunate people who drowned.
How many OEM products does Wuliangye have? This problem was once a mystery in the industry.
The success of Jinliufu triggered a wave of liquor buyout, and buyout operation became Wuliangye’s treasury for mining wealth. It has been reported that even Wang Guochun, who started the OEM mode, can’t figure out how many sub-brands and Sun brands there are.
According to statistics, from 2000 to 2003, there were thousands of foreign authorized brands of Wuliangye.
But not all those who are in contact with Wuliangye have a good life. There are more and more OEM products with the same price, the competition is becoming more and more fierce, bloody hand-to-hand combat can be seen everywhere, only a few survive, and most of them have already died.
Even the survivors are not comfortable.
A few years ago, it was reported that many Wuliangye OEMs and self-operated brands did not make money, and the biggest profit was to get Wuliangye wine to sell. Wuliangye has policy support for these OEMs. If the order exceeds a certain amount, a certain amount of Wuliangye wine will be presented at the ex-factory price.
Whether the OEM is doing well or not, Wuliangye need not worry, because its related profits are extremely stable. The OEM bought out the brand and had to go to Wuliangye’s packaging factory to buy packaging. The price quoted by the factory is said to be several times that of the same price wine.
At the same time, Wuliangye requires OEMs to maintain a 30% increase in the annual order volume, which has caused many OEMs to have a serious inventory backlog, and indigestible brands can only wait for death quietly.
Relying on the development of a large number of branded products, Wuliangye’s sales and profits have been rapidly improved, but the value of its main brand has been continuously divided in this round of feast.
Many sub-brands of Wuliangye are concentrated in some regional markets and belong to big distributors. Wuliangye is only responsible for collecting money, producing and selling, and the big dealers are solely responsible for it.
Dealers think more about how to make money than to maintain Wuliangye’s brand image. Gradually, the bright and dark angle between Wuliangye, local wine enterprises and distributors gradually flourished, and the goodwill of its main brand was hit one after another.
To put it bluntly, liquor is selling brands. Wuliangye can produce so many sub-brands and Sun brands, and it is entirely dependent on the signboard of "Wine King". Once the main brand image is damaged, everything becomes a castle in the air.
Regrettably, Wuliangye has never got rid of the problem of brand value being diluted since the buyout operation.
The group has long understood the seriousness of the problem, but it has always been faced with a difficult situation.
For more than ten years, from "1+9+8 brand strategy" to "1+5+N" and then to "1+3+5", Wuliangye has always wanted to cut off its sub-brands, but there are still countless wines under the slogan of Wuliangye.
At the annual liquor fair, Wuliangye Legion is the largest, so that its sub-brands can be seen every two or three stations. Wuliangchen, Wuliangyuan, Fuxiyingmen and New Concept … All these wines are marked with the words Yibin Wuliangye Co., Ltd. without exception.
Although they belong to different companies, these brands employ almost the same designers-except for the brand name, their products have almost the same packaging as Wuliangye.
Enter Wuliangye and 52 degrees on the e-commerce website, and you will get a lot of search results. The word "Wuliangye" is always magnified in the most conspicuous place, but the prices of these products vary widely.
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Even if you buy "Puwu" online, the boss will repeatedly confirm with you. After all, in addition to these sub-brands, under the pure Wuliangye series, there are also a bunch of varieties such as 52-degree Wuliangye, treasured Wuliangye and Wuliangye vintage wine.
The more money you earn by OEM, the weaker the brand recognition of wine king. Today, 20 years later, the wine king is no longer as distinctive as before, and even the "Puwu" has gradually degenerated into ordinary.
In contrast, Maotai has always adhered to the 1+3 strategy, that is, one world-class Maotai, plus three key series of wines (moutai prince Wine, Maotai Welcome Wine and Laimao). Its flying Maotai, which has always held high, is unique and even becomes the only top brand in the minds of more and more high-end consumers.
Therefore, the saying that "Maotai is the most decent, Wuliangye may not be able to get it" has emerged, and it has increasingly become a consensus.
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Some people wonder: what is the big problem of brand dilution? Why not just cut off most sub-brands across the board?
It’s easier said than done.
For most enterprises that have been producing OEM products for more than 20 years and have long been integrated with their sub-brands, it is not easy to make a one-size-fits-all approach, and it is even more difficult for Wuliangye.
There have been rumors that the internal and external interests of Wuliangye are intertwined and outsiders can’t sort it out at all. Qualification of brand authorization and contact with some senior executives; It is a trade-off between big distributors selling Wuliangye and their own brands; Local wineries are inextricably linked with Wuliangye; Even the possible interest transfer …
These complex lines are interwoven into a dense net, and internal forces can’t open it at all.
To take a step back, even if these rumors are slander, only from the visible results, cutting off the sub-brands across the board will not only affect the scale and profit of Wuliangye, but also affect the local industrial output value and GDP. Who will bear this responsibility?
Wuliangye is not only Yibin’s city name card, but also plays a vital role in the economy of Sichuan province: Wuliangye has always been the most important profit in the large state-owned enterprises controlled by Sichuan State-owned Assets Supervision and Administration Commission.
For Yibin municipal government, the importance of Wuliangye can be imagined. Therefore, when this huge ship fell into a situation of slow growth, the local government was more anxious than anyone else and was eager to make changes.
No one can resist this will, even Wang Guochun, who has been in power for 22 years.
On March 21st, 2007, Wuliangye announced that Tang Qiao, former vice mayor of Yibin, would take over the post of chairman of Wuliangye in Wang Guochun. After a paper announcement, Wang Guochun era ended and Wuliangye entered Tangqiao era.
"The government wants to promote the reform of Wuliangye through external forces. The internal power of Wuliangye is very complicated, and it is difficult to break the existing interest pattern by relying on internal strength. " An industry insider analyzed.
Tang Qiao took office at the dusk of the wine king. Soon after he took office, Maotai’s annual net profit and market both surpassed Wuliangye, and the gap widened, even though its overall scale remained ahead.
In 2012, Wuliangye’s revenue was still slightly ahead of Maotai (27.201 billion vs. 26.455 billion), but two years later, Maotai not only surpassed Wuliangye by 10.563 billion in revenue, but also made a net profit of 2.5 times.
Because of these figures, public opinion is not friendly to Tangqiao, but many things cannot be changed by individuals.
When the great ship slowed down, the previous downstream became a countercurrent. Wuliangye’s big distributor system is based on high growth and high profit. When the profit drops, everyone has a hard time.
In the retail market, the price of Wuliangye began to appear generally upside down, and it was difficult for dealers to make money. Wuliangye also has a policy support for dealers, that is, a certain amount of Wuliangye liquor can be obtained at the end of the year after completing a certain sales volume. In order to earn rebates, many dealers have to sell or even sell goods at low prices, which leads to chaos in their distribution system.
Even so, it is still not feasible to cut off sub-brands on a large scale. After all, local state-owned enterprises can not pursue profit growth, but they must pursue scale and taxation. Therefore, while cleaning up the old sub-brands, Wuliangye expands new sub-brands. In the end, it is unclear whether it will increase or decrease.
More importantly, after handing over the position of the first brother of liquor to Maotai, even if other brands are cut off, it is difficult to get back the former wine Wang Rongyao.
With the market value and sales in trouble, once small problems have become big problems.
Investors questioned the existence of huge related transactions between Wuliangye’s listed entities and the group. When Wuliangye went public, it only put the assets of brewing into the listed companies, but not the base wine, processing, packaging materials and sales, which led to a large number of related purchases and related sales between the subsidiaries of the group and the listed companies.
"Related party transactions will lead to unclear interests and easy profit transfer." A securities analyst said.
Following this line, investors turned their anger to Yibin municipal government, complaining that Wuliangye is the ATM of local government and even some groups, but it is only the minority shareholders.
The background of such complaints is: In the past 16 years, the old rival Maotai paid a total of 43 billion dividends to shareholders.
Even competitors are eager to label Wuliangye: the opaque and chaotic distribution system of China Liquor today is inseparable from the buyout operation led by Wuliangye in those days.
Tangqiao failed to reverse this decline.
On March 30th, 2017, after the "Ten Years of Tangqiao", Wuliangye announced the change of coach, and Li Shuguang, deputy director of Sichuan Economic and Information Committee, became the new successor.
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Li Shuguang is 55 years old and has no previous experience in wine industry.
Can this former bystander see more clearly? Everything is still unknown.
But in front of Li Shuguang, there is a tense situation that can’t be wasted for a moment: Maotai is still developing rapidly and has become the world wine king in market value; Behind Wuliangye, Yanghe is pressing, and LU ZHOU LAO JIAO CO.,LTD is also rubbing his hands.
Wuliangye hopes to make a change.
The first task of change should be to reshape the brand.
In March 2016, Zhu Zhongyu, deputy general manager of Wuliangye Co., Ltd., talked about an important issue for the first time: the new normal of liquor is to reduce government intervention in the market and stop blindly pursuing extensive management of sales scale.
At the end of the year, Wuliangye cleaned up 300 products at one time.
In July 2017, it was reported that 18 series under the Group would withdraw from the historical stage …
If the reform is thoroughly promoted, Wuliangye may face pain, but such a change is imperative, because the confidence of dealers and consumers in Wuliangye’s brand has reached an extremely critical node.
Under the general trend of consumption upgrading, more and more consumers will pay for the brand. It is for this reason that Maotai has thrown Wuliangye further and further, enjoying a premium from products to capital markets.
If Wuliangye continues to decline like it did in the past 10 years, under the siege of more and more pursuers, the wine king may not even be able to keep the position of the second child. Once that happens, Wuliangye will lose itself completely.
No one wants to see the wine king continue to decline, whether it is the people of Sichuan, the national liquor lovers, or the investors who are waiting for it in the capital market.
So do I. My father treasures some old Wuliangye, and I don’t want to see them even given as gifts, so I have to think twice about "whether it’s not bashful".
Perhaps it is because of the decline of Wuliangye. Recently, Langjiu, who is also a Sichuan wine, directly released wild words, and it seems that Wuliangye has long been ignored by it.
More stories behind this and the whole liquor industry will be broken down for you in the future. Let me show you how this industry, which is the oldest and most related to the general public, has evolved in the new era when people’s eyes are focused on cutting-edge technology industries such as artificial intelligence and cloud computing.
Consumption upgrading is a big core of the future economy. I believe that the ups and downs of these wine brands will also have reference and reference significance for the whole consumer goods industry.
