On March 31st, "iMoutai" officially launched for trial operation, receiving over 2.29 million people and 6.22 million reservations for the "iMoutai" pre-order purchase within the first hour.
The launch of "iMoutai" has garnered significant market attention. On March 22nd, reports of Guizhou Moutai Group's new attempt at direct sales e-commerce rapidly fermented in the market. On March 28th, Guizhou Moutai's official Weibo account confirmed market speculation.
On March 30th, the "iMoutai" Digital Marketing APP was made available for download on both Apple and Android application markets.
Many consumers believe that securing a purchase of "Feitian Moutai" is harder than getting through the college entrance exam. The new chairman of Moutai has repeatedly stated that he wants Moutai to return to its commodity nature. Under this context, "iMoutai" came into being.
During the trial operation phase, consumers can reserve and apply to purchase four newly released products daily on "i Moutai": 53% ABV 500ml Guizhou Moutai Liquor (Year of the Renyin Tiger), 53% ABV 500ml Moutai 1935, 53% ABV 375ml 2-bottle set (Year of the Renyin Tiger), and 53% ABV 500ml Guizhou Moutai Liquor (Premium).
Consumers can apply for purchases at specialty stores in their area, but during the initial operation of "iMoutai," a specialty store's daily shipment of one type of liquor product is generally less than 15 bottles. In Zhengzhou, there was even a situation with fifty thousand people vying for four bottles of Moutai products, indicating high market heat.
The four Moutai products are priced at 2,499 yuan, 1,188 yuan, 3,599 yuan, and 4,599 yuan respectively on "iMoutai." Apart from the 53% ABV 500ml Moutai 1935, the other products are also considered high-priced within the Moutai product system.
Moojing Market Intelligence discovered that in 2021, the average sales price of Moutai's products on JD.com, Tmall, and Taobao platforms was 1,633.47 yuan, significantly lower than the price of liquor products sold on “iMoutai”.
On JD.com, Tmall, and Taobao platforms, sales of "Feitian Moutai" accounted for a high proportion of 45.93%; the sales of Moutai gift boxes, Moutai liquor, and Prince Moutai amounted to 16.46%, 13.79%, and 9.64% respectively. "Feitian Moutai" is the mainstream product series of Moutai, while the more expensive commemorative series has relatively lower sales.
Today's liquor price data confirm the popularity of "Feitian Moutai" and the scarcity of high-priced products. Data shows that the "Feitian Moutai" series has a rich category, mainly priced below 3,000 yuan. There are many types of sauce-flavored liquors, mostly priced within a thousand yuan. The circulation and category of Zodiac series liquors, fine or rare liquors, fifteen-year-aged liquors priced over 4,000 yuan are much less than "Feitian Moutai" and sauce-flavored liquors.
"Feitian Moutai" is the core product of Moutai, with an official guide price of 1,499 yuan. Taking the 53% ABV 500ml bottle of "Feitian Moutai" as an example, Moojing Market Intelligence data shows that in 2021, the average price of this product on mainstream online platforms was 1,666.18 yuan. The sales proportion for prices ranging from 1,000 to 1,499 yuan remained at 40%; the proportion higher than 3,000 yuan was also close to 40%.
"Feitian Moutai" has a high-profit margin and is the core business of Moutai, and also the focus of intense competition from various parties. "iMoutai" cleverly differentiates from "Feitian Moutai" to avoid disrupting the market supply and demand for "Feitian Moutai," which aligns with the mainstream market perception of avoiding excessive focus and speculation, and promoting the smooth launch and operation of the platform.
The "iMoutai" platform’s sale of high-priced products and new items has avoided direct competition with wholesale agents, and it also directs the demand for purchasing "Feitian Moutai" to twelve third-party e-commerce platforms such as Jiuxian.com, JD.com, Suning.com, and Secoo luxury, while balancing the market supply and demand for "Feitian Moutai" and laying a foundation for its successful operation.
This is not Moutai's first attempt at direct sales channels. In 2014, Guizhou Moutai established an e-commerce company. In August 2016, Moutai launched its official online store and WeChat store, while also entering major e-commerce platforms. At that time, Moutai sold its products at factory prices on direct sales platforms. Thereafter, Moutai rapidly increased its capacity, raising production from 37,000 tons to over 60,000 tons, to support the development of direct sales platforms.
In 2017, Moutai's direct sales revenues grew rapidly, increasing from 34.85 billion yuan at the end of 2016 to 62.47 billion yuan; the volume sold also rose to 3,673.33 tons.
Moutai, which felt the profits from direct sales, subsequently faced some setbacks. According to reports, in October 2018, corruption emerged within Moutai, and several executives were taken down. That year, direct sales revenue plummeted to 43.76 billion yuan.
The new management team of Moutai did not entirely abandon direct sales. In 2019, Moutai's direct sales revenue rebounded to 72.49 billion yuan. In 2020, Moutai went even further, achieving direct sales revenue of 132.4 billion yuan with a volume nearly the same as in 2017.
Was the high gross margin of direct sales an important consideration for Moutai in expanding its direct sales channels? From 2017 to 2020, the gross margin rate of Moutai's direct sales channels steadily increased from 93.48% to 95.62% at the end of 2020, while the gross margin of wholesale agency channels never exceeded 92%.
Assuming all of Moutai's operating revenue in 2020 came from direct sales channels, the 4.82% higher gross margin rate could have brought Moutai an additional gross profit of 39.32 billion yuan.
Over the past years, Moutai has consistently leaned towards direct sales channels. By the end of 2020, the number of domestic Moutai Maotai-flavored liquor distributors had been continuously eliminated, leaving only 2,046, down by 31.32% from the 2,979 in 2017. The distributors’ sales volume also fell to 60,123.8 tons in 2020, the first decline since 2017.
Moojing Market Intelligence discovered that Moutai's sales on mainstream e-commerce platforms had contracted. In 2021, Moutai's combined sales on JD.com, Tmall, and Taobao's liquor category amounted to 89.45 billion yuan, a year-on-year decrease of 4.87%; the volume fell by 12.34% to 5.4758 million cases, a decline far exceeding the average level of 3.91% for the liquor category on e-commerce platforms.
It can be seen that the liquor market and Moutai's e-commerce channels both experienced a contraction in sales volume. Aside from the reason of a large base due to the rapid growth of online liquor market sales in 2020, under the background of supply not meeting demand, the decrease in sales volume of Moutai's e-commerce channels is more a result of brand adjustments and restrictions on channels.
Reducing reliance on wholesale agents is an important strategic move for Moutai Group. By creating a more transparent channel, Moutai can truly realize the vision of "giving everyone an opportunity to experience Moutai," thereby establishing a robust and lasting business model.
Raising the flag of direct sales once more, Moutai is reaching end consumers through "iMoutai."
As an important marketing model, the direct-to-consumer (DTC model) has the advantage that brands can bypass the wholesale agents and interact directly with consumers through direct sales stores, online shops, and mobile apps to stimulate purchases and accumulate customer base.
Although mainstream liquor brands rarely try the DTC model, the success of Mei Jian Qing Mei wine under Jiang Xiaobai's brand can be witnessed. Mei Jian relies on Jiang Xiaobai's bars to promote the Mini Program; all Mini Program "partners" can purchase Mei Jian products at the same price. Mei Jian also regularly offers core user experiences, directly reaching consumers to improve products while accumulating customer resources.
Through the success of the international top luxury brand Louis Vuitton under the Direct-To-Consumer (DTC) model, we can deeply perceive the profound business objectives of Moutai.
Louis Vuitton primarily focuses on offline physical retail, sticking to a full direct sales model. Taking its fashion leather goods department as an example, in 2020, the proportion of sales through direct channels rose to 74%, leaving only 25% to wholesale and agency channels. Its fashion leather goods are sold offline in more than 470 exclusive stores worldwide; online, it adopts the DTC model, selling to registered users on the brand's official website, the subsidiary brand e-commerce site 24S, WeChat official accounts, and mini-programs.
Louis Vuitton's direct sales model can effectively control the supply of goods and maintain the scarcity of luxury products. Whether visiting the official website, WeChat, or an offline exclusive store directly, Louis Vuitton can reach consumers immediately, helping to establish a close connection, enhance customer loyalty, and improve brand value.
For Louis Vuitton, online channels are more for spreading brand value and enhancing customer relationship management. Sales growth is driven by brand value, while relying on brand influence to continuously promote high-value categories, new categories, or sub-brands to the market.
Although Moutai has never publicly acknowledged it, it has exhibited strong luxury attributes in seven aspects: high quality, controlled supply, high pricing and high profits, investment collection value, strong cultural identity, social value, and symbolic significance. "iMoutai" itself also shares similarities with Louis Vuitton's official website and WeChat mini-program.
"iMoutai," while rolling out high-priced products, also encourages mobile users to register, building close connections with potential mobile internet customers. After tapping into the mobile internet channel, the phenomenon of Moutai's aging customer base will be somewhat relieved. More importantly, "iMoutai" helps to reach new younger customer groups.
In the future, Moutai can introduce fashionable elements in packaging and bottle design; the capacity can become smaller to gain favor from younger customer groups. Although the income of the current young customer group may not be sufficient to afford Moutai. After a long period of market cultivation, as the young customer group matures, they are more likely to recognize the brand value of Moutai and become an important customer group for Moutai. Therefore, "iMoutai" can achieve the accumulation of young customer groups and the optimization of the overall customer base structure.
After determining the strategy, how Moutai implements, executes, and drives it is the real challenge. The first thing to consider is the traffic problem of the "iMoutai" platform.
With more transparent pricing, an online reservation system for pickup, and the influence of the Moutai brand, "iMoutai" has already gained significant traffic.
On March 30th, the Beijing Business Daily discovered that the "iMoutai" app had topped the Apple free app market rankings.
In terms of market heat, after the incident where "Pan Changjiang claimed to have gotten cheap Moutai by getting the Moutai chairman drunk," the related search volume for Moutai significantly increased on March 28th and 31st. Data from Moutai's official WeChat account shows that in the first hour of going online on March 31st, over 2.29 million people with 6.22 million participations made reservations to purchase.
Moutai officially announced that the overall subscription success rate for the four products on the first day was 0.42%. The difficulty of winning the draw was 2.4 times higher than the pass rate for the Chinese national civil service exam. In Zhengzhou, a store witnessed a frenzy with over 50,000 people scrambling for 4 sets of 53-degree 375ml double bottle packaged (Year of the Tiger) Moutai liquor, sparking a new round of heated discussion in the market and media.
Moutai's official WeChat won't miss out on this market enthusiasm, publishing related information about "iMoutai" on the front page for five consecutive days. With the market fermenting, Moutai may have already reached out to and accumulated the highly sought-after young mobile internet customer groups, thus breaking into a new market space and finding its own blue ocean.
After solving the traffic problem, the next step for Moutai may be to continually improve its product system based on consumer demand. In the more distant future, Moutai may rely on "iMoutai" to create high-priced product series and sub-brands similar to "Feitian Moutai," and even launch cross-industry products, thereby driving the development of the entire industry chain and expecting to reach new heights soon.
Of course, for "iMoutai" to achieve growth in its customer base, it needs time to accumulate, and the external environment also plays an important role. "iMoutai"'s distinction from "Feitian Moutai" can avoid competition with wholesale agents, and future products will also need to balance self-sales with wholesale agency relations. In addition, "iMoutai" still needs to solve the consumer problem of "difficulty in purchasing Moutai," to avoid operational issues caused by negative market reputation.
