In China's liquor consumption market, the Guangdong-Hong Kong-Macao Greater Bay Area Economic Circle is not only an important strategic market, but also a "lookout" for liquor to go overseas. The population, economic aggregate, consumption capacity, and food and beverage consumption in the Greater Bay Area all provide an excellent environment for the liquor consumption market. However, last year, the liquor market showed a scene of "hot outside and cold inside", so what are the characteristics of liquor consumption in the Guangdong-Hong Kong-Macao Greater Bay Area, which is a highland of consumption?
In order to gain insight into the consumption trend of the liquor industry in the Guangdong-Hong Kong-Macao Greater Bay Area, under the guidance of the Guangdong Liquor Industry Association, the Nandu Bay Finance Society-Liquor New Consumption Index Research Group officially launched the "Bay Area Liquor Price" index product in March last year.
The research team takes national famous liquor brands such as Kweichow Moutai, Wuliangye, Guotai, Yanghe, Luzhou Laojiao, Xijiu, Langjiu, and Guangdong liquor brands as the main targets, and regularly publishes the average retail price of each brand in the Greater Bay Area and the liquor consumption market in the Bay Area on the WeChat public account of Nandu App "Bay Area Liquor News" and "Bay Liquor Observation", so as to present the price fluctuations of famous liquor more intuitively and comprehensively.
As of December 31 last year, the research group has compiled and released a total of 22 issues of "Bay Area Liquor Prices", from which the price trend of famous liquor products and the new highlights and trends presented by the liquor consumption market in the Bay Area have also been discovered.
In terms of overall price trends, the average retail price of the sampled wines fluctuated significantly last year. Among them, the "wind vane" of the liquor industry, Kweichow Moutai (hereinafter referred to as Feitian Moutai), has fluctuated significantly, with the highest average price exceeding 3,000 yuan/bottle, but also falling to 2,700 yuan/bottle; in terms of high-end price bands, the prices of the eighth generation Wuliangye and Qinghualang once fell to 1,000 yuan/bottle, and then the price rebounded, and the prices of Guojiao 1573 and Junpin Xijiu continued to fall, and the current average price hovered around 1,000 yuan; Qinghua Fen 20 remained stable, and the price of abstract treasures continued to decline.
Traditional channels
The price of supermarkets is high, and the retail price of dealers is often "broken"
Offline supermarkets are the traditional channels for wine sales, and they are also a window to observe the trend of alcohol prices offline. In this regard, the research team used RT-Mart, Wal-Mart and China Resources Vanguard as the main collection channels for sample prices in Guangzhou and Shenzhen.
Taking the three major terminals in Guangzhou as an example, RT-Mart products are sold at the recommended retail price, Wuliangye and other products are sold at the recommended retail price; Wal-Mart has more fluctuations in the prices of various types of liquor, but the discounts at nodes such as "Double 11" are larger; and the prices of some sample liquors have remained stable at China Resources Vanguard. In Shenzhen, there are more preferential subsidies, such as China Resources Vanguard, which has weekly preferential measures for wine in Shenzhen, such as superimposing full reductions and other indirect wine prices, while Wal-Mart, RT-Mart and other sample wine prices still maintain stable sales.
However, the research team also noticed that due to the influence of factors such as channel purchase fees and the layout of wine companies, these three major supermarkets have not been able to fully cover the samples, such as RT-Mart, Wal-Mart and other most of the medium-priced wines that have not broken 1,000 yuan, and some high-end wines of China Resources Vanguard are out of stock or not distributed.
Of course, in the traditional liquor sales channel, the role of distributors plays a pivotal role. Although the price system of distributors is mainly measured by the wholesale price, the terminal selling price will also affect the wholesale price in turn, so from the first phase of the wine price, the research team selected two distributors as the object of price statistics.
Since 2023, the batch price of Feitian Moutai has fluctuated greatly, for example, in the first phase of wine price statistics, the retail price of Feitian Moutai given by dealers was 2,900 yuan/bottle, and when it came to the 10th period of wine price (June), the retail price went to 3,000 yuan/bottle, but as it began to fall in September, the price once fell to 2,799 yuan/bottle. Judging from the latest quotation of the current distributor, the current retail price of Feitian Moutai is about 2,800 yuan per bottle.
In fact, in the liquor industry, except for Feitian Moutai, other liquors are basically sold below the recommended retail price, and from the retail price quoted by the distributor, it is easier to reflect the real price of the product in the market. In the 22nd phase of liquor price statistics, a number of liquor products in the sample showed a "roller coaster" price decline.
Taking Guojiao 1573 as an example, the price of this product in the dealers continues to decline, among which the price of Guojiao 1573 is about 969 yuan/bottle in the latest 22 periods, and the price of Junpin Xijiu falls below 1000 yuan earlier, according to the statistics of the research group, from the 6th phase of wine price statistics in April 2023, the product has dropped to 999 yuan/bottle. In addition, last year, the market has been generally reflected in the summary of rare wine, its price has been running at a low level, starting from the 18th wine price statistics, the retail price of rare wine in the dealer channel is about 620 yuan / bottle.
Overall, the retail price provided by dealers is relatively lower than that of other sales channels, especially in terms of prices for mid-to-high-end products, which have advantages over other channels, but from the perspective of price support, dealer channels are more likely to break prices and even price inversions.
Online e-commerce channels
The price of traditional e-commerce is stable, and the price of new retail in the community fluctuates greatly
In the online e-commerce channel, the research group used traditional e-commerce platforms, wine e-commerce platforms and community e-commerce as sampling platforms for statistics.
In terms of traditional e-commerce, the research team chose the brand flagship store of the sample liquor, so the product price remained relatively stable.
On the whole, the alcohol prices of Tmall and JD.com were stable in the first 16 periods of Bay Area wine prices, and the price fluctuations were small. However, in the recent 6 phases of wine prices in the Bay Area, due to various e-commerce activities and festivals at the end of the year, the prices of high-priced and medium-priced wines have been significantly reduced. Taking Junpin Xijiu as an example, in the previous periods, most of its prices ranged from 1100 to 1200, and in the past 6 periods of Bay Area wine prices, the price of Tmall and Jingdong platforms has obvious banners, especially in the past 3 periods, its price has dropped to less than 1,000 yuan. At the same time, this is also the only high-priced wine in the Tmall Jingdong channel that has fallen below the 1,000-yuan mark within the scope of observation.
In terms of wine e-commerce, the research team used 1919 and Huazhi Liquor Store as the sample price statistics platform, and the merchants stationed in it operated in the mode of "offline stores + online", and some stores had the background of distributors, so the retail price of the sample wine was of reference significance for the value of related wine in the market.
According to the data, in the 22nd period of wine price statistics, the price effect of Huazhi Liquor Store is obvious, and the quotation of some of its wines is basically in accordance with the recommended retail price, for example, the eighth generation of Wuliangye, in the 22nd period of wine price statistics, the external retail price is 1499 yuan / bottle, and there is no price fluctuation.
The price of another alcohol e-commerce platform, 1919, is slowly declining. For example, the price of Junpin Xijiu remained at about 1,100 yuan/bottle in the first 11 periods, and the price has dropped to about 1,000 yuan/bottle in the last 11 periods.
In addition to the above two platforms, community new retail has become a new channel for residents' alcohol consumption. Starting from the 11th issue, the research group will use Seven Fresh and Hema as statistical platforms, and from the 22nd issue, the Pupu supermarket platform will be included in the new retail terminal of the community for statistics.
For example, in the 15th phase of the wine price statistics, Guojiao 1573 was as low as 999 yuan per bottle, but the price has rebounded since the 16th period. In terms of Freshippo, the price of Gujing Gongjiu Gu 20 was as low as 688 yuan per bottle.
In the process of price statistics, the research team also noticed that the prices of sub-high-end and mid-range wines on the two platforms remained stable, but the pricing difference between the two major platforms of Guotai and national standard wine was large, the price of the product on the Qixian platform has been 599 yuan/bottle, and the price of the Hema platform is 399 yuan/bottle.
Trend review
High inventory causes price inversion, resulting in frequent terminal price fluctuations
Through the statistics of liquor prices in 22 phases, the research team found that the main reason for the large price fluctuations of liquor at the retail end last year was the instability of the wholesale prices of related products. Last year, due to factors such as high inventory and insufficient social purchasing power, the sales price of many high-end famous liquors was under pressure, and the upside-down tide of liquor intensified, which directly affected the performance of the terminal retail price of liquor.
In the case of price inversion, some products have terminal price confusion. According to the statistics of the 13th issue of "Bay Area Liquor Price" of Jiujiu Hongtan 20, the average retail price of this product in the market is 577.33 yuan, but in Hema Xiansheng, the arrival price of this liquor product is 379.5 yuan, compared with the retail price of 699 yuan in RT-Mart in Shenzhen and the retail price of 668 yuan in Wal-Mart in Guangzhou, the price of Hema is almost halved.
In fact, the reason for the decline or even inversion of the product price is related to the pressure that the winery puts on the distributors. According to the "2023 China Liquor Market Interim Research Report" released by the China Liquor Industry Association, many companies and distributors have still not been able to digest last year's inventory backlog. In this context, distributors can't keep up with the speed of the distillery's stockpiling, so in order to complete the distillery's task and recover funds, they can only release goods to the channel at a low price, and over time, there is too much wine in the market, and the distributors continue to dump, which eventually leads to a decline in product prices.
The research team noticed that last year, wine companies adopted a variety of ways to raise prices for products. For example, enterprises such as Langjiu and Shanxi Fenjiu have adopted methods such as stopping receiving orders to control the price of some products, and Jiannanchun, Luzhou Laojiao, etc., have raised the ex-factory price of some products. In addition to the price increase, some companies, such as Wuliangye and Shede Liquor, have alleviated the price inversion by reducing the prepayment of dealers or slowing down the payment collection.
However, industry players are taking a wait-and-see attitude.
Wang Chaocheng, chairman of Shengchu Group, said that although the consumption scene has recovered on a large scale, the recovery of high-end and sub-high-end liquor is far less than expected.
Song Shuyu, chairman of the China Liquor Industry Association, also publicly stated that the decline in consumption and the slowdown in the growth of high-end consumption have promoted the participation of leading enterprises in the product competition of the waist price band.
However, there are also positive voices in the market that inventory pressure is passing its peak. According to the analysis of Everbright Securities, as a vane to measure the strength of demand, in the third quarter of 2023, the year-on-year decline in revenue of some expanding sub-high-end liquor companies narrowed, and the inventory of distributors improved significantly compared with the same period last year.
Outlook for the coming year
Wine companies improve confidence, channels clear inventory, the Internet may become a "new force"
Under the influence of high inventory and price inversion last year, the retail price of liquor products will inevitably fall, so in 2024, will the aforementioned unfavorable situation change?
For wine companies, boosting the confidence of distributors has been a "compulsory course" this year.
At the end of 2023, major liquor companies such as Wuliangye, Shanxi Fenjiu, and Jiuguijiu Liquor will intensively hold dealer conferences, and successively set the tone for 2024 business strategies, channel play, marketing policies and good start strategies. With the holding of the Wine Business Conference, many wine companies are optimistic about the development in 2024 and have set their goals to achieve recovery growth.
The industry believes that the competitive trend of the liquor market this year will be dominated by destocking, and the sooner the liquor companies clear their channel inventory, the sooner they will take the lead in development. At the same time, in the case of high channel inventory, wine companies will be more cautious in raising prices.
For dealers, "clearance and inventory reduction" is this year's theme.
After the impact of the short recovery of the market at the beginning of 2023 and the subsequent long-term sluggish terminal inventory, this year will be more cautious about getting liquor products. On the whole, last year, under the high growth demand of wine companies, distributors frequently encountered channel pressure, which made distributors, especially small and medium-sized distributors, face great pressure.
The peak season is not prosperous, funds are tight, and inventory is high, which is the key to the weakening of dealers' willingness to pay. Among them, there are representatives of large wine companies on the wine companies, expressing the huge pressure that dealers are currently facing, Chen Guosuo, general manager of Jiangsu Sutang Sugar and Liquor Food Co., Ltd., once mentioned the huge pressure on the channel last year: "Now everyone is destocking, wine listed companies, including the head enterprises, are still making great progress, (financial performance) some are still double-digit growth." The more you grow, the more pressure we have."
Although the most of the month before the Lunar New Year this year is the peak of liquor sales, judging from the consumption price of liquor last year and the inventory of distributors, the inventory consumption of liquor during the Lunar New Year this year is limited, and the channels throughout the year are still dominated by destocking, and retail prices may continue to fluctuate.
It is worth noting that the Internet may become a "new force" in circulation.
The research team found that Internet channels may play a more important role in liquor sales this year, and the retail price of related liquor may be further affected in the future. According to the analysis of the research group, under the tightening of demand, the price advantage under the platform subsidy has well met the cost-effective consumption psychology, and at the same time, under the digital connection, the service ability of liquor production enterprises has been further enhanced, and the stickiness with consumers has been further improved.
It is also worth noting that the rise of Internet channels has given wine companies an opportunity to regain control of pricing power, among which Kweichow Moutai, Wuliangye, Yanghe and other leading wine companies have seen the growth of their Internet channels not to be underestimated. From this point of view, the extensive involvement of Internet channels is also expected to alleviate the problem of price confusion on the retail side, and the winery has a stronger ability to control the terminal retail price, and the retail price on the online platform may be more stable.
What is the performance of liquor prices this year, and what are the fluctuations of channel prices? Nandu Bay Finance Society-Liquor New Consumption Index Research Group will continue to update the "Bay Area Liquor Prices" product to present the latest liquor price trends in the Guangdong-Hong Kong-Macao Greater Bay Area to the public.
Producer: Southern Metropolis Daily Bay Area Financial News Center Liquor New Consumption Index Research Group
Curator: Wang Ying
Co-ordinator: Ma Jianzhong
Written by: Nandu Bay Finance Society reporter Bei Bei, Wang Jingjuan, Chen Yingshan, Qiu Kangzheng