Author—Yu Zaiyang
With the release of the annual report of the listed company, some people read out a key message, that is, Kweichow Moutai is vigorously increasing the sales proportion of direct sales channels through channel reform, and in order to realize the "cage for birds" of sales channels.
Direct sales performance has been bullish
According to data, the proportion of direct sales of Kweichow Moutai has been increasing rapidly in recent years: among them, Kweichow Moutai's direct sales revenue in 2018 was 4.4 billion yuan, accounting for only 6% of revenue, from 2019 to 2022, its direct sales accounted for 8.5%, 13.95%, 22.63% and 39.79% respectively, and in 2023, the proportion of direct sales of Kweichow Moutai will rise to 44.7%, and the scale of direct sales revenue has expanded 15 times compared with 2018.
Judging from the annual report data and various actions in recent years, Kweichow Moutai has laid out direct stores, developed i Moutai, repeatedly cross-border joint ventures, and directly "fed" the top 500 domestic enterprises...... Behind the vigorous support of direct sales channels, although it also relies on the traditional distribution channels that have been "carrying sedan chairs" for Moutai, the obvious consequence of Moutai's high-level changes to traditional channels is that in the future, they may objectively use the "east wind" of direct sales to overwhelm the "west wind" of dealers.
Kweichow Moutai's direct sales performance has been bullish, so some people say that Moutai's channel reform will eventually "overturn" traditional dealers through direct sales - in the future, will this result really occur?
Moutai channel, vacate the cage for birds
According to the latest data, Kweichow Moutai's main economic indicators maintained double-digit growth, and the words "performance exceeded expectations" were widely used in media reports.
Last year, Kweichow Moutai achieved a total revenue of 150.56 billion yuan, a year-on-year increase of 18.04%, and a net profit of 74.734 billion yuan, a year-on-year increase of 19.16%.
Dividends, production expansion, price increases, and continuous improvement of channel control are the signal lights for Moutai to stir up the capital market and come from several different latitudes. In 2023, Moutai's performance in the field of direct sales will soar, and in line with the company's channel reform, it is gradually achieving the goal of "changing cages for birds"——
Last year, Moutai's direct sales channel revenue reached 67.233 billion yuan, a surge of 17.854 billion yuan over the same period last year, accounting for 44.7% of Kweichow Moutai's total annual revenue, while traditional distribution channels only increased by 5.593 billion yuan in the same period, dwarfing performance. If this trend continues, Moutai's direct sales performance will soon surpass traditional distribution channels.
Three major crises must be faced head-on in the future
Looking into the future from the data, in the 2023 annual report, Kweichow Moutai's direct sales business not only overshadowed traditional channels, but also exposed all kinds of problems and contradictions existing in traditional channels. Among them, the increasingly obvious channel anxiety, price crisis, and crash risk have become the "three major crises" that Kweichow Moutai will have to face in the future.
The continuous increase in the proportion of direct sales business in Kweichow Moutai's total revenue can significantly improve the company's profitability, brand tension and consumption stickiness, and at the same time maximize Kweichow Moutai's control over the channel.
However, at present, the proliferation of fake Moutai in the market is still an incurable stubborn disease, after all, under the excess profits, counterfeiters will continue to take risks, seriously disrupting the order of the Moutai market, and at the same time, it has also brought anxiety to channels and consumers——
For distributors in the channel, it makes people anxious when the market is tight and there is no goods to buy, fake wine hits the market makes people anxious, and wineries use the direct sales model to grab cakes from traditional channels. For consumers, not being able to buy real sake makes people anxious, and not knowing where to buy safe sake is even more anxious......
Will prices still hold up?
In the liquor market, Moutai has always been a "hard dish" -- the spot price of liquor is firm and has been bullish for many years; in the capital market, the banner of "the most high-priced stock" has always been carried on the shoulders of Kweichow Moutai; Moutai's dealers hoard liquor, and their profits are comparable to gold, so they can live in strange goods; the market for Moutai's aged liquor is hot, and the legend that "a bottle of old Moutai liquor can be exchanged for a suite" is widely circulated in the rivers and lakes......
With the current economic environment, Moutai has stepped into the risk of "high places are not cold". Recently, there are two news worth paying attention to about Kweichow Moutai. One is that after the Spring Festival, the price of Moutai on the market has shown a downward trend: the original box of Moutai has fallen from about 3,000 yuan/bottle to the current about 2,800 yuan/bottle, and the bulk Moutai has fallen from about 2,800 yuan/bottle to 2,600 yuan/bottle after the Qingming Festival.
There is another one, Zeng Yu, the founder of Zeng Pintang and known as the "first person to collect old wine", said that the current Moutai has no collection value. Zeng Yu also predicted that the price of Moutai liquor may fall below 2,000 yuan per bottle in the future.
It is not only the spot price of Moutai that is no longer strong, but also the share price of Kweichow Moutai. Before the Qingming Festival, although Kweichow Moutai released an annual report with "performance exceeding expectations" and was ready to implement large dividends, Kweichow Moutai's share price was still "green" the next day. Next, on the first trading day after the Qingming "small long holiday", Kweichow Moutai's stock price had an "opening flash crash" - does this mean that Moutai can no longer withstand the pressure of the general environment, and the price of wine and stock prices will begin to "double fall"?
Crash crisis
To say that Moutai will collapse, those who are willing to believe it may not be able to find a few. But since Moutai has been given financial attributes by countless speculators, the risk of "thunderstorm" has actually been quietly planted - perhaps in the future, when there is an accident in the market, it must not be Moutai that will be thundered, but the "Moutai speculator" who hoarded Moutai in the process of price increase but had no time to sell it.
Those who do not want to believe that the Moutai market will collapse, they mainly rely on the resistance of the Moutai brand. Historical experience shows that in the face of the industry adjustment period, Moutai's resistance to decline is significantly higher than that of other brands.
But even so, please look back on history and see how Moutai performed at that time after the last round of industry adjustments that started in 2012 - that year, the market price of Moutai fell sharply from a high of more than 2,000 yuan in an almost "halved" way, and the batch price once fell below 900 yuan, and there was a short-term price inversion, that is, the market price was lower than the ex-factory price. At that time, the hoarders who had a large amount of Moutai in their hands but could not bear the pressure of the capital chain had to lose money and bleed and grit their teeth to cash.
I hope that history will not be repeated in this round of industry adjustment, or when it is staged, you have successfully escaped from the high-level pick-up!