Behind the recovery of the faucet, domestic wines seek to break the situation

Reporter Jiang Zheng reports from Zhengzhou

The performance of the leading domestic wine companies and the market as a whole is differentiated. A few days ago, Changyu (000869. SZ) released its 2023 financial report showing that its revenue and net profit have increased to a certain extent. However, according to the data disclosed by the China Wine Industry Association, the sales revenue and total profit of the national wine industry in the same period are still in a state of decline.

A number of wine industry observers told the "China Business Daily" reporter that the domestic wine industry is currently facing losses, wine consumption habits and consumption scenes are still in the cultivation period, and wine production has shown a downward trend since 2013, until last year, there was a weak recovery, but the overall scale is only about 20% of the peak.

Wang Dehui, an expert in the wine industry and general manager of Shenzhen Zhide Marketing Planning Co., Ltd., said that wine consumption has a lot to do with overall income and consumer perception. Only by integrating the wine consumption scene into the life and social masses can the fundamentals of this market be expanded. In this process, domestic wines need to improve their quality, form their own characteristics, form a more complete product structure, and gradually establish their own brands.

In fact, domestic wines have achieved certain results in top-level design, and have formed a number of mainstream production areas and wineries, and actively explored in industry standards, marketing and brand building.

Market fragmentation

Changyu, which has not yet recovered to its peak, will usher in a recovery in 2023. According to the financial report, Changyu will achieve revenue of 4.385 billion yuan in 2023, a year-on-year increase of 11.89%, and a net profit of 532 million yuan, a year-on-year increase of 24.2%. Before 2023, Changyu's revenue has declined for five consecutive years.

The reporter noted that the recovery of leading enterprises has not reversed the overall decline of domestic wine. According to data disclosed by the China Wine Industry Association, in 2023, the national wine industry will complete a total output of 3 billion liters of winemaking, a cumulative sales revenue of 9.09 billion yuan, and a total profit of 220 million yuan. Among them, sales revenue and profit have been declining for many years.

According to the reporter's statistics, since 2019, Changyu's net profit (1.141 billion yuan) exceeded that of the industry (1.015 billion yuan), and the profit gap between the two has always existed.

Yang Zhengjian, dean of WBO Wine Business School, told reporters that the overall profitability of mainland wine enterprises is not optimistic. At its peak, there were about 244 domestic wine enterprises above designated size, and only 104 are left.

According to the data provided by Qichacha to reporters, there are 16,400 wine-related enterprises in China. From 2021 to 2023, a total of 3,161 companies will be revoked. In terms of new registrations, since 2020, the number of registrations has been declining, but the decline has slowed down in the past three years, with 343 new registrations in 2023, a year-on-year decrease of 25.92%.

Chongqing wine distributor Cui Yongqiang (pseudonym) told reporters that the domestic head brand has declined seriously in the local market, and the imported wine he represents has fallen off a cliff. "Over the past three years, the local wine consumption climate has had a big impact. Many vintners have turned to liquor or craft products. ”

Zhang Tao originally ran a wine business in Pingdingshan City, Henan Province. In the most popular years of soy sauce wine, it switched to selling liquor, and at present, wine products are in a state of liquidation.

Wang Dehui mentioned that other liquor brands are squeezing the market for wine. On the one hand, it is to snatch away the end consumers, and on the other hand, it occupies the funds and channels of the original wine market. "In the past few decades, although domestic wine has undergone some development, the consumption habits of the Chinese market have not yet been formed. Wine consumption is closely related to economic income, and wine drinking culture is a product that is not easy to popularize. In addition, changes in the market affect domestic wine consumption. The number of domestic wine consumers has decreased, and the consumption scene has weakened. ”

How to break the game?

In recent years, due to the strength of foreign wines and the relatively short history of local development, domestic wines have faced problems such as insufficient popularity, cumbersome drinking procedures and excessive Westernization of cultural transmission.

Cui Yongqiang was deeply touched by this. He mentioned that for a long time in the past, wine manufacturers and distributors had misunderstandings and blindness when guiding consumption, and overemphasized the ritual and high-end sense of wine. "The higher the wine drinking scene, the more constrained the consumer and the basic plate of wine. ”

Yang Zhengjian believes that taste is the enemy of traffic. If you focus on taste, there will be problems in the flow and market of wine. The price of domestic wine is not close enough to the people, the consumption scene is relatively narrow, and the product has not been localized, and the appeal of domestic consumers for sweet taste has not been paid enough attention. He believes that a large wine consumer needs high-end products, and more importantly, it needs to have popular, entry-level ration wine, so as to form a high-end leading, low-end and high-end market pattern. There are some large wines on the mainland market, but the quantity and scale are far from enough.

"When the market is not popular enough, it enters personalization and premiumization prematurely, resulting in the shrinkage of the domestic wine market. Yang Zhengjian said.

A number of industry insiders said that more and more wine companies have begun to attract and cater to consumers in terms of product proximity, down-to-earth promotion mode and multi-social platforms, so as to expand the wine consumer base.

For example, Changyu said in an interview with the media that the Cabernet business unit will hold 87,000 banquet promotions in 2023, an increase of 55,000 from the previous year.

A number of the above-mentioned industry insiders said that the current wine industry is showing a weak recovery. According to the research of WBO Wine Business School, some liquor distributors have begun to gradually increase wine products to meet various customer groups.

Sun Baoguo, a member of the National Committee of the Chinese People's Political Consultative Conference, an academician of the Chinese Academy of Engineering, and a professor at Beijing Technology and Business University, has submitted relevant content many times during the National People's Congress and the National People's Congress, suggesting that the wine consumption tax should be abolished to give wine enterprises more vitality. He mentioned that wine is managed as an industrial product on the mainland, with a VAT of 13% and an excise tax of 10%. Statistics show that the comprehensive tax of wine enterprises is generally 25%-30%. Abroad, wine is generally taxed on agricultural products, less than 10%.

The industry generally believes that tax cuts can reduce costs for production enterprises, but in order to solve the core problems of the wine industry, it is necessary to start from the product side and the consumption side.

The wine industry is all about regions and wineries. In recent years, the mainland has initially formed a number of well-known production areas, and its popularity has gradually moved towards the international market. At present, the mainland wine producing areas are mainly distributed in Ningxia, Xinjiang and Shandong. In addition, Sichuan, Guangxi, Yunnan, Northeast China and other places have also formed many differentiated and characteristic small wine producing areas. Wang Dehui said that although the economic benefits of many production areas are not very ideal, the structure of local production areas has taken shape.

For example, Tiansai Winery, founded in 2010, is located in the Xinjiang region. Chen Lizhong, general manager of Tiansai Winery, told reporters that the company is deeply engaged in cross-border breakthrough, immersive experience, content e-commerce, BC integration, etc.

Yang Zhengjian told reporters that in order to do a good job in a wine winery, it is necessary to achieve "five in place", that is, the owner is in place, the policy is in place, the quality is in place, the marketing is in place and the brand is in place. Specifically, the winery mainly devotes itself to the operation of the winery, makes reasonable use of the existing national policies, builds a profit distribution and marketing system with distributors on the basis of adhering to quality, and continues to invest in the formation of a wine brand.

In addition, on the marketing and product side, Yang Zhengjian said that it is necessary to open up more consumption scenarios and produce and promote more people-friendly wine products. It has been noted that the Western model cannot be replicated, and new alternatives are still being explored.

"Wine should gradually enter consumers' lives and families, and make an extension in the consumption scene. This requires support and cooperation from marketing and specific products. Through domestic brands, it is necessary to form its own characteristics, including the characteristics of different production areas and the characteristics of different wineries, and shape the road of branding in China on the basis of ensuring quality. Wang Dehui said.