"Huaxia Wine News" reporter Liu Xuexia
With the rise of short video platforms, live streaming has become one of the main sales channels of major e-commerce platforms.
The leading liquor companies collectively rushed to the e-commerce platform, well-known liquor merchants have laid out online, and the outlet of short videos has swept the liquor field wildly. According to statistics, in 2023, the online market size of liquor will exceed 120 billion yuan, and sales will increase by more than 50% year-on-year.
But on the other hand, the online wine industry is in a stage of rough growth, and there are some chaos such as fake wine turmoil and online sales by smugglers. How to solve the two-sided nature of the liquor e-commerce industry?
Not long ago, the "Regulations for the Implementation of the Law of the People's Republic of China on the Protection of Consumer Rights and Interests" was officially announced, which will come into force on July 1, 2024. The new regulations clearly emphasize that "whoever sells is responsible", and requires that live streaming must clearly state "who is bringing goods" and "whose goods are bringing".
The "Regulations", which have significantly increased the management norms, have attracted strong attention from the liquor live broadcast e-commerce industry. What will be the trend of online wine sales in the future? This article comprehensively analyzes the online development trend of the liquor industry and discusses the driving factors and future development trends of the online expansion of liquor in combination with the "Liquor Industry Report: Online Development of Liquor, Rising Liquor Online, and Beginning to See Gold in the Big Waves" (hereinafter referred to as the "Report") recently released by Founder Securities.
The market size exceeds 120 billion yuan,
There are four driving factors for the continuous expansion of liquor online
In recent years, social e-commerce and live streaming sales have risen rapidly in the Chinese market due to the slowdown in the growth of shelf e-commerce such as Taobao and JD.com. Driven by content, the e-commerce retail industry has achieved an important transformation from "people looking for goods" to "goods looking for people", transforming passive marketing into active customer acquisition.
As far as the online marketing of alcohol is concerned, its expansion trend is highly certain, and the growth rate far exceeds that of other categories. According to Moojing Insight data, the scale of the online alcohol market will exceed 120 billion yuan in 2023, and the annual sales and sales volume will show an increasing trend, with sales increasing by more than 50% year-on-year. According to the sub-categories, the scale of liquor/flavored liquor reached 90 billion yuan, and sales increased by 77.7% year-on-year.
According to the report, in recent years, behind the rapid online expansion of liquor led by liquor is the joint effect of changes on the supply side + the formation of behavioral habits on the demand side + support and tilt on the platform side, specifically, the driving forces are as follows:
Supply side
Distilleries tend to be positive and attach importance to online sales of products, and deepen cooperation models such as self-operated channels and professional operation teams. By combing the online sales data disclosed by major listed liquor companies from 2019 to 2023, it can be found that since 2020, the growth rate of online sales scale of most liquor companies has accelerated, and the compound growth rate of online sales scale from 2020 to 2023 will reach 27.3%, and the attitude of manufacturers has shifted from cautious rejection in the past to positive attention.
In the process of strengthening online sales, wine companies generally have the following ways: omni-channel and multi-platform layout. Sales through omni-channel platforms such as JD.com, Tmall, Douyin, Pinduoduo, Kuaishou, etc., such as Luzhou Laojiao, Fenjiu, Xijiu, etc., cooperate with JD.com, Tmall and other platforms to open flagship stores, and cooperate with professional e-commerce operation platforms such as Xinhuadu and Jiuxian.com; Make efforts in social e-commerce and develop the growth curve of live content. Platforms such as Douyin and Xiaohongshu have gradually created a strong content ecosystem with Internet celebrities as the core, which is different from traditional shelf e-commerce such as Taobao and JD.com, and has a stronger young market. Self-built e-commerce direct sales platform. For example, Moutai Group launched the "i Moutai" APP, Wuliangye Group launched the "Wuliangye New Retail E-commerce Platform", and Xijiu launched "Junpinhui", etc., relying on its own brand power to develop private domain traffic.
Channel side
The "involution" of offline traditional channels has intensified, and products have flowed to e-commerce channels due to the demand for destocking + capital turnover. From the perspective of industry trends, on the one hand, the liquor industry has shown a development trend of "volume reduction and price increase" since 2016, and at the same time, the number of terminal cigarette hotels has grown rapidly in the past decade, and offline channels are facing stock competition, and channel profits have become thinner; On the other hand, over the years, manufacturers have pursued high turnover and high growth demand + introduced payment collection policies to seize dealer funds and accelerate the inventory and capital turnover pressure of offline channels.
In this context, out of the need for dealers to go to the warehouse and strengthen the return of funds, some offline dealers have turned their products to online sales.
On the demand side
First, the epidemic has cultivated consumers' online consumption habits, the proportion of catalysts has risen, and e-commerce is still in the blue ocean space. According to Tencent's marketing insights report, supermarkets and tobacco and liquor stores are still the main customer acquisition channels for baijiu, but consumers' willingness to buy online is increasing, with 78% of baijiu consumers saying that they are willing to try online purchases in the future, and the online market has potential.
The second is the rise of new models such as live broadcast & entry retail, which is easy for consumers who pursue cost-effective to complete the order conversion. Since 2021, the content e-commerce represented by Douyin has exploded, and the advantages of "high traffic + product and sales integration" of the live broadcast model have created greater opportunities for the online layout of wine merchants. The live broadcast room cooperates with the platform subsidy to interact with the talents, which is easier to convert, especially the consumption needs of the middle-aged core group in the low-line sinking market.
Platform-side
Baijiu has the characteristics of strong circulation, large single products, high value and other categories, with its own traffic advantages, easy to obtain platform policy tilt, and traffic subsidies to promote rapid sales growth. Under the competition of scarce traffic, the leading e-commerce platforms actively promote the "price power" strategy to boost the rapid growth of category sales.
From the perspective of changes in e-commerce channels, from 2019 to 2024, e-commerce platforms such as JD.com, Taobao, and Douyin have successively established a "low-price strategy" and launched tens of billions of subsidy activities. Due to the characteristics of high demand, transparent price and high drainage rate, the head liquor has become the main product selected by the platform's low-price channel.
"Whoever sells is responsible", stricter supervision,
Who can stand out from the liquor online live broadcast?
In the process of rapid online expansion, supervision is also constantly strengthened, what is the development trend of online wine sales in the future? What do you need to stand out from the competition?
Trend 1: Platform supervision is becoming stricter, operator qualifications are being strengthened, and the industry is being eliminated and cleared at an accelerated pace.
In 2020-2021, the rise of content e-commerce and the initial stage of online sales of alcohol, the industry is in a rough growth stage, the relevant audit standards are relatively loose, and there are some chaos such as fake wine turmoil and online sales by smugglers, but in recent years, the trend of tightening industry supervision is clear, which is mainly reflected in two aspects: first, the threshold for the operation of alcohol stores has been raised, and the cost of punishment for illegal operations such as indiscriminate prices and fake wine has increased; The second is to standardize the brand and source authorization, the chaos in the live broadcast room is strictly organized, and the importance of professional anchors and authorized operation teams is highlighted.
In addition, the "Regulations for the Implementation of the Law of the People's Republic of China on the Protection of Consumer Rights and Interests" will come into effect on July 1, and the new regulations clearly strengthen the management of live alcohol sales, clearly emphasizing that "whoever sells is responsible". The introduction of a series of new regulations and regulations on the increase of security deposits has raised the threshold for live streaming of alcohol, clarifying that "whose goods are brought and who is bringing them", that is, the source of goods and the identity information of the anchor need to be clearly indicated in the design of live streaming of alcohol, and the restrictions on unofficially authorized and small brand anchors in the industry are restricted.
The standardized and systematic development of the industry is conducive to professional authorized operation teams and leading operators of regular product sources, and the threshold for online sales will continue to increase.
Trend 2: With the rise of content e-commerce, the incremental space potential of the sinking market is large, and the public ration wine is expected to usher in a development outlet.
From the perspective of inter-city distribution of users, the rise of content e-commerce is expected to help alcohol sales tap the sinking market demand. According to relevant statistics, in 2023, Douyin/Kuaishou will consume 48.78% and 63.35% of users from third-tier cities and below, respectively, with a wealth of users in the sinking market. In addition, "selling wine online is not the same as only selling low-priced wine", from the perspective of the price range, due to the existence of famous products such as Mao Wulu and other high-value large single products to drive the value of goods, the sales of the price segment of about 1,000 yuan accounted for a relatively high amount, and the price segment of Douyin above 919 yuan accounted for 36.84%. Excluding the impact of high value, from the perspective of volume alone, the price band of content e-commerce is concentrated in two levels, one is a single bottle of about 50 yuan to 150 yuan, and the other is a gift box of about 200 yuan to 400 yuan.
The analysis found that the mainstream price band is close to the popular consumer price band of residents, and the design of gift boxes adapts to the needs of e-commerce New Year's Festival, and some famous high-port grain and wine hope to meet the outlet, and there is no monopoly single product stage below 100 yuan (the volume of Bofen is large, and the rest is more scattered), under the anchor explanation + famous winery authorization + cost-effective choice, the price band of high-port grain and wine caters to the rapid development trend of current content e-commerce.
Trend 3: Brands will continue to be interpreted in a centralized manner, among which operators with strong team capabilities, strong financial strength, excellent past operation cooperation cases, and strong brand resources will deepen the moat of their business model.
From the perspective of brand concentration, the sales model of live streaming e-commerce provides more opportunities for small and medium-sized brands, which is lower than that of offline brands, but with the tightening of supervision and the development of industry norms, brands and operators will continue to perform in a centralized manner.
The tightening of supervision and the concentration of brands are all tests of operators' qualifications, and from the perspective of competitive factors, intermediate operators need to have:
First, strong financial strength. To undertake the cooperation of authorized flagship stores, it is necessary to sign task assessment standards, which is equivalent to traditional channel businessmen and has certain requirements for capital operation;
Second, there are excellent cases of operation cooperation in the past. Online sales are still in the process of emerging development of the market, and the winery is still in the initial stage of exploration and gradual attention, and the past experience of cooperation with other brands will become a stepping stone for cooperation with famous wineries.
Third, the brand resources are strong. The number of national famous liquor authorizations is limited, and the sales of liquor are based on a trust mechanism, and the supply chain advantage has become the core barrier for intermediate operators.
Fourth, the middle and back office operation team has strong capabilities. Online sales are different from traditional channels, and the demand for data processing and analysis is higher, and the operation team needs to have professional quality and accurately grasp user and sales data under the Internet logic.
It is foreseeable that the implementation of the new industry regulations will have a far-reaching impact on the live broadcast e-commerce industry, including liquor, and businesses with the above conditions will take advantage of the trend of online expansion and development, benefit from the trend of industry standardization and centralization, and usher in a new round of development.