---
title: "China Resources Beer CEO Hou Xiaohai: People from the 'Old World' Can't Understand How China Resources Will Do Baijiu"
description: "On the evening of February 22, at the 'Golden Seed Brand Night' event of the Wine Industry Innovation and Investment Conference held in Haikou, Hou Xiaohai, CEO of China Resources Beer (Holdings) Co., Ltd., delivered a keynote speech. In his speech, Hou Xiaohai clearly and directly answered the industry's main concerns: 'Why does China Resources Beer want to do baijiu?', 'Why can it do baijiu well?', and 'How will it do baijiu?'"
author: "陈思廷"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2023-02-24"
language: "en"
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# China Resources Beer CEO Hou Xiaohai: People from the 'Old World' Can't Understand How China Resources Will Do Baijiu

> On the evening of February 22, at the 'Golden Seed Brand Night' event of the Wine Industry Innovation and Investment Conference held in Haikou, Hou Xiaohai, CEO of China Resources Beer (Holdings) Co., Ltd., delivered a keynote speech. In his speech, Hou Xiaohai clearly and directly answered the industry's main concerns: 'Why does China Resources Beer want to do baijiu?', 'Why can it do baijiu well?', and 'How will it do baijiu?'

On the evening of February 22, at the 'Golden Seed Brand Night' event of the Wine Industry Innovation and Investment Conference held in Haikou, Hou Xiaohai, CEO of China Resources Beer (Holdings) Co., Ltd., delivered a keynote speech. In his speech, Hou Xiaohai clearly and directly answered the industry's main concerns: **'Why does China Resources Beer want to do baijiu?', 'Why can it do baijiu well?', and 'How will it do baijiu?'**

**Why is China Resources determined to do baijiu?** There is a common view in the industry that China Resources entered baijiu because the beer industry has not grown for many years and has reached its peak. Hou Xiaohai believes that 'beer is an industry that cannot sustain growth in the future; this is clearly the view of the old world or even the old society.' In his view, in the old world of beer, everyone cared about how much people drank, and few cared about whether people drank well, which is incompatible with the country's current direction of high-quality development. In fact, China's beer industry has developed rapidly in the past three years and has entered an era of high-quality development and great prosperity. The revenue and profits of the Top 5 brands have continued to grow, market value has continued to increase, and the entire beer industry structure has been upgraded, entering a brand new world. 'China Resources is doing baijiu not because the beer industry has peaked, but precisely because China Resources Snow's path to leadership in the new world of beer has been successful, giving us the ability and confidence to do baijiu well,' said Hou Xiaohai.

In 2021, Hou Xiaohai took the lead in proposing the concept of the 'new world' in China's beer industry. At the 7th China FMCG Innovation Conference on November 3, 2022, Hou Xiaohai first deeply explained the 'new world' thesis and direction to the FMCG industry, causing a huge and far-reaching impact. In the new world of Chinese beer, being the 'leader of the new world of beer' is the new strategic goal of China Resources Snow. After nearly three years of efforts, China Resources Snow's high-end beer has doubled in three years and more than tripled in five years, with profits continuously doubling, and market value reaching 200 billion yuan, basically achieving the set strategic goals.

Why choose Chinese baijiu? Hou Xiaohai said, 'We hope the company has more future, giving this group of people more imagination, and making China Resources Beer stronger. As the flagship of the central enterprise's consumer sector, doing better, stronger, and bigger is a sacred mission, and it is also because we have firm confidence in Chinese baijiu.' 'Chinese baijiu has ups and downs, full of magic, and Chinese baijiu is also the mainstream of China. As long as Chinese people exist, we believe that the direction of Chinese baijiu will not change; only the brands will get better, products will get better, and drinking will get better,' Hou Xiaohai expressed his understanding and judgment of baijiu.

**Why can China Resources do baijiu well?** Unlike China Resources Snow's positioning as the 'leader of the new world,' China Resources Wine is positioned as the 'explorer of the new world of Chinese baijiu.' Regarding some industry views, Hou Xiaohai expressed his opinions frankly in his speech and elaborated on the main operating model of China Resources Wine. 'Some people say that China Resources Wine does not have the ability to do baijiu. I think this view is at least biased. People who hold this judgment are mostly thinking with old world thinking. People from the old world are unlikely to understand how China Resources will do baijiu well.' 'Our main model is the dual empowerment of beer + baijiu, which will be the main driving factor. Being a pioneer, promoter, and contributor to the new world of consumer goods has broad prospects. Our current three baijiu companies - Jinsha, Jingzhi, and Golden Seed - all have good channels and products, so the China Resources system has the ability to do baijiu.' 'But many people say that beer and baijiu are different. Not only are beer and baijiu different, but beer and beer are also different; even Snow has different products with vastly different operations. But we must also see that beer and baijiu have many overlaps: channels, processes, sales models, informatization, cost control, factory management, channel construction, product portfolio, etc. So, the dual empowerment of beer + baijiu has very broad space.' 'China Resources Wine currently has a short-term goal: to move towards 10 billion. From the initial learning stage, to the continuous stable empowerment stage, and then to the final prosperous development stage, we hope that through these three stages of efforts, we can promote the entire China Resources Wine to become bigger, stronger, and better.' 'Why choose Golden Seed? Golden Seed has unique advantages. The future of Chinese baijiu is 'a hundred fragrances competing,' 'multi-fragrance fusion,' and 'multi-fragrance coexistence.' Golden Seed has a fragrance category that conforms to the trend - Fuhe fragrance - and is the representative of Fuhe fragrance. In addition, Golden Seed has four unique advantages: the Huanghuai production area, the core brewing environment; the long-standing baijiu culture and technical advantages; a good Fuhe fragrance foundation and mature advanced concepts; and an excellent team with He Xiuxia as general manager.'

**Hou Xiaohai and China Resources Beer: Understood by Few** China Resources started doing beer with the acquisition of Snow. Therefore, from the day of its birth, China Resources Snow has been moving towards China's number one amidst continuous doubts along the way. Therefore, the question 'Can China Resources do baijiu well?' is not a new question, at least for China Resources Beer people. The industry has always had a widely circulated and constantly updated 'Four Questions of China Resources': Can China Resources do beer well? Can China Resources Snow become number one? Will China Resources Snow do high-end? Can China Resources do baijiu well? Since 1993, the 30-year growth history of China Resources Snow Beer is the process of successfully answering the above 'Four Questions of China Resources' one by one. The first three questions have clear and successful conclusions, and only the fourth question 'Can China Resources do baijiu well?' is still in progress. We can certainly understand the professional thinking and good-faith concerns behind these questions. Because in the history of Chinese and foreign business, there are countless examples of business battles where companies rashly entered unfamiliar new fields and ended in disastrous defeat, and this continues to this day. Countless realities and business laws make it impossible for everyone who pays attention to China Resources Beer not to have such questions and doubts. Industry logic is indeed very important, but it has never been the real reason for the success or failure of cross-border ventures. Otherwise, we would be completely unable to understand why the daily chemical hegemon P&G started by making candles, and the home appliance giant Midea Group originally made feather dusters. So where is the real reason for the success or failure of cross-border ventures? The development of China Resources Beer gives the answer: **strategy, organization, and culture.** Is a cross-border venture an industrial strategy or a financial strategy? Is it long-term or short-term? Are resources matched? Do learning ability, organizational ability, and talent depth support the realization of the strategy? What kind of culture builds the organization? Does culture truly become the soul force of the organization? Therefore, if people only notice the news events of China Resources Beer and the literal meaning of CEO Hou Xiaohai's speech, and cannot see the unique strategy, organization, and culture behind this enterprise, they will continue to have various misunderstandings. People will find it difficult to understand why China Resources Beer always has surprising and bold decisions and actions, and why there are so many products, plans, and ideas that are unconventional and even subvert inherent cognition. From this perspective, there have always been few people who truly understand what kind of enterprise China Resources Beer and its CEO Hou Xiaohai really are.

**About the author:** Chen Siting, CEO of New Distribution, senior FMCG media person, and consultant. Former editor-in-chief of 'Sales and Marketing' magazine, marketing consultant for Tanmuzhu, and founder of the internet supply chain project 'Wanchaobang'. He has conducted in-depth research and practice on consumer brand planning and communication, distributor model transformation and upgrading, and supply chain innovation and reform, with a professional perspective and on-the-ground research of the Chinese market.


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