How big can Li Du get? What's there to praise? Li Du's value is the 'small and beautiful' survival strategy for local baijiu.
-01- The Path Li Du Has Taken I've talked about Li Du a lot this year, and many people are curious! Recently, I visited several local distilleries, and they were all talking about Li Du and learning from it. Some even sent multiple groups to study there. Li Du is just a small local distillery, with its market limited to the vicinity of Nanchang. But Li Du's influence far exceeds its scale. The dialogue between Qin Shuyao from the self-media "Yunjiu Toutiao" and Commander Tang garnered over 100,000 clicks. A local distillery owner said: Li Du has given local distilleries confidence. A group member commented on the official account: Li Du has blazed a new path for regional distilleries. A small local distillery, run so vibrantly! That's exactly where Li Du's value lies. In October 2018, when I first visited Li Du, my eyes lit up. The path Li Du has taken is precisely the path that local baijiu can follow.
-02- The Difficulties of Small Local Distilleries Small local distilleries have it tough! The ticket to nationalization for local distilleries is gone; there are only a few leading companies. If a brand was once nationally known, even if it's poorly managed now, it still has a chance of "resurrection," because baijiu is about history. But those local baijiu brands without history may die for good, with no hope of revival. Even expanding from local to provincial is extremely difficult. Many local famous liquors are now just holding onto their regional "islands." Expanding outward is hard; developing upward is hard! Both horizontal and vertical development are tough! Moreover, the low-end price band where local baijiu used to survive is being eroded by famous liquors. The 50-yuan low-end for bottle liquor is quickly approaching. At this price point, famous liquors can compete, but local baijiu finds it very difficult.
-03- The Confusion of Local Baijiu Local baijiu is confused! Five years ago, Li Du was also at a dead end. First, how to prove the value of the product? Famous liquors have products at every price point, so why should consumers drink local baijiu? Second, how to communicate brand value? In the past, advertising could be a gamble. Now, in the internet age, without a communication point, even with money, you don't know how to spend it. In the past, local baijiu had an advantage in distribution channels. Now, except for bottle liquor still going through foodservice channels, mid-to-high-end baijiu relies on social circle channels. Some distillery owners have good connections, but how much can they sell through personal relationships? The more sales rely on personal relationships, the harder it is to scale, and the more unstable sales become. When Commander Tang arrived at Li Du in 2014, he faced the same problem. First, prices were low; the main products didn't exceed 10 yuan. Second, marketing was ineffective; there was no money for advertising. Even though Li Du had the Yuan Dynasty ancient cellar, it wasn't seen as an asset but rather a burden. That's why before Commander Tang took office, there were "five chairmen in five years."
-04- Learning from Li Du's Marketing System In Li Du's marketing system, I believe there are two aspects worth learning from for all local distilleries: First, how a small distillery creates a sense of value; second, how a small distillery does communication. Local distilleries first think about "how to survive" and need to make sales. If they can't create a sense of value and still push for sales, prices will only go lower, and sales will only get worse. Many local distilleries are stuck in this vicious cycle. Commander Tang's brilliance is that even a small distillery dares to prioritize value creation. To create a sense of value, a small distillery must first solve two problems: First, don't put "sales pressure" on the sales team, so don't assess sales targets; this is the starting point of Li Du's value creation. Second, how to make consumers feel the product's value. That's the origin of Li Du's immersive experience. The immersive experience has seven basic steps, each hinting to consumers: This is real grain liquor! This is good liquor! This is liquor with history! This is liquor with a story! This is liquor whose story can be told to others! Compared to the value created by advertising, the value of baijiu is more complex. In recent years, the communication of leading baijiu companies has basically relied on PR-driven social communication; actual advertising is rare or ineffective. Immersive marketing is also value marketing. If you don't grasp this, you haven't understood the core of Li Du's experiential marketing. Li Du Gaoliang 1955, a bottle of unlabeled liquor, sells for 800 yuan. It's not just about being good liquor. Only with 800 yuan of value can it sell for 800 yuan.
-05- The Core of Experiential Marketing Experiential marketing is good, but its efficiency is too low. Experience is one person at a time. Since the industrial age, few have done this, let alone in the internet era. That's the feeling many peers have after experiencing Li Du. For experience to form a marketing system, two issues must be solved: first, whether the experience itself is communicable; second, whether the experience can be scaled. Some describe Li Du's experiential marketing as "factory tours," and many are even doing "industrial tourism." This is a huge misunderstanding. Li Du's three-level experience system reaches over 100,000 people annually. With this scale, quantitative change can lead to qualitative change. In the quantitative phase, efficiency is indeed low; once qualitative change occurs, it explodes. So, whether experience is efficient depends on reaching the critical point of qualitative change. In traditional marketing systems, experience is personal feeling or word-of-mouth. That's why many think experience is inefficient. Li Du's experience design happens to have internet genes, with participation, entertainment, and ritual. The internet genes of the experience create deep experience, strong cognition, and high dissemination. Because Li Du's immersive experience has internet genes, it has built Li Du's IP matrix during the experience: Li Du Gaoliang 1955, the Yuan Dynasty ancient cellar, and Commander Tang.
-06- The Essence of Li Du's Marketing What is the essence of Li Du's marketing? In the past two years, Li Du has become a "check-in" spot for influencers. Peers visit, group leaders go for study tours, and experts go for inspections. Everyone has seen Li Du's approach, but their understanding varies. Some go back to sell distiller's grain eggs; some say without the Yuan Dynasty ancient cellar, they can't learn; some do "factory tours"; some make various "most expensive liquors." Actually, following basic marketing principles, Li Du's approach is very classic: Create value → Perceive value → Communicate value → Monetize value. Create a truly good product. That's creating value. That's Li Du Gaoliang 1955. Good products are scarce. Li Du 1955 has risen from 380 yuan per bottle to 800 yuan per bottle. First, the product is genuinely good; second, it's scarce. Even Moutai wouldn't be what it is today without scarcity. 800 yuan per bottle is not "priced without volume" or "priced without market"; it's genuinely priced and sold. How to perceive value? That's Li Du's immersive experiential marketing system. How to communicate value? That's the social communication brought by Li Du's immersive marketing system, and the IP matrix formed from it. How to monetize value? The problem for local baijiu companies is usually: They only have a sales team, not a marketing team. Li Du's marketing team is the opposite: Employees are all doing marketing; sales is not important.
-07- The Path of Small and Beautiful Is Li Du a case or a universal value? From my first encounter, I felt it not only has universal value in the baijiu industry but also significance for niche product marketing in other industries. When serving companies in other industries, I've borrowed many of Li Du's practices. In the past, "small and beautiful" companies had no survival space; only "big and strong" existed. Small was a transitional state. China has entered a consumer society led by middle-class consumption. Individualized consumption, niche, small and beautiful now have a social foundation for survival. If local distilleries don't perceive the changes in the consumption environment, they won't discover new survival space. Ten years ago, Li Du's current approach would not have succeeded. Small and beautiful: the core is not small, but beautiful. What is small and beautiful for baijiu? Small scale is small; having a sense of value is beautiful. No matter how good the liquor, if consumers don't perceive its value, it's not beautiful. A good product enjoyed behind closed doors is self-appreciation. There are many ways to create value perception; you can learn from Li Du or not. But creating value and letting consumers feel it is indispensable. This is the true path Li Du has blazed for local baijiu!
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