In the past two years, due to policy and economic conditions, the baijiu industry has been in a downturn, especially high-end baijiu, with bottles once priced at over a thousand yuan now adjusted to several hundred yuan. Compared with the same period in previous years, the baijiu market has been unusually active this year. Some industry insiders believe that high-end baijiu, after two years of sluggish sales and halved prices, is showing signs of recovery, which may drive the overall market rebound.
High-end Baijiu Market Shows Signs of Recovery
Since the beginning of this year, leading liquor companies have been raising prices. In March, Wuliangye's core product, Pu Wu, saw its ex-factory price increase from 659 yuan to 679 yuan. On April 12, Gujing's Tribute Edition rose by 1 yuan per bottle, Year Original Pulp 5 by 3 yuan per bottle, and Year Original Pulp 8 and 16 also saw increases. In mid-to-late April, Jiugui Liquor's 50-degree ex-factory price rose by 5%-10%. In early May, Luzhou Laojiao raised the price of its ultra-premium product, China Taste, in the 1573 series, and Guojiao 1573 Classic Edition may follow with a 15% increase. In the annual reports of listed liquor companies, significant growth in performance is also prominent. Among the 18 listed companies in the baijiu industry, 13 have released 2015 annual reports or performance forecasts, with 12 achieving growth in both revenue and net profit.
Does the multiple price increases since 2016, coupled with the strong performance of listed liquor companies, indicate that high-end baijiu prices have bottomed out and the market is warming up? In this regard, industry insiders say that from the data, although the momentum is weak, the baijiu industry has entered a state of overall recovery. After three to four years of adjustment, the baijiu industry is now in a slow recovery phase, with price bands and channel profitability basically stable, and leading baijiu companies are experiencing a comprehensive recovery. The wave of price increases has spread from listed companies to non-listed ones, and the second quarter's "off-season to peak-season" trend may be expected.
Retail Market Not Yet Reacting
Although high-end baijiu represented by Wuliangye and Luzhou Laojiao has raised prices against the trend in the off-season, sparking a wave of price increases in the industry, looking at the entire baijiu industry, except for a few companies that have followed with small adjustments, most mid- and low-end baijiu prices remain stable.
Reporters found in major supermarkets in the city that most liquor prices remain stable, and some brands, including Wuliangye, have even launched promotional discounts. Many supermarkets' mid- and low-end products show no signs of price increases, but instead use bundling, buy-two-get-one-free, or cash rebates for promotions. In a liquor specialty store, a sales representative said they had not heard of any price increases. However, reporters also found in multiple supermarkets that although liquor products are promoting, the types of promotions and discount ranges are significantly smaller than in previous years. These large supermarket managers also said they have not received any price increase notices from baijiu manufacturers or distributors, and current prices in supermarkets are stable. Industry insiders believe that baijiu brands priced between 100 and 300 yuan face fierce competition, and with consumers becoming more rational, product homogeneity among mid- and low-end brands is severe. Therefore, mid- and low-end, second-tier baijiu brands will not follow the price increase trend.
Source: Lanzhou Morning News
In response to the requests of many distributor friends, the third phase of the B-end E-commerce Inspection Class of this public platform will be held from July 9-12 to inspect three platforms: Wanshang Yizhan, Yunbao Shangmeng, and Weijie Chengpei. Distributor friends interested in transformation can come with us for on-site inspections:
Organization Form
- Company visit
- Actual market case visit
- On-site explanation
- One-on-one communication
Participating distributor friends only need to pay a registration fee of 200 yuan. Time: July 9-12, 2016. Location: Changsha, Xiamen.
Interested distributor friends can register by scanning the QR code below.
When adding friends, please reply "Phase 3 Registration".
Previous Inspection Enterprise Cases:
Yishang Logistics Model Inspection (Second Phase B-end E-commerce Inspection Group Yishang Logistics)
Caiba Model Inspection
Jinhuobao Model Inspection
Beiquan Model On-site Inspection
Piduoduo Model On-site Inspection
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