Scan the QR code in the image to register Wusu Beer has reaped the counter-mainstream dividend in China's beer market No matter how you look at it, the rise of Wusu Beer seems like a quirk of fate. In a beer market that had been stagnant for nearly a decade, a brand from the border regions suddenly emerged across the country, which seems to be purely a matter of random fortune. Therefore, when Wusu Beer became famous, many industry insiders worried that it would follow the fate of other internet-famous brands—burning brightly for a moment and then fading away. First, we need to understand: what is the user base behind Wusu Beer's popularity? Is there an inevitable logic within the coincidence? What is Wusu Beer? Its official positioning is "from Xinjiang, rich, and unique" Wusu Beer. Thus, the essence of Wusu Beer gaining a certain number of users is today's demand for personalized and diversified beer products. Since around 2005, the mainstream trend in China's beer market has been "two decreases and one increase": lowering malt concentration, reducing per-bottle capacity, and gradually raising the price per bottle. The market structure and brand landscape have also shifted from a hundred flowers blooming to a high degree of concentration. When the market becomes concentrated around a mainstream, catering to that trend is an effective strategy. However, firmly being "counter-mainstream" can also be another effective strategy. "From Xinjiang, rich, and unique"—these three labels are all personalized and even somewhat exclusive. Large bottles, high alcohol content, and exotic flair, differing from the mainstream, are the most direct reasons some users choose Wusu Beer. Wusu Beer has distilled its brand essence as "hardcore." In an era where pretty boys are increasingly popular, this is another form of counter-mainstream. If we extend our observation over time, mainstream trends in consumer goods have always had a cyclical nature. Many products and designs that conform to classic aesthetics will inevitably revive at some point in the future. Of course, history may repeat itself in striking ways, but it never simply duplicates. Moreover, Wusu Beer initially had one brewery supplying the entire country, and the high logistics costs inadvertently created a premium price of 12 yuan per bottle, double the 6 yuan per bottle price in Xinjiang. Many cases like Wusu Beer prove that in a market where the mainstream is highly concentrated, counter-mainstream approaches are more likely to achieve a degree of success. Whether fate favored it or not, Wusu Beer gained this "counter-mainstream dividend" and went national. Nevertheless, without Carlsberg behind it, we believe Wusu Beer's fate would likely be like that of a crab—red and then dead. But because Wusu Beer is now a wholly-owned subsidiary of Carlsberg, the future holds more possibilities. Wusu Beer becomes Carlsberg's "child of destiny" Although Carlsberg China's sales have been rising, surpassing 10 billion yuan in 2021 and becoming Carlsberg's largest single market globally, its strategy in China has been quite laid-back. Looking at the several Chinese local brands Carlsberg has acquired, there have been no major integration moves after acquisition, and it doesn't obsess over market share fluctuations, instead focusing more on the financial performance of its brands. Therefore, Carlsberg China appears more like a mild financial investor than the world's third-largest beer group with industrial ambitions. In contrast, AB InBev's China market strategy is quite aggressive. As early as 2004, Budweiser entered China's mid-range beer market by acquiring Harbin Brewery, and after more than a decade of long-distance running and countless costs, it remains persistent. But Carlsberg's laid-back style began to change after Wusu Beer's rise. Conversely, because of Carlsberg's background, Wusu Beer also has the possibility to escape the fate of an internet-famous brand. Carlsberg China's 6+6 brand matrix From Carlsberg's "6+6" brand matrix, among the 6 international brands, Carlsberg, 1664, and Tuborg have advantages; among the 6 local brands, none was originally a national brand, and the largest, Chongqing Brewery, only has advantages in Chongqing. Wusu Beer's excellent performance in the national market over the past two years has given Carlsberg the idea to compete nationwide. More importantly, according to reliable sources, in 2021 alone, Wusu Beer contributed nearly one billion yuan in profit to Carlsberg. With such high profit returns, Carlsberg, which "loves money," would certainly regard Wusu Beer as its "child of destiny," one capable of changing Carlsberg China's fate. So far, Carlsberg China has at least promoted the following two things: First, opening Carlsberg's national production capacity to the Wusu Beer brand. Capacity sharing greatly reduces Wusu Beer's logistics costs and improves market response speed; second, it leverages the internet-famous momentum to maximize sales opportunities and expand sales growth. Previously, a securities company gave Wusu Beer a 30% growth target for 2021, but internally, Wusu Beer set a 100% growth target for markets outside Xinjiang, with several sales departments aiming for a total of about 400,000 tons. According to Wusu Beer's internal plan, the scale is to exceed 1 million tons by 2022. At a premium price of 12 yuan per bottle, what does 400,000 tons mean? It almost matches the sales scale of the high-end variety Pure Draft from first-tier brands! Second, Carlsberg's national sales and channel systems are opened to Wusu Beer. Based on available information, in 2021, Carlsberg China divided Wusu Beer's national sales into five business units (BUs): Xinjiang, Ningxia, Chongqing Brewery (CBC), Yunnan, and Carlsberg International Brands (CIB). Among them, CBC manages the markets of Sichuan, Chongqing, and Hunan; Yunnan BU is responsible for the Yunnan market; CIB is responsible for seven provinces—Guangdong, Guizhou, Anhui, Jiangsu, Qinghai, Tibet, and Gansu—plus national e-commerce platforms and 29 national hypermarket systems; the Xinjiang-Ningxia BU is responsible for other regional markets outside the first four BUs. Without Carlsberg's production and sales resources behind it, even if Wusu Beer's brand could go national online, its market nationalization would not have been so fast. Once the time window is missed, the opportunity for market nationalization might be lost. All apparent coincidences are the best arrangements. Precisely because of this, Wusu Beer has the possibility to go from an internet sensation to a lasting brand, escaping the fate of dying out after a brief blaze. But if Wusu Beer only had these, it would still not be enough in a beer market as fiercely competitive as a knife fight. Therefore, in 2021, Wusu Beer officially launched its "market fine-tuning" strategy. Wusu Beer's "extremely stingy" market fine-tuning model Before its rise to fame, Wusu Beer had only one or two people responsible for markets outside Xinjiang. The market also used a general agency model, often with one general distributor for a province or multiple provinces, with no management concept—anyone could get goods from anyone. The terminals were mainly Xinjiang specialty restaurants, with chain restaurants like Bayi Laoye being major accounts. In the second half of 2020, Wusu Beer began to propose the concept of "fine-tuning the market." Wusu Beer designated any provincial market with the potential to exceed 10,000 tons as a "fine-tuned market." Based on this principle, Wusu Beer currently has "fine-tuned markets" in at least several provincial markets, including Beijing, Fujian, Hubei, Shandong, Jiangxi, Shanghai, Zhejiang, and Guangdong. Since it is positioned as a "fine-tuned market," it naturally should have significant differences from ordinary markets in brand promotion, channel strategy, and terminal operations, and have a set of methods for fine-tuning, right? But so far, Wusu Beer's "fine-tuning strategy" is quite unique. First, the primary purpose of fine-tuning the market is to increase volume, mainly through channel flattening. Taking a certain province as an example, after being designated as a fine-tuned market, the volume increase target was set at 200%, with an annual target exceeding 15,000 tons. There is pressure to achieve the target; the general distributor either establishes sales branches in prefecture-level cities or gives up those markets, allowing prefecture-level distributors to open accounts directly at the factory. Some general distributors retained direct operations in the provincial capital, and if they could find local partners in prefecture-level cities, they opened accounts through joint ventures; if they couldn't find partners and couldn't build direct sales teams, they had to reluctantly give up. Second, the purpose of channel flattening is to expand the sales team. The nominal fine-tuning of the market is actually market flattening. The purpose of flattening is to enable distributors in smaller regions to expand their direct sales teams, directly serve terminals in the region, and operate with precision. Third, after being designated as a fine-tuned market, shouldn't market investment be increased? Sorry, no. Should regional marketing and management teams be expanded? Sorry, no. Carlsberg's "money-loving" style is once again evident here. Currently, the price system for the main-selling red Wusu bottled beer is roughly: factory price around 50 yuan per case, terminal guidance price around 72 yuan per case, with a middle margin of about 20 yuan. We analyze that Wusu Beer's thinking might be: since the brand already provides such high profit margins, why should we also provide market development funds? Of course, Wusu Beer has also started brand building at the headquarters level. For example, inviting Zhang Weili as brand ambassador, placing brand ads on new media, co-promotions with big names like Li-Ning, and consumer experience events like Wusu Bazaar. But to be honest, the scale and intensity of these brand investments, whether compared to the profits Wusu Beer earned last year or to the strength of Carlsberg's international brands, are laughably small. In summary, we can tentatively name Wusu Beer's distinctive "fine-tuning market strategy" as the "extensive fine-tuning strategy." Rapid growth on one hand, penny-pinching on the other, has become a unique phenomenon of Wusu Beer's "extensive fine-tuning market." There is no right or wrong in strategy, only suitability. But the question is: why would Wusu Beer, which clearly lacks neither money nor a strong background, choose this seemingly short-sighted and somewhat irresponsible "extensive fine-tuning strategy"? The question of destiny: How long can "Lethal Big Wusu" stay popular? Why does Wusu Beer adopt such a unique "extensive fine-tuning strategy"? First, an important superficial reason is that Carlsberg's team lacks the experience and capability for fine market cultivation, and after Wusu Beer's explosive popularity, it is indeed difficult to quickly build a corresponding fine-tuning team and capability in the short term. But this may not be the core reason. Another more likely possibility is that Carlsberg's team lacks a confident judgment on how long Wusu Beer can remain popular. As mentioned earlier, in an era of concentrated mainstream, firmly being counter-mainstream is a path with a higher success rate. But conversely, if this counter-mainstream is truly "against the tide," then after the novelty wears off, its ceiling will quickly appear, and there may even be brand backlash. "Users who love you today may hate you tomorrow." In the mobile internet era, more than one brand has suffered such backlash. Let's look at the key drivers of Wusu Beer's popularity. "Lethal Big Wusu" is its widely circulated nickname, and the famous pun of reading "WUSU" upside down both prove Wusu Beer's high alcohol content and easy intoxication. Deliberately getting drunk is certainly a motivation for some consumers, but the true core needs for beer products are palatability, unique flavor, and a relaxed, pressure-free experience. Wusu Beer's "high alcohol" feature may initially attract some consumers out of curiosity for a first try, but what about the future? How many users will this experience lead to repeated consumption and eventually brand loyalty? Countless business cases also prove that if "counter-mainstream" cannot smoothly "return to the mainstream" later, it still won't grow big. That is, counter-mainstream can serve as an initial strategic entry point, but it often cannot be the true brand strategy. Otherwise, why have we never seen a great brand that is counter-mainstream? We believe that precisely because Carlsberg China hasn't yet figured out the accurate future brand strategy direction for Wusu Beer, it dares not act boldly and has adopted the current extremely stingy stopgap measure. For example, how to continuously interpret the "hardcore" culture? Should the hardcore culture be separated from Wusu Beer's high-alcohol, easy-intoxication feature? How? Should the high-alcohol, easy-intoxication feature be maintained or improved at some point? These questions need answers from Carlsberg China's team. The opportunity for nationalization is right in front of us, and fine-tuning the market is imperative. But if the above questions still lack confident answers, what to do? The "extensive fine-tuning strategy" becomes the only viable option. Regardless, it is definitely wise to first pocket the dividends of nationalization. Therefore, Wusu Beer's profit performance will absolutely soar in the next year or two. Then, first leverage the internet-famous brand momentum to complete the national channel layout; investment in terminal network construction is not yet the right time. As for the real market fine-tuning actions, we'll have to wait until the answer to "how long can it stay popular" is found. From current market feedback, it is appropriate to describe Wusu Beer as "chaotic yet brilliant." On one hand, Wusu Beer's sales continue to rise; on the other hand, several BUs are competing for channels and volume, and price chaos and cross-regional dumping are quite serious across the country. Of course, these may be temporary situations. Whether Wusu Beer can truly become a part of China's high-end beer market and escape the fate of an internet sensation ultimately depends on the answer to its brand strategy question of destiny. How long Wusu Beer can stay popular also depends on this. -END-