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"I am Jiangxiaobai, life is simple." This phrase is the classic slogan used by Chongqing Jiangxiaobai Liquor Marketing Co., Ltd. (hereinafter "Jiangxiaobai Company") for the nationwide promotion of its 45-degree pure sorghum small bottle baijiu.

In the first half of 2014, while almost all baijiu companies in China were either reporting losses or sharp revenue declines, Jiangxiaobai stood out like a rare flower, growing at nearly 100% and defying the market downturn.

"This is all based on the internet, on developed social media and O2O e-commerce models." On July 23, 2014, Tao Shiquan, chairman of Jiangxiaobai Company, dressed in a literary youth style, said in an interview, "Internet thinking can indeed disrupt everything."

The Prelude to Jiangxiaobai

"We capture the rich emotions of every youthful individual and offer you a magical beverage with alcohol content that amplifies our emotions. It can make us happier, more joyful, more passionate, more brotherly, more sisterly, or it can make us lonelier, sadder, more fearful, more depressed. The emotions we like, we let them flow; the emotions we cannot avoid, we let them come more fiercely!"

The above passage is hidden on the inside of the outer packaging of every bottle of Jiangxiaobai. If you are observant enough, you will find a letter written by founder Tao Shiquan, titled "To Our Emotional Youth: A Letter from Jiangxiaobai." When you read this letter, it means you perfectly fit the target demographic for drinking Jiangxiaobai: artistic, introverted but expressive, fashionable, petty bourgeois, "diaosi" (loser), sentimental, and troubled—urban youths aged 25 to 35, struggling for their futures in big cities, whether happy or sad.

Clearly, Jiangxiaobai carries a strong personal imprint of Tao Shiquan.

Tao Shiquan worked for eight years at a major domestic liquor company, Huaze Group, where he became familiar with every aspect of traditional baijiu production, packaging, and marketing. He was also the youngest regional director in Huaze Group's history.

As early as 2003, when Tao Shiquan was a product manager, he was responsible for liquor R&D and packaging design. He recalled, "When I faced a dazzling array of baijiu products with different alcohol levels, packaging, and volumes, I suddenly felt a stir. With so many products in front of you, apart from different names, the style and historical tradition of the liquor were almost identical—all festive, high-end, and symbolizing the drinker's status. At that time, the entire Chinese baijiu industry was too homogeneous; the common research topic was how to make products look more upscale, and they spent a lot of money on packaging."

During his work, Tao Shiquan began to encounter foreign products. He recalled, "When we went to Europe and Japan to see their products, we felt that foreign spirits were simpler and more modest in concept. I have always believed that the most important part of market research is not to ask others if they like it, but whether you yourself like it. That was the budding stage of my idea. I thought that the future development of Chinese baijiu could also be simpler and more modest, or perhaps more diverse. Over the past decade, the Chinese liquor industry has lacked diversity; it has been too uniform. Products from different brands look similar, all in the same style, and brand building tells the same script—the historical traditional script. Those with history dig it up; those without even fabricate a story. Personally, cultural diversity and brand diversity are exactly what a mature market should have. If it appears uniform, it indicates the market is still immature."

The second trigger occurred in 2005. When Tao Shiquan was working in Shanghai, after attending a friend's wedding, he brought two bottles of expensive Wuliangye vintage liquor. After the banquet, he and his friend went to a bar on the top floor of the Shanghai Hongqiao Hotel and opened the Wuliangye with ice. Tao Shiquan recalled, "We were drinking in a lively atmosphere, and the liquor was not cheap, over 1,000 yuan a bottle. But the bar staff and waiters stared at us with great surprise, asking what we were drinking. When they learned we were drinking Wuliangye, they showed contempt, thinking it was inappropriate to drink Wuliangye in such a setting."

"I paid special attention to this incident; it was very enlightening for me. You see, when young people go to KTV nowadays, it's unlikely they would drink baijiu in a fashionable place. Many people don't think about why; they take it for granted. But I kept wondering why we can't drink Chinese liquor in any slightly fashionable place. The fundamental reason is that the style we give to brands and products doesn't match these venues. The history and tradition we emphasize, those high-end elements, cannot provide consumers with a spiritual experience or a sense of fashion. Why do we drink Chivas 12, Johnnie Walker, or Absolut? Because they match people's sense of fashion, and these people represent passion, fashion, and a certain feeling."

"I was the first in the industry to propose a concept that many media now quote: we should focus on the match between liquor and emotions. Because liquor is not a necessity, it needs to match our expression, claims, attitudes, and especially emotions. People need something that represents their emotions to release themselves. So I believe liquor is an 'emotional beverage.' After this incident, I felt that at some point there would be an opportunity for Chinese liquor to move from appealing to traditional history and culture to combining with contemporary humanities. Contemporary people are more vivid. For example, when we have a drink with close friends, we certainly don't think of Li Bai, Du Fu, or a poem. What interests us more is the present—like online current events, humanities, or spiritual issues in our work and life, whether happy, sad, or even negative, such as loneliness or loss."

In the summer of 2010, Tao Shiquan decided to resign, leaving the booming baijiu industry and the bustling city of Beijing. He moved to Chengdu and began a semi-pastoral life. At that time, he still had no intention of starting a business; he just helped some companies with consulting and product development. It wasn't until 2011 that Tao Shiquan became obsessed with the social media platform Weibo.

In the traditional concept, creating a brand without investing one or two hundred million yuan into the market was impossible. After playing with Weibo for over a year from the summer of 2010 to the summer of 2011, Tao Shiquan suddenly realized that modern product marketing might have a new way, and the traditional brand marketing model was collapsing.

Tao Shiquan said, "Based on social media like Weibo and O2O e-commerce models (an online-to-offline sales method), it might be possible to create a new baijiu brand at extremely low cost."

The Birth of Jiangxiaobai

After discovering the disruptive potential of social media and e-commerce, the first thing Tao Shiquan did was to find a product.

He believed he needed something differentiated from the existing traditional liquor industry. Eventually, he found the category of xiaoqu baijiu (small yeast baijiu), a type of liquor widely found in Sichuan, Chongqing, Hunan, and Hubei, with a long history, pure taste, and popular appeal, sometimes home-brewed from single sorghum. Tao Shiquan began large-scale production of this liquor.

The name Jiangxiaobai appeared almost simultaneously. After deciding to focus solely on the small bottle baijiu market, Tao Shiquan decided to use a cartoon image as the logo for the liquor product—the first in the Chinese baijiu industry. His decision drew ridicule.

Tao Shiquan recalled, "After I decided to use a cartoon image, my first thought was to find an existing cartoon character. I enjoy reading anime, but I couldn't find one suitable for this category. It's not like soda or jelly, which can take a children's route, so Pleasant Goat, Big Big Wolf, or Chibi Maruko-chan could work, and many people use them. Liquor is an adult product, so that wouldn't work. So I had to create an image of an urban literary youth. Coincidentally, in 2011, black-rimmed glasses and British-style plaid scarves were standard for literary youths. My cartoonist and I worked together to create this image."

"Next was the naming. In 2010, I watched a TV drama called 'Men's Group.' Sun Honglei's character was Gu Xiaobai, a typical urban literary youth. Of course, we couldn't directly call him Gu Xiaobai. At that time, there were not only Gu Xiaobai; in the movie 'Love Is Not Blind,' there was Wang Xiaojian; in 'iPartment,' there was Zeng Xiaoxian; and in a movie called 'The General,' there was Yu Xiaobai. We found that names like 'Xiaobai' were particularly easy to go viral online and easy to remember. There were many 'Xiaobai's then. Then I needed to give this character a surname. Our production site is on the banks of the Yangtze River, and the culture of 'Jiang' (river) is well-developed in Chongqing, so we naturally called him Jiangxiaobai. In the first half of 2012, we launched the brand image. Now Jiangxiaobai's image is very rich; we are also making WeChat stickers and illustrations."

"After that, we started designing the liquor body. My chief engineer and I studied the liquor body. I wanted the taste to be simpler and softer, not too complex, unlike traditional liquors that have a lingering, complex flavor in the mouth."

Tao Shiquan said he didn't survey other manufacturers' small bottle liquors much because he was already very familiar with them. Basically, their target audience was generally lower-end, or the small bottles were not the main brand, or they were sample products or auxiliary products to open the low-end market. Up to now, apart from China's Jingjiu (a health liquor) that treats small bottles as its main product, Jiangxiaobai is the only company in the industry that fully focuses on small bottles as its main business. This means we invest resources, attention, and follow a different traditional strategic path, Tao Shiquan told Economic Observer.

Jiangxiaobai's liquor body is simple, with only one 45-degree pure sorghum baijiu. Its positioning is clear: only small bottles, i.e., bottles of 300ml or less. In terms of product category, Tao Shiquan learned from Apple, taking simplicity to the extreme: a single liquor body, small bottles, and square frosted glass bottles (without complex outer packaging). His understanding of product efficiency is that less is more. Jiangxiaobai has only three small bottle products (100ml mini, 125ml quote, and 300ml style). Tao Shiquan believes that the fewer product lines, the less likely to make mistakes.

When the market positioning and product lines were ready, Tao Shiquan only needed to practice using social media and other internet tools to conduct a completely different baijiu marketing campaign.

Internet Disrupts Everything

Is Jiangxiaobai a "diaosi" (loser) liquor or a literary liquor?

This question didn't bother Tao Shiquan. He said, "I don't dislike the title 'diaosi liquor.' It was imposed on us by the outside world. My definition is literary liquor, youth liquor. But if people insist on calling us diaosi liquor, we won't mind, because this era is more about self-mockery. What we are doing with Jiangxiaobai is changing from the traditional baijiu's aloofness to lowering ourselves and self-mocking. I think this change is good. I accept all evaluations, but I want to say, 'A diaosi will eventually become the king of diaosi.' I even think diaosi is somewhat a positive word. You and I are all diaosi, but in my bones, I have a literary complex that I can't shake off."

Jiangxiaobai never places any ads in traditional media. Tao Shiquan only spends 5% of his budget on marketing, mainly on social media and activities based on social media, and continuously explores Jiangxiaobai's intrinsic cultural value to make it more distinctive.

Since its inception, Jiangxiaobai created an official Weibo account and printed many classic quotes on the product packaging. These quotes were amplified through Weibo, such as:

"Drinking together, anything is possible..." "I drink everyone under the table just to whisper a word to you." "Drinking alone is not loneliness; drinking and thinking of someone is loneliness."

This literary-style small liquor quickly gained recognition from many urban youths through social media. As Tao Shiquan wrote in "To Our Emotional Youth": "Sometimes, a group's revelry is actually everyone's loneliness. When in a bad mood, who is willing to drink with us?"

In this way, a large number of post-70s, post-80s, and post-90s urban youths, who are still struggling for hope in big cities and are labeled "diaosi" by the outside world, resonated strongly with Jiangxiaobai. As soon as Jiangxiaobai was launched, it gained emotional recognition. Diaosi believed this was a liquor belonging to them, a literary-style liquor.

Baijiu is a mature industry with high entry barriers. Using traditional methods, it would take one or two hundred million yuan to promote a new product. Previously, new products faced a huge mountain: your voice was blocked before it could be heard. You had to spread your brand through traditional media, but the cost of getting consumers to know the Jiangxiaobai brand through traditional media was extremely high. Weibo completely changed the way Jiangxiaobai communicates with consumers, from one-way to two-way interactive communication, from high cost to low or even zero cost. As long as the creativity is good, it doesn't cost money; it's a completely free platform. Tao Shiquan thought this was really great.

Then there are channels. Traditional channels have entry fees, barcode fees, and a series of restrictions. Those unfamiliar might not know that without tens of millions or hundreds of millions, you don't even have the chance to enter these places. E-commerce is quietly changing the landscape. Although Jiangxiaobai is not purely sold online, Tao Shiquan's understanding is different from others. E-commerce is not just selling something online; it also includes getting people to search online and then buy in supermarkets, which is the popular O2O model, also a form of e-commerce.

"Based on these two elements, I felt there was a possibility of disruption. Only under these circumstances did I have the courage to create Jiangxiaobai and the possibility of success. Before social media emerged, I thought this opportunity didn't exist," Tao Shiquan said.

When Jiangxiaobai was launched in 2012, monthly sales were only a few hundred thousand yuan. With internet brand communication and offline activities, Jiangxiaobai experienced explosive growth.

In terms of staffing, Tao Shiquan deliberately avoided hiring industry professionals. Except for brewing, which requires expert experience, he hired people without industry experience—from internet companies, real estate, insurance, animation companies—people from all cross-industry backgrounds. 80% of Jiangxiaobai's promotional budget was spent on content, with a budget of 2 million yuan. Content was used for offline activities. For example, in 2012, Jiangxiaobai held an event called "On the Last Day of the World, You Are by My Side," called "Last Words," in Chongqing, an 800-person party where familiar and unfamiliar people came to drink. Registration was very enthusiastic, creating a large gathering of young fans.

"Only by doing good offline content can you connect with online content," Tao Shiquan said.

"Drinking together" was the theme for 2013. If you look closely at "To Our Emotional Youth," there is sentiment there. This is not a commercial appeal but an emotional appeal. Nowadays, many young people jump off buildings, suffer from autism, are shut-ins, and have communication phobia—these are the negative effects of the internet. Most urban youths face increasing life pressure: buying cars, buying houses, work pressure, fast competition. Even if your phone has a thousand contacts, few can come for a drink at a moment's notice. We appear glamorous on the surface, but our inner loneliness is stronger. So here I have a humanistic proposition: can people put down their phones, not talk business or serious matters, just sit down and chat about everything—ideals, arts, music? That is a more complete life.

"The 'drinking together' I advocate is to encourage more face-to-face communication. Because liquor is just a tool to make people speak more sincerely and willingly. We did this theme well, and in 2013, the charm of social media exploded. That was the period of my sales surge. The scary thing is not only that my official Weibo connects with people; I actually directed a show of drinking together, an entertainment activity. After I proposed this idea, people started inviting each other to drink. The highest level of business is playfulness, being fun. 'Drinking together' is a very obscure term; it wasn't even a phrase before. But after we did it for three months, the search volume for 'drinking together' on Sina Weibo reached 6.5 million."

The restrictions on official consumption (three public consumptions) particularly helped Jiangxiaobai's market; Tao Shiquan happened to ride the wave. The cold spell in baijiu highlighted Jiangxiaobai. Tao Shiquan said, "Everything Jiangxiaobai did was unprecedented; there was no industry experience to draw from. I did many things; you only see my successes, not my failures. In 2012, no one cared about my small business. It wasn't until the industry cooled down that everyone started copying and imitating, which further elevated Jiangxiaobai."

In 2013, Jiangxiaobai expanded in Sichuan and Chongqing, and also entered Hunan, Henan, Shanghai, and Jiangsu. In 2014, Jiangxiaobai began to try entering Beijing, Shanghai, Jiangxi, Gansu, and other markets.

Regarding sales, Tao Shiquan said, "Asking for specifics would be a bit vague. Jiangxiaobai will stick to its small and beautiful positioning. The industry lacks small but strong players, but a mature market and mature consumer groups must be diverse, like Bordeaux wines or German beers, where many small brands have centuries of history. Fortunately, our base is small, and because we focus solely on the small bottle baijiu niche, with the help of internet communication, Jiangxiaobai began explosive growth in the second half of 2012. Almost every month, there was high month-on-month growth, sometimes doubling in a single month. In 2014, Jiangxiaobai aims for a million cases, with an estimated growth rate of 100% to 120%."

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