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At the start of the year, Moutai and Langjiu clashed with several well-known vertical liquor e-commerce platforms over online sales authorization; shortly after, a major e-commerce platform approached Wuliangye about a 'Xiaomi model,' but Wuliangye received them warmly without substantive engagement. Recently, Moutai publicly distanced itself from nearly all vertical liquor e-commerce platforms. In contrast, liquor companies like Fenjiu, Dukang, and Songhe are flocking to e-commerce, spending millions in service fees to gain attention on these platforms.

In response to the above, this article aims to spark discussion on the following five aspects:

  1. Why do different manufacturers hold such vastly different attitudes?
  2. The three major characteristics of the new era and the transformation types for dealers.
  3. What has the internet brought to baijiu (Chinese liquor)?
  4. Building a manufacturer-dealer model conducive to sustainable development based on marketing strategy.

I. Different attitudes among manufacturers stem from the nature of e-commerce and the nature of manufacturers

1. On the nature of certain e-commerce platforms It should be said that denying certain Chinese e-commerce platforms does not necessarily mean denying the internet; on the contrary, it may be that only by denying certain Chinese-style e-commerce can we have a true internet. Many Chinese e-commerce platforms behave and profit in ways that are incompatible with their foreign counterparts. For example, on Google, it is impossible to buy search rankings; rankings must naturally reflect click-through rates. But in China, money can be used to design rankings, setting traps to mislead consumers. Buying zombie followers and clicks is also particularly developed in China. I almost fully support Lenovo's Yang Yuanqing and Gree's Dong Mingzhu. These platforms seem completely different from the foreign internet industry, yet they seem to share a lineage with another sewer: the 1980s idea gurus and VI intimidation (do VI and you will succeed, don't do VI and you will die), the 1990s combination of 'fake TV + celebrity lies + violent promotion,' the 2000s scare marketing of Mengpai health products, and 'Hou-style' TV shopping (fake original prices + fabricated key benefits). This lineage of charlatans, now dressed in internet clothing, shares common traits: ignorance of basic marketing laws and concepts, especially confusing sales with marketing; short-term behavior; gimmicks; false information; intimidation of traditional enterprises; and insufficient real value. It carries an evil aura! How marketing addresses human nature reflects the good or evil of an enterprise. Clay Shirky said: 'Based on love, justice, common preferences, and experiences, people use social tools to connect, share, cooperate, and even engage in collective action. The era of everyone has arrived.' A domestic master's six internet marketing techniques include: greed—corresponding to group buying, flash sales, and lotteries; vanity—VIP levels and occupying positions; showing off—Weibo; voyeurism—invisibility; laziness—shortcuts and online shopping; and lust—beauty communities with 18+ restrictions and beauty IDs. Refusing to cooperate with such e-commerce platforms is a matter of course for all marketing-oriented and strategy-oriented enterprises, and it does not reflect their attitude toward the internet.

2. The categories of Chinese baijiu enterprises determine their attitudes toward short-term e-commerce behavior The strategies of Chinese baijiu enterprises are numerous and complex. The basic divide is between sales-oriented and marketing-oriented enterprises.

(1) Short-term, sales-oriented enterprises are staunch supporters and partners of certain vertical e-commerce platforms

State-owned enterprises: In terms of specific corporate goals, they can be divided into those pursuing short-term profits, short-term sales growth (regardless of profit or sustainability), government face, brand value, and employee employment. Among them, those most likely to accept 'the type of e-commerce rejected by Moutai and Wuliangye' are those pursuing 'short-term sales growth,' even at the expense of profit. Behind this may be complex factors such as face and employment.

Private enterprises: Many private entrepreneurs started with speculation, and combined with the legal attitude toward private ownership and overseas temptations, many choose short-term behavior. China's narrow investment channels allow many short-term behaviors to succeed, as the saying goes: 'Too many fools, not enough swindlers.' Examples include franchise recruitment (about 98% of franchisees in various industries lose money, but moths keep flying into the fire) and physical or online platform operators charging 'tolls.' A few private enterprises that want to do something substantial, if they accept foreign investment, and if the foreign investor is a speculator looking to hype and then exit via IPO, they will also find themselves 'in the game, unable to control their own actions.' These enterprises, which adopt 'achieving short-term goals' as their strategic policy, are also prone to accepting hype, gimmicks, and deception.

(2) Three types of marketing-oriented enterprises will reject certain e-commerce platforms like Moutai and Wuliangye

First, marketing-oriented enterprises that have established a market-oriented mechanism. Market orientation means not only that product development and packaging design meet market demand, but more importantly, that the value provided to the market meets market demand, and it is supported by a differentiated core capability based on its own strategy. Wuliangye strictly controls the correspondence between 'liquor body, packaging, and market price,' proving that Wuliangye adheres to 'market orientation based on value marketing.' This is true market orientation, not 'catering to the market' by fooling the market and consumers. Such enterprises generally reject short-term behaviors that deceive the market. Wuliangye's outright rejection of an e-commerce platform's suggestion to 'learn from the Xiaomi model' is because Wuliangye is a 'market-oriented marketing enterprise.' Of course, market orientation also includes customer responsiveness, direct marketing (database marketing), and experiential marketing (such as professional tasting sessions and integrated management of consumer touchpoints).

Second, enterprises that transform market orientation into market driving. These are 'strategic marketing' enterprises: driving the market with core capabilities, strategic planning, brands, technology, etc. Representative enterprises include Steve Jobs' Apple and the former Walkman. In the Chinese baijiu industry, examples are Yanghe and Baiyunbian. They base themselves on the continuous elevation of their core capabilities, guide regional market layout with corporate strategic planning, formulate regional market business strategies with strategic vision, use brands to unite consumers, pull terminals, and drive performance, and drive performance with product technology, management technology, and marketing planning, creating markets. Such enterprises disdain gimmicks and money-grabbing.

Third, enterprises that have reached Kotler's 'Marketing 3.0' stage, i.e., social responsibility marketing, cause-related marketing, and social marketing. Although the baijiu industry has not yet seen such enterprises, we have every reason to wait and see! These enterprises also reject short-term behavior!

II. Three major characteristics of the new era and the transformation types for dealers The new era has two prominent aspects.

First, the 'degradation of dealers' distribution functions + degradation of hypermarkets' sales functions.' Recently, there have been two hot posts online. One: 'Liu Qiangdong warns traditional enterprises: No need for distributors in the future! Distribution models and franchise models will be killed by O2O!' The other: 'Liu Qiangdong says that in the future, hypermarkets will be killed by e-commerce, and what will survive are convenience stores and urban commercial complexes.' In fact, this view was proposed 20 years ago by Professor Stern, a consultant at the Kotler Consulting Group, one of the three tenured marketing professors in the United States, and a channel expert at Northwestern University's Kellogg School of Management. Professor Stern's magnum opus, 'Marketing Channels,' specifically distinguishes distributors from marketers, pointing out that the value of distribution-type dealers is diminishing, and 'marketing support agents' are the future. Fifteen years ago, Kotler Consulting served Yantai Great Wall Wine and conveyed the 'marketer' concept to Yantai Great Wall. Yantai Great Wall 'made some dealers into marketers,' achieving initial success in 14 cities including Chengdu, Chongqing, Wuxi, and Hengyang, and quickly became the industry's No. 1 in profit margin and top 5 in total sales (only behind Changyu, Dynasty, Shacheng Great Wall, and Huaxia Great Wall), far surpassing enterprises with larger investments at the time, such as Wanda, Xintian, and Yunnan Hong. Facing the major trend that Stern proposed 20 years ago, Yantai Great Wall practiced 15 years ago, and Liu Qiangdong has now revisited, how should manufacturer-dealer relations be restructured?

Second, the number of channel members has surged. Clay Shirky, 'the greatest thinker of the internet revolution' in the United States, provides two concepts related to 'channel members' for the 'marketing channels' of the internet era.

  1. Cognitive surplus. His bestseller 'Cognitive Surplus: Creativity and Generosity in a Connected Age' says: 'People use their free time more constructively.' Cognitive surplus allows marketing activities to leverage a large amount of cheap fragmented time to support the marketing activities of 'resource integrators' at low cost and high quality.
  2. The era of everyone. His other bestseller, 'Here Comes Everybody: The Power of Organizing Without Organizations,' says: 'Based on love, justice, common preferences, and experiences, people can transcend the limitations of traditional society and flexibly and effectively use new social tools such as instant messaging, mobile phones, blogs, and Wikipedia to connect, share, cooperate, and even engage in collective action. The era of everyone has arrived.' The era of everyone allows some channel members to work efficiently without returns, even at negative costs!

Third, changes in channel member relationships. Tom Hayes and Michael Malone proposed that in the internet era, channel member relationships should be 'wet marketing': the essence of 'wet' is returning to the sincere care of human nature, back to the beginning of human society, in interpersonal relationships full of emotion and trust. Gujing Gongjiu's 'wet marketing based on Renrentong' is clearly derived from this.

Facing these three new situations, what should dealers do? Some dealers attempt to stand on a moral high ground, demanding that manufacturers 'share the difficulties' and 'get through the tough times together.' However, the replacement of distribution functions by the internet and changes in the quantity, quality, and structure of channel members are historical trends, not temporary difficulties or transitional pains. Manufacturers either see the outcome and stand by, or lend a hand and perish together, which is of no help! Some dealers develop their own retail terminals, even aspiring to become the 'Gome or Suning of liquor.' But electrical appliances are practical items whose value consumers can directly compare; liquor is 'practical plus social,' with only 17% of its value coming from the direct buyer's quality experience, while the other 83% comes from the other four roles among consumers and the general public. Therefore, liquor sales have their own characteristics: 'making consumers able to buy' cannot replace 'consumers willing to buy.' So, the 'Gome or Suning of liquor' mainly get sales from 'choosing products that consumers are willing to buy and already have price benchmarks + low prices.' This strategy will inevitably encounter resistance from 'marketing-oriented distilleries,' making it impossible to source through normal channels, and manufacturers do not guarantee authenticity! In the short term, they can attract some bargain-hunting consumers, but in the long run, it's hard to say.

Of course, many dealers have successfully transformed into 'marketers.' Marketers generally take three forms.

First, independent brand operation. Recently, many manufacturers such as Luzhou Laojiao and Xifeng have developed many brands to help these dealers successfully transform into operational marketers. Although not all brand buyout operators have successfully transformed, some have already done so.

Second, the operation and management of customized liquor. Customized liquor operators (marketers) can be divided into five categories. The first four are independent transformations into operators: 1.0: Personalized product labels, giving consumers an extra topic when drinking together; originated in 2000 with Yantai Great Wall Wine dealers (corporate consultant: Zeng Xiangwen), developed in 2003 with Jiannanchun Pinzhi Wine (Zeng Xiangwen as chief consultant). 2.0: Personalized product design extends to the bottle body, such as UV printing. 3.0: Personalized product design extends to taste, bottle, aroma, style, alcohol content, etc. Moutai Gold Liquor is a representative. 4.0: Branded customization, using brand power to stimulate potential consumer demand, drive social resource integration, and actively promote performance growth. Luzhou Laojiao's 'The Jar of Wine in Life' is a representative.

Third, transformation under manufacturer-dealer collaborative marketing. This means dealers not only transform from distribution to operation but also operate in cooperation with manufacturers rather than independently. Luzhou Laojiao's 'Qiquan Model' is a successful example of traditional distribution-type dealers upgrading to marketing-type dealers under the 'manufacturer-dealer collaborative marketing' model. It forces (or entices) the company's market operation team and regional dealers' sales resources to integrate and become indistinguishable, unifying distribution and marketing behaviors, and successfully elevating dealers to marketers. Wuliangye's 'Jiuzhitou' launched the 5.0 model of customized liquor, which is a replica of 'manufacturer-dealer collaborative marketing' in the customized liquor field and can be regarded as the Qiquan model in that field. Its characteristics are: Customized liquor is not a supplement to corporate sales but a marketing strategy; The company concentrates resources on researching market strategies, not only studying consumer psychology but also creating new-era consumer behavior models, including purchase models, post-purchase regret models, and customer loyalty models; The company concentrates resources on developing potential consumer demand; segmenting markets such as home storage and banquets, allowing personalized product and brand design to take root in the depths of consumers' hearts; The company implements a unified brand strategy to drive demand, with tools to meet consumer needs not stopping at the quality differentiation stage but carrying brand cultural value; Using 'brand strategy + collaborative marketing' to drive the growth of customized liquor, partners no longer fight alone.

The three types of dealer transformation are all reasonable paths to breakthrough. However, relatively speaking, the third path best fits the characteristics of the new era: division of labor and cooperation, mutual integration, rather than taking over all 'marketing' responsibilities and replacing manufacturers.

III. What has the internet brought to baijiu? Let me first say a 'universally applicable' cliché: The internet has brought opportunities and pitfalls to baijiu; The internet can make pigs fly, but it can also keep pigs as pigs, just pigs. In Jin Yong's novel 'The Book and the Sword,' the envoys Zhang San and Li Si both increase their martial arts with poisoned wine. The internet contains this poisoned wine. It is poisonous; drinking it may kill. But almost all poisoned wine can be turned into tonic if you have matching core capabilities and a clear strategic plan. At the same time, the internet also contains good things that are purely tonic with no side effects.

1. The five 'poisons' of e-commerce (1) Deceiving (or at least misleading) consumers Concealing the true value of products: Exquisite packaging combined with low prices can induce consumers to buy in the short term. Misleading product names: Creating gimmicks in product concepts to quickly attract attention and trigger short-term purchases. Misleading information: Selling search rankings, fabricating consumer reviews, and manipulating information. Consumers think they are searching for information themselves, but it is precisely the e-commerce platform's forgery. Reverse elimination: Since visibility determines sales, investment determines visibility, and profit determines investment, and low-value products have the highest profit margins, those who deceive consumers are often of poorer quality. We hope consumers will awaken, and hope that relevant authorities will return the right to class-action lawsuits to consumers, align compensation with international standards, and create a good business environment that bankrupts fraudsters.

(2) Consumer-facing e-commerce may be of no value to upstream manufacturers or may have a 'negative impact.' Sales targets not met: The essence of liquor marketing is brand marketing, not product marketing. E-commerce cannot convey the overall brand value, so sales are extremely limited. Last year, online liquor sales accounted for only 2% of the total, but the sequelae and resources occupied are incalculable. Most listed products don't even get clicks—if you don't believe it, check some e-commerce websites directly! Negative: Well-known and positively regarded baijiu brands have their 'price image' damaged. Price is an indicator of brand value; a decrease in price leads to a breakdown in perceived value. Moutai's statement that 'online Moutai quality is unrelated to our company' is, in our view, entirely appropriate and merely fulfills the minimum responsibility of a brand operator. An operator, even if not enhancing the brand, should not be so eager for quick success that they drain the pond to catch fish, ignoring the flood behind them and leaving disaster for a thousand years! Illegal: Selling below cost, and so-called 'free' offers, are below-cost dumping and are illegal.

(3) Platform operators that don't take responsibility for sales but only provide meeting opportunities They are essentially toll booths, with little value and demanding much.

(4) The so-called 'internet thinking' of physical enterprises may backfire Zhou Hongyi summarizes internet methodology into four points: First, users first. Second, experience is king. Third, free model. Fourth, disruptive micro-innovation.

Let's talk about users first. 'Users first' divorced from core capabilities and corporate strategy is just using product gimmicks to cater to existing customer needs. Moreover, what is catered to may only be consumer psychology, not consumer behavior. The momentum of Youth Xiaojiu has passed. Even during its craziest period, sales may not have matched the huge terminal investment. Nielsen recently released the 'Post-90s Consumer Report,' saying: 'Although due to different growth backgrounds, post-90s consumers have faster adaptation and acceptance abilities than their predecessors, many post-90s consumers believe that most new products and concepts today arbitrarily attach a so-called post-90s label, which they reject. They pay more attention to the relevance of products to themselves and the connection with individuals.' As Mr. Tao Shiquan said: 'Any industry or thing that only relies on being cute to attract attention will find it hard to survive long-term, and Xiaojiu is no exception. To go far, we must start from reality, do solid market research, truly innovate, and create small liquor that meets consumer preferences, appeals to emotional needs, and suits the taste of young consumers.' In other words, value is fundamental; the correspondence between corporate core value and consumer behavior is fundamental! Another case is the '9-minute delivery' for liquor. First, e-commerce core capabilities are hard to support. A reporter from China Business News recently experienced the 'Jiu Kuaidao' platform multiple times and found that '9-minute delivery' is mostly a 'castle in the air' and difficult to achieve. Second, even if 9-minute delivery is achieved, so what? Do consumers buy because of who delivers fast, not because of brand?

Now, experience is king. There's no problem with experience being king; the issue is that experience can be divided into product experience and brand experience. The experience of overall brand value cannot be fully completed online. Can e-commerce replace Shuijingfang's liquor ceremony performances? Can e-commerce replace Johnnie Walker's 'Flavor Journey'? The terminal experience of Diaoye Niurou is quite good, but its success or failure is not mainly due to the internet. Huang Taiji is said to have poor 'taste experience.' With such a reputation, the internet is not a lifesaver.

Now, free. China's legal system is imperfect, consumer rights are lacking, and unfair competition thrives. Free is unfair competition, do you know that?

Finally, disruptive micro-innovation—I have no objection to that.

2. How to turn poison into tonic? If your brand has enough appeal, and e-commerce can achieve sales without destroying prices, then e-commerce is a tonic for expanding consumer exposure and sales. If you have systematic marketing strategy management to manage the rhythm between 'consumers willing to buy' and 'consumers able to buy,' then e-commerce is just a tonic, and it won't lead to overstock or warehouse overflow because 'willing to buy' can't keep up with 'able to buy,' leading to gimmicks and deception. If you have superb regional market operation capabilities, you can boldly outsource recruitment to professional online recruitment companies, because you have endless models to cater to dealers with different resources and capabilities, helping them move inventory and create a virtuous cycle. Then e-commerce is a tonic. Otherwise, customer survival rates are low, and e-commerce will inevitably suffer 'diminishing marginal returns.' If you have a clear product strategy (not just a single product idea, a flash of inspiration, or a product gimmick) and an overall business policy related to the product strategy, you can confidently crowdsource design. For example, ZARA has a strategy of 'fast + micro-improvement + high-end,' and any professional with 'cognitive surplus' can discover appropriate fashion, imitate and improve it, and then be accepted by ZARA. In short, whether the internet is poison or tonic depends not on the internet itself but on the operator's core capabilities.

3. The huge positive energy contained in the internet (1) Winning at the starting point The internet lowers the cost of entrepreneurship, increasing the possibility of 'counterattack by the underdog.' Full outsourcing and crowdsourcing lower the entry barrier for brand owners. Production can be outsourced, technology and craftsmanship can be 'crowdsourced,' recruitment outsourcing, brand management outsourcing, financial outsourcing, and HR outsourcing are all easy to achieve, making small and beautiful enterprises (which we used to call single-cell enterprises) easy to succeed. Electronic payment + third-party logistics allow regional operators to compress stocking and delivery functions, reducing working capital occupation and reducing warehousing and transportation expenses. Agents focus on consumer cultivation and customer maintenance, lowering capital barriers but raising intellectual resource barriers—movers leave, operators come in.

(2) Winning at turning points The internet enriches the scope and types of channel resources, making 'integrated marketing communications' more complex. Those who didn't win at the starting point can seek new opportunities in the complex resource environment. The internet enriches the channels of information dissemination and elevates the ways of information communication. The internet brings many low-cost 'cognitive surplus' members into the channel, fully utilizing fragmented time and idle resources, providing a larger operational stage for resource integration models such as production collaboration, research collaboration, and enterprise chain collaborative marketing.

(3) Reverse marketing Mr. Kotler's booklet 'Kotler on Marketing' systematically proposes six 'reverse marketing' strategies for the internet age: Reverse product design: Let customers design and arrange their own products. Examples: Dell computers, jeans, website cosmetics. Reverse pricing: The internet transforms consumers from price takers to price setters. On Priceline.com, customers set the price and model of a car, choose equipment, and determine pickup date; Priceline.com then transfers and faxes the proposal's contact information to all relevant brokers. Priceline also plans to offer financing and insurance, allowing consumers to use a similar bidding model to purchase. Reverse advertising: On-demand, letting customers click on ads they are interested in. Customers log topics of interest on Amazon, and the company sends ads on similar topics. Reverse promotion: Customers can request coupons and promotional items from manufacturers through marketing intermediaries; request specific quotes; and request free samples. These intermediaries can transmit customer requests to companies without revealing personal information. Reverse channels: Let customers access products and services at any time and have products delivered to them. Bring the showroom to the customer's home instead of having the customer visit the showroom. Reverse segmentation: Customers answer questionnaires to let companies know what they like, dislike, and their personal characteristics. Companies can use this information to build customer segments and then develop appropriate products and services for different segments. The essence of Kotler's reverse marketing is the 4 Cs: enhanced customer value, lower costs, improved convenience, and better communication. They must explore customers' cognitive space, assess the company's capability space, and master the resource space of partners (for the relationship between the three spaces and dealers, see the diagram 'Pathways to Value Networks' below).

(4) Improving operational management efficiency Internal management efficiency improves, and the collaborative efficiency of the 'enterprise chain' also greatly improves.

(5) Increasing personal income Time that was previously hard to use, such as waiting for meals at restaurants or riding the subway, can now be used to handle emails, transmit information, design new products, and create wealth—in short, turning waste into treasure.

IV. Building a sustainable manufacturer-dealer cooperation model The internet has changed the weight and structure of dealer value. Value has changed, so the manufacturer-dealer model must change. In the internet era, the number of channel members has increased, the structure and quantity of cooperation partners have changed, and the structure of cooperation goals has changed. Interpersonal and inter-enterprise relationships have also changed. Therefore, the manufacturer-dealer model must change. However, the basic laws of marketing have not changed.

1. The manufacturer-dealer model is always the result of 'value-game' Many factors influence the manufacturer-dealer model, mainly consumer value and 'substitutability of cooperation partners' (switching costs and other factors can be indirectly included in these two factors). The two major factors of both parties (or multiple parties) interact and game, leading to different models. Emphasizing consumer value first means emphasizing who contributes more to the 'common cake' of the manufacturer and dealer and who contributes more to the partner. Emphasizing 'substitutability' means emphasizing that the competitors of manufacturers and dealers are their respective manufacturers and dealers, not just the partner you cooperate with. When calculating contributions and gains, reference should be made to the 'cost to partners.' Only calculating consumer value often makes one feel at a loss. Comparing substitutability, the hope is to evoke gratitude for not abandoning partners, not the luxury of 'the next one will be better.'

2. Aim for a stable 'value network' as the ultimate goal We still use Kotler's 'Value Network Achievement Path Diagram' to represent this view. Kotler's model emphasizes that 'value' is the starting point of the cooperation model, and 'value network' is the endpoint. Value network orientation means being kind to others, meaning that as long as it is a value-based exchange, one should move forward, rather than calculating against each other and threatening to burn bridges and switch partners at every turn.

3. Build a sustainable shared culture with the 'enterprise chain' as the unit In the internet era, systems and contracts still play a role. However, values and mental models will become increasingly important. To build sustainable cooperative relationships, one should learn Kotler's 'Iceberg Diagram':

Zeng Xiangwen, Director and General Manager of Sichuan Yinuo Brand Management Co., Ltd., Deputy Secretary-General of the China Marketing Association, EMBA mentor at Tsinghua University and other universities, and Senior Consultant at the Kotler Consulting Group.