On April 21, the A-round financing conference of Sishijiu Fang, themed "Industry Internet, Light of Mass Innovation," was held at the China National Convention Center in Beijing. Information disclosed at the meeting: this round of financing was led by Cathay Capital, a globally leading investment institution, with Chuangxiang Huanju Investment Fund, under one of the world's liquor giants Pernod Ricard, following the investment. As an industry internet enterprise originating from traditional fields, Sishijiu Fang's first round of financing reached a valuation of 5 billion yuan. This is also the highest among entrepreneurial new retail liquor companies with publicly disclosed valuations. That afternoon, over a thousand entrepreneurs, investors, government leaders, internet analysts, national liquor masters, and media reporters gathered. A roundtable forum on new retail in the liquor industry was held, discussing the future trends of new retail for Baijiu (Chinese liquor). People's Creativity and Zhongjun Kaixuan conducted strategic signings with Sishijiu Fang on site. Zhang Chuanzong, founder and CEO of Sishijiu Fang, elaborated on the business blueprint of using the industry internet to reshape the "people, goods, and places" of the liquor industry. Duan Lanchun, managing partner of Cathay Capital, conducted in-depth discussions on topics such as model upgrading in traditional industries, ecological layout, and the overseas expansion of Chinese Baijiu. This financing conference was nothing less than a high-end summit in the field of new retail for Baijiu. -01- Industry Internet Entry, Reconstructing the "People, Goods, and Places" of the Liquor Industry Sishijiu Fang is an industry internet enterprise with mid-to-high-end sauce-flavored liquor as its core business. In 2015, Zhang Chuanzong led 49 elites from various walks of life to jointly establish Sishijiu Fang. By the end of fiscal year 2020, Sishijiu Fang's annual sales will reach 2 billion yuan, ranking among the forefront of the industry. Mr. Zhang Chuanzong, founder and CEO of Sishijiu Fang In a speech themed "Industry Internet, Light of Mass Innovation," Zhang Chuanzong, CEO of Sishijiu Fang, deeply interpreted the target audience positioning, business model, development status, capacity layout, and capitalization strategy of Sishijiu Fang, revealing the core competitiveness sources of its rapid growth. Zhang Chuanzong is a senior practitioner in the IT field, having served as general manager of multiple regions and businesses at Lenovo Group, and an angel investor in multiple fields. He is also a researcher and practitioner of the industry internet, and an explorer in the fields of new retail and new consumption. Zhang Chuanzong pointed out that in the current economic environment, efficient information exchange methods, fast logistics and distribution systems, convenient transportation facilities, and increasingly flexible intelligent manufacturing industries have leveled regional differences. In such a situation, a large number of middle-aged, new middle-class, and backbone populations, as well as a large amount of social resources in traditional industries, are in a state of "already online but idle." Sishijiu Fang uses the industry internet approach to optimize and upgrade scarce production resources such as sauce-flavored liquor, integrate and empower distribution channels across multiple industries, and innovate and transform consumer user experiences, thereby forming an industrial community that integrates and transforms supply chains, sales channels, and terminal experiences, linking various industries and creating cross-industry co-creation. Sishijiu Fang's business model breaks down the generational barriers between middle-aged and young people, forming a new community communication loop. Observing the Sishijiu Fang ecosystem, one can see a large number of people from different industry backgrounds and age groups. On the supply chain side, Sishijiu Fang enters traditional production fields with advanced management methods, optimizes the supply chain with high-quality standards, and its products have repeatedly won awards. Currently, it has over a thousand fermentation pits and a production capacity of ten thousand tons. On the experience side, Zhang Chuanzong believes that the attributes of liquor are not only in taste but also in its spiritual, social, and cultural attributes. The nature of Sishijiu Fang's experience stores is quite different from traditional retail stores; they are experience centers for understanding fine liquor and culture. Using liquor as a medium, Sishijiu Fang provides users with a fourth living space beyond home, company, and shopping malls, and also a second business space outside the company. New Retail Business Grows Rapidly, Winning International Capital Favor Although based in traditional industries, Sishijiu Fang has achieved astonishing growth speed. Since its establishment six years ago, Sishijiu Fang has grown rapidly, with a compound annual growth rate exceeding 100%. Currently, Sishijiu Fang has 4,000 new retail sales terminals, including over 100 new retail mass innovation platforms, 1,500 new retail experience stores, and 2,500 new retail distributors. Already 50,000 people (20,000 each year) have participated in Sishijiu Fang's sauce-flavored aroma journey, traveling to Maotai Town, Renhuai City, Zunyi, Guizhou, the capital of Chinese liquor, to experience Sishijiu Fang's brewing techniques and Chinese sauce-flavored liquor culture. Sishijiu Fang's collection of thousand-jin jars exceeds 10 million jin, setting a domestic record for high-value jarred Baijiu private collections in the liquor industry. Sishijiu Fang's sales outlets have covered 31 provinces and cities, over 200 prefecture-level cities, and over a thousand county-level administrative units. From Xinjiang to Shanghai, from Heilongjiang to Hainan, Sishijiu Fang's new retail experience stores can be seen. Currently, 30,000 elites from various industries have become new retail partners of Sishijiu Fang. With mid-to-high-end sauce-flavored liquor as the core, facing new consumption upgrades, and targeting existing high-net-worth, high-quality users, Sishijiu Fang has widely laid out high-quality daily consumer products such as specialty rice, high-end edible oil, tea, craft beer, and organic wine, delivering them to consumers through new retail methods. Around users' demands for stylish living and cognitive upgrading, Sishijiu Fang has also launched emerging services such as high-end suit customization and management training, customizing tasteful and stylish premium life solutions for users. Ms. Duan Lanchun, Managing Partner of Cathay Capital Ms. Duan Lanchun, managing partner of Cathay Capital, attended the meeting and delivered a speech. Cathay Capital is a globally leading investment institution, and in Sishijiu Fang's A-round financing, Cathay Capital led the investment. In her speech, Duan Lanchun discussed the development trends of the Chinese and international liquor industries and analyzed the new retail track for Baijiu. Sishijiu Fang's high-net-worth target audience, innovative channel strategies, and new retail thinking have brought inspiration and imagination to the industry, thus winning Cathay Capital's recognition and partnership. Mr. Wang Chen, Investment Director of Chuangxiang Huanju Fund and Vice President of Pernod Ricard China Mr. Wang Chen, investment director of Chuangxiang Huanju Fund and vice president of Pernod Ricard China, also delivered a speech, praising Sishijiu Fang's innovative business model, management organization, and high growth potential. Pernod Ricard is one of the world's liquor giants, and its Chuangxiang Huanju Fund followed the investment in Sishijiu Fang's A-round financing. Looking back at 2020, the development of China's Baijiu industry was positive. Among them, the sauce-flavored liquor industry achieved a production capacity of about 600,000 kiloliters, a year-on-year increase of about 9%, accounting for about 8% of the total Baijiu industry capacity, showing a steady upward trend. In 2020, the sales revenue and sales profit of China's sauce-flavored liquor industry reached approximately 155 billion yuan and 63 billion yuan, respectively. Sales profit alone accounted for nearly 40% of the total profit of China's Baijiu industry, showing that the consumption structure is gradually upgrading. The future trend of the sauce-flavored liquor boom is causing capital markets to pay increasing attention to sauce-flavored liquor. New enterprises like Sishijiu Fang play the role of explorers and leaders in the upgrading of traditional industries, thus becoming key targets of attention. Signing Ceremony of Sishijiu Fang & Cathay Capital Signing Ceremony of Sishijiu Fang & Chuangxiang Huanju -02- Joining Hands with People's Creativity, Layout of Cultural Creativity, Creating Liquor Culture IP Sheng Ruowei, editor-in-chief of the People's Daily's "National Humanities History" magazine and chairman of People's Creativity (Beijing) Cultural Development Co., Ltd., attended the signing ceremony and delivered a speech. He pointed out that as a leading unit in the cultural creativity field of the People's Daily, relying on profound cultural accumulation and media convergence advantages, People's Creativity actively explores the new industry format of "culture+", helps China's most promising national brands launch quality products with cultural attributes, and strives to make Chinese brands good storytellers of Chinese stories. People's Creativity and Sishijiu Fang use culture as a guide, innovation as a driver, and ignite a new engine for the high-quality development of national brands through cross-border cooperation. With the innovative form of "culture + consumption," they create a diverse cultural consumption IP for Sishijiu Fang, boost the brand's value expression, and create a benchmark for the cultural ecology of the Baijiu industry. Mr. Sheng Ruowei, Editor-in-Chief of People's Daily's "National Humanities History" Magazine and Chairman of People's Creativity Sheng Ruowei stated that today, starting with "People's Years Wine," we adhere to the people's standpoint and feelings, empower and lead industry development with firm craftsmanship, unique era sentiments, and profound cultural heritage, and better meet the people's growing needs for a better life. In the future, People's Creativity is willing to work with Sishijiu Fang to jointly cultivate more liquor culture IPs with national characteristics and international influence, with better quality and content, serve as a bond for cultural exchange, build a bridge for emotional connection, bring people a better enjoyment, and better undertake the responsibility and mission of letting the world understand China. Mr. Ma Jinsong, President of Sishijiu Fang Ma Jinsong, president of Sishijiu Fang, delivered a keynote speech titled "Rooted in Tradition, Creating the Future with Culture." Ma Jinsong stated that liquor also has a unique position in the spiritual world and cultural life of humanity, serving as a carrier of politics, culture, art, family affection, friendship, joys and sorrows. Today, on the one hand, the demand for high-quality sauce-flavored liquor remains unmet; on the other hand, China's Baijiu industry still has many upgrading opportunities in the internet era. With the revival of traditional Chinese culture, Chinese liquor will re-emerge with its unique charm. Ma Jinsong mentioned in his speech that People's Creativity is a culture-empowering enterprise, and Sishijiu Fang is also a culture-driven company, which is an important reason for the strategic partnership between the two sides. Exploring the beauty of liquor culture, using user experience and scene design to boost Chinese cultural confidence, and creating the future trend of national brand IPs are the original aspirations and sentiments of Sishijiu Fang. Strategic Signing Ceremony of Sishijiu Fang and People's Creativity -03- Zhongjun Kaixuan Joins the Grand Event, Industry Supports Red Sentiments At the conference, Sishijiu Fang also held a strategic signing ceremony with Zhongjun Kaixuan. Zhongjun Kaixuan is a professional platform serving veterans nationwide, committed to providing all-round assistance in employment and entrepreneurship, training and education, and life support. The two sides will jointly focus on the employment field, share more social responsibilities, and through cross-border empowerment, management training, and other methods, join hands with 167,000 service institutions to create opportunities for more veterans to enter the field of innovative industries. Mr. Cao Xiangdong, Vice President of Zhongjun Kaixuan Mr. Yang Yaoming, Chief Government Affairs Officer of Sishijiu Fang Cao Xiangdong, vice president of Zhongjun Kaixuan, delivered a keynote speech titled "Joining Hands to Empower Veterans, Industry Boosts Entrepreneurship and Innovation." Cao Xiangdong focused on introducing the exclusive sauce-flavored liquor for veterans launched by Sishijiu Fang in conjunction with Zhongjun Kaixuan - "Kaixuan Suiyue" (Triumphant Years). The aim is to revive the millennium-old bond between liquor and soldiers; to rediscover a value contained in liquor that transcends the times. "Kaixuan Suiyue" carries the best interpretation of the soldier identity by veterans: "Pursuing the triumph of victory, remembering the glorious years of military service." The two sides hope that through "Kaixuan Suiyue," all veterans who take pride in military service will evoke that warm and profound comrade-in-arms sentiment, and evoke the pride and glory that are integrated into their blood. Signing Ceremony of Sishijiu Fang & Zhongjun Kaixuan -04- Launching Capitalization Layout, Upgrading Capacity, Brand, and User Experience Since its establishment six years ago, Sishijiu Fang has not only maintained rapid growth but also maintained good cash flow and profitability. In the early stage, relying only on its own funds, Sishijiu Fang achieved comprehensive development, stepping into the forefront of the industry in both supply chain and new retail. Entering 2021, with further business growth, Sishijiu Fang accelerated its layout in capacity, brand, and user experience, and for this purpose launched its capitalization layout. This A-round valuation of 5 billion yuan, the investment obtained will help Sishijiu Fang deepen its efforts in the following areas:

  1. Further integrate high-quality scarce capacity resources, merge, invest in, and inject capital into high-quality distilleries, increase cellars, increase the storage of aged liquor, build more base liquor storage bases and customer wine cellars.
  2. Expand and empower more industries, making sauce-flavored liquor new retail a high-viscosity, high-return, high-growth companion business for more industries.
  3. Create knowledge-based, culture-based, and communication-based stylized new retail. With high-quality content, influential circles, and opinion leaders from various industries as cultural momentum, promote healthy liquor culture, etiquette liquor culture, and a civilized liquor culture that combines rationality and sensibility, contributing to the confidence in traditional culture and national brands.
  4. Through big data, video live streaming, data-driven circulation of commodity value, community information construction, data-based online-offline linkage, and LBS-based ecological product and service layout, create a model digital liquor industry.
  5. Layout overseas markets, using overseas Chinese and enthusiasts of Chinese culture as hubs, and cultural export as a means, to start the construction of overseas Sishijiu Fang experience stores and new retail systems. Roundtable Forum on New Retail in the Liquor Industry In addition, the conference also held a roundtable forum on new retail in the liquor industry from an industry perspective. Shen Yijun, managing director of Cathay Capital; Qin Shuyao, secretary-general of the China Alcoholic Drinks Association and founder of Yunjiu Toutiao; Wang Pu, founder of Beida Zongheng Management Consulting; and Mao Jiye, dean of the School of Business at Renmin University of China, served as forum guests, deeply discussing the impact and inspiration of new retail in the liquor industry, innovation in management organization models, and the inspiration and thinking of the industry internet for traditional and internet industries. Mr. Quan Tu, Senior Sauce-Flavored Liquor Expert and National First-Class Taster Mr. Qin Shuyao, Secretary-General of the China Alcoholic Drinks Association and Founder of Yunjiu Toutiao Tips provided will be paid 400-2000 yuan once adopted.