---
title: "Tao Shiquan of Jiangxiaobai: Ten Years of Seeking Truth, Creating What Does Not Exist"
description: "The essence of innovation is to create what does not exist on the basis of seeking truth and being pragmatic. After ten years of running Jiangxiaobai, Tao Shiquan shares his deep reflections on the challenges of growth, the importance of real user marketing, and the need to create genuine value through long-term thinking."
author: "陶石泉"
publisher: "New Distribution"
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published: "2021-09-30"
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# Tao Shiquan of Jiangxiaobai: Ten Years of Seeking Truth, Creating What Does Not Exist

> The essence of innovation is to create what does not exist on the basis of seeking truth and being pragmatic. After ten years of running Jiangxiaobai, Tao Shiquan shares his deep reflections on the challenges of growth, the importance of real user marketing, and the need to create genuine value through long-term thinking.

**The Essence of Innovation: Creating What Does Not Exist on the Basis of Seeking Truth and Being Pragmatic**
Today, the theme I share is a profound reflection I've had recently after ten years of operating Jiangxiaobai.
This reflection is set against the background that **every enterprise and brand feels that growth is difficult, and sustained growth is even harder. It was difficult in the past, and it may be even more difficult today because the overall consumer confidence index is not high.**
Our brands are aging, our business models are aging, and even though we try hard to innovate, users may not necessarily perceive us as innovative.
Is it easy for new consumer brands? Actually, it's also very difficult. New consumer brands may seem to have some traffic, attention, and market influence. But if you take off the coat, you might find they don't have much substance; they might just be making a lot of noise.
So, achieving business growth, especially sustained and healthy growth, is not easy. **Going back to ourselves, since its inception, Jiangxiaobai has faced difficulties every year, every month; it has never been easy.**
It was difficult in the early days, difficult in the middle, and even now in our second phase, where we've innovated in other categories with good results so far, it's still very challenging.
In this process, especially when building a brand, we need to align the internal team's ideas, align the distributor channel's ideas, and also win over consumers to follow us.
Drucker said that the essence of business operations is innovation and marketing. Therefore, the philosophy that guides and leads our entire innovation is crucial.
In Jiangxiaobai's operations, I've always tried to find if there are more fundamental laws that can penetrate technological changes and time. Are there some constants that can guide us forward?
Recently, I've had two thoughts, and I put them together. **First, marketing based on real users will become increasingly important and evident.**
What do I mean by real users? We might hire a spokesperson, but that spokesperson may not necessarily be a consumer of our product; they just create an image, perhaps a more upscale image.
So, is there a possibility that our products are endorsed by our real users? Is word-of-mouth from real users more important than so-called KOL word-of-mouth? Which one truly matters more?
My feeling is that in business and brand operations, we must first seek truth before being pragmatic. But these simple four characters are very difficult to achieve.
When seeking truth, we are influenced by various marketing schools and theories, and we may lose the path to seeking truth and being pragmatic. That's my first point.
**Second, among the so-called innovative enterprises and brands, how much real value have they created for users? Whether it's another baijiu or some other product, what more useful value does the product itself create? This is an ultimate question.**
If traditional products are just dressed in different clothes and given new names, is that new consumption? What value do such products create for users, channels, and society? I think this is something we need to reflect on.
Conversely, the existence of every useful enterprise, brand, and product is essentially the successful creation of something that did not exist before. I think this is a deep question that brand builders should ponder.
If we go back fifteen years, at least 40% of the products on today's shelves did not exist in the past. For brands, our greatest significance is creating products and brands that did not originally exist in this world.
However, very few people, including our operations team, truly believe from the bottom of their hearts that the value of our enterprise and brand lies in creating what does not exist. This is because it goes against human nature; humans can only see, understand, and believe in what already exists. People often say, "Seeing is believing." If I haven't seen it with my own eyes, how can I believe it exists?
Many people are most interested in how Jiangxiaobai can innovate, and how it can innovate a second time.
When I proposed internally to create our second curve and second brand, strictly speaking, most of our colleagues opposed it.
They said, "Boss, look at the data. The largest brand in the industry is only 20-30 million. You're saying we should create a brand with one billion? How is that possible?"
**What Jiangxiaobai Created in Ten Years That Did Not Exist**
Jiangxiaobai was founded in 2011, and this November marks its tenth anniversary.
Looking back at our starting point, we really had nothing, and our funds were not abundant. As a baijiu category, we didn't have a time-honored brand name or an old distillery with stories to tell. We started from scratch.
We also didn't have a talent pipeline or depth; we weren't a one-man show, but we had only a few people, and our earliest office, including the warehouse, was less than 100 square meters. It took us ten years to get to where we are today.
Objectively speaking, **don't think of Jiangxiaobai as a brand; I believe it's just a name today. In another 20 years, it might be called a brand; in 50 or 100 years, it could become a true brand.**
But I firmly believe that Jiangxiaobai will definitely become a brand, and we might even create a third or fourth brand.
Because the force driving us forward is my belief that this non-existent thing can become reality.
Fortunately, Jiangxiaobai has a group of people who firmly believe we can create what does not exist. This is where I feel the greatest honor.
After ten years from scratch, I'd like to report to you today on the achievements we've created that did not exist before.
After ten years, Jiangxiaobai has created a complete industry chain. We are one of the few baijiu companies that own a fully self-owned farm. The actual planting area of Jiangxiaobai Farm has reached 8,000 mu. In addition to the farm, we own a 760-mu distillery.
In terms of the scale of light-aroma baijiu brewing, we are at least among the top three in the industry today.
Many people ask why Jiangxiaobai wants to build a farm. Is it just for show or for publicity? At first, everyone, including our internal staff and local government, didn't believe we could really build a modern farm. I'm not from an agricultural background either.
But I knew I should find top talent and take a long-term investment perspective. I didn't expect to build a good farm in two or three years, but as long as we persist for eight or ten years, or even twenty or thirty years, we will definitely create something good.
If we want to create something that does not exist, it's crucial to have a correct understanding of the time scale. We can't look at annual, monthly, or quarterly reports; we need to measure with five-year or ten-year reports to create something that didn't exist before.
The distillery is the same. We built it on the basis of a small, old distillery with continuous investment over many years. Jiangxiaobai has gone through three rounds of financing, and all the funds were used for infrastructure, production capacity, and old liquor reserves. We have invested nearly 3 billion yuan in the distillery, which is our most long-term core competitiveness for the future.
Before Jiangxiaobai, no company had positioned small bottles of liquor as their main focus. So, we discovered the scenario of small gatherings, small drinks, small moments, and small moods, which currently seems to have a niche market.
Of course, making it mainstream is a big challenge. But in the niche market, we are also among the top three in the industry.
The same goes for fruit-flavored sorghum liquor. Previously, the category had low attention and brand concentration, so we redefined a new category and built a new brand, creating a non-existent category and product.
Of course, in the future, we hope to create something even bigger that does not exist. Today, there are many foreign spirits sold in the Chinese market, but our traditional Chinese liquor types, whether baijiu or fruit-flavored liquor, have very small global influence and market share.
Before the pandemic, we were determined to expand into the global market and entered 30 countries and regions. We don't treat it as a trading business; we aim to localize products and brand transformation and adapt to the channel characteristics of each country.
This is another endeavor that requires a very long time, possibly the efforts of one or two generations, or even three generations, to achieve.
I hope that in ten or twenty years, when Chinese people travel abroad, they will see Jiangxiaobai as a global brand. That is the next non-existent thing I hope to create.
**Tao Shiquan's Entrepreneurial Principles**
**1. Stay a Beginner**
For every person, company, and brand to grow and progress, the first step is to dare to admit that you are not good enough. Admit that you have a low starting point and that you are relatively at a disadvantage.
Traditional large enterprises and brands are less innovative than new enterprises, and new enterprises and brands are less strong than large enterprises; it's all a matter of relativity. Only by admitting your shortcomings can you avoid the disadvantages of relativity and leverage its advantages.
A prerequisite for creating what does not exist is daring to admit that you are not good enough, admitting that you are a beginner, and maintaining a beginner's mindset over a long period.
**2. Be Firm and Resolute in Creating What Does Not Exist**
Some people put it differently, saying, "I want to create the impossible." "Creating the impossible" can only be an ambition; it doesn't work in business because you're trying to do something impossible.
If I had to add a qualifier, I'd call it "creating the possible non-existent." In fact, all the non-existent things Jiangxiaobai has created have been validated.
The starting point of validation is finding the anchor of consumer value. Starting from consumer research, is there a better product for consumers? Are there unmet scenario needs? Is there better service for consumers? Is there better connection with consumers, including better interaction?
At the same time, add a condition: I have the ability to achieve it over a long period, so it is possible.
Therefore, we must both avoid being afraid to innovate and not seeing what does not exist, and also avoid blind innovation; it must be logically feasible.
**3. Long-termism**
No brand, including distributors, can grasp everything. The essence of long-term operations is to seize those things that do not change over time.
Are our business philosophies good enough? Is our team getting stronger? Do we have an organizational culture and capabilities for the future? These are questions based on long-term thinking.
If the brand is well built, the market is well developed, and the company makes money, I think these are results. The reasons for these results lie in whether we can take a longer-term view of doing business and follow long-term value.
_Note: This article is from Mr. Tao Shiquan's keynote speech at the 2021 (4th) China FMCG Conference, organized and released after his review and authorization._
_Click **Read the original text** to see more highlights of the 2021 (4th) China FMCG Conference..._
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