Huge revenues motivate baijiu distillers, a Chinese white spirit distilled from fermented sorghum, to continue their investment ahead of the busy yuletide sales season and the Chinese Spring Festival in the second half of January.
Baijiu is China's most competitive consumer brand. According to Guotai Junan Securities, listed baijiu distilling companies are expected to generate total sales revenues of over 220 billion yuan ($31.4 billion) this year.
Kweichow Moutai Co Ltd, an influential baijiu distiller from Maotai city in the Guizhou province of Southwest China, said it will set up its e-commerce site next year and continue to promote the selling of its goods overseas.
"We will accelerate the consumer demand-based research and development of new products and optimize the business structure and our distribution networks," said Li Baofang, Kweichow Moutai chief.
According to Li, they will provide their distributors nationally with "more detailed pricing guidance and continue to reform our sales and marketing program for 2020."
Li pointed out that Moutai products in the overseas market this year are in short supply, and the demand-supply gap is widening, suggesting that Moutai has become very popular overseas.
In overseas markets such as Chile, Argentina, Peru, Tanzania, Kenya and Ethiopia, Moutai's sales peaked this year. Sales also grew in large overseas markets like the U.S., Russia, Germany, Italy, and Australia.
Next year, the company said Kweichow Moutai will expand its overseas footprint further, especially in the Belt and Road Initiative regions. It also plans to fund corporate events at home and abroad, such as the China Daily-hosted Vision China series of public talks and discussions, to brighten its brand image.
Moutai goods have sparked speculative transactions on the Chinese market, which have often been in tight supply due to strong demand. Buyers had to reserve goods in advance on some e-commerce websites and complete orders as soon as the items were available to prevent a possible out-of-stock situation.
The market capitalization of the company listed in Shanghai this year reached 1.4 trillion yuan. In June, after 27 years, it became the first stock to see its share price reach 1,000 yuan. It also became the most expensive stock on the A-Share Market, boosted by steadily increasing consumer demand.
"In a way, Baijiu reflects Chinese culture. It boasts respected core excellence. In this regard, foreign companies have difficulty competing with Chinese liquor manufacturers," said Zi Meng, Managing Director of Guotai Junan Securities.
