Tag Archives: Wuliangye

CONSUMER: Bacardi Chases Baijiu Crowd With Tea Liquor

Bottom line: Bacardi’s new Tang tea-based liquor could do well despite its premium pricing and Beijing’s frugality campaign if it takes aim at affluent yuppies who like to try new things and are put off by the stodgy image of baijiu.

Bacardi rolls out tea liquor

It’s hard to get excited about a liquor story as the world returns to work at the start of a new week; but I’ll admit I’m just a bit intrigued by reports detailing a new attempt by global giant Bacardi to tackle China with a new tea-based spirit. Frankly speaking, I’m a bit surprised that no one has tried this before. That’s because such a liquor, if packaged and marketed properly, could quickly win over many of China’s urban yuppies who eschew traditional homegrown baijiu liquors but haven’t exactly embraced western alternatives like whisky and rum. Read Full Post…

Luxury Dip Takes Bite Out Of Phoenix

Luxury clampdown hits Phoenix

Beijing’s crackdown on excessive spending by officials has claimed one of its first victims in the media sector, with word that leading independent broadcaster Phoenix Satellite TV’s (HKEx: 2008) profits tumbled in the first half of the year due to flagging revenue from luxury goods advertisers. The news isn’t all that surprising, since Beijing’s crackdown has been going on for more than a year now. Now we’ll have wait and see how long the slowdown lasts, whether it intensifies, and who else is most vulnerable. Read Full Post…

Jiugui Retreats As Baijiu Clean-Up Looms

Jiugui retreats to Hunan

China’s homegrown traditional liquor industry has been plunged into turmoil over the last 18 months, and now the shakeup may have claimed its first victim with word that Jiugui Liquor (Shenzhen: 000799) is retreating from the national market. Of course the big question will be whether other makers of baijiu, the traditional Chinese liquor, will follow Jiugui’s lead, and whether Jiugui itself will survive as an independent company. I suspect the answer is that some limited and much-needed consolidation will finally begin to occur in this crowded and money-losing sector. But the process may be difficult, since regional stakeholders will be reluctant to give up control of liquor brands that are often closely tied with the identities of many smaller cities and towns throughout China. Read Full Post…

Wahaha Speeds Up Baijiu Liquor Consolidation

Wahaha launches baijiu joint venture

I like to write occasionally about the market for traditional Chinese liquor known as baijiu, often more out of personal interest than because I see any big potential in the sector. While many of China’s other food and beverage sectors have consolidated around a few key players over the last 15 years, baijiu has been strangely resistant to such a movement. As a result, the industry remains highly fragmented and not very interesting for investors. But recent signs are pointing to a potential consolidation finally on the way, including the latest word that food and beverage giant Wahaha is entering the field in a bid to develop a new national brand based in southwest China’s Maotai county, an area famous for the traditional liquor. Read Full Post…

Baijiu Liquor In Need Of Image Makeover

Wuliangye launches lower cost brand

It’s been nearly a year since makers of the traditional Chinese liquor called baijiu were hit by a double-whammy created by a food safety scandal and a Beijing crackdown on lavish government spending, sending the sector into a prolonged winter. Media are focusing on this one-year anniversary to chart the recent woes of top names like Moutai (Shanghai: 600519) and Wuliangye (Shenzhen: 000858) and talk about what they can do to turn things around. My view is that these companies are in dire need of an image makeover, which should include development of newer, lower alcohol products and major marketing campaigns targeting a generation of younger professionals in major cities. Read Full Post…

News Digest: September 11, 2013

The following press releases and media reports about Chinese companies were carried on September 11. To view a full article or story, click on the link next to the headline.
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  • Apple (Nasdaq: AAPL) Unveils iPhone 5S and 5C, To Come To China Sept 20 (Chinese article)
  • Skyworth (HKEx: 751) Joins With Alibaba In New Brand Kukai TVs (HKEx: 751) (Chinese article)
  • Xiaomi Developing Own Mobile OS – Reports (English article)
  • Baijiu Brands Top List Of Worst Performing Stocks For Nearly A Year (Chinese article)
  • More E-Commerce Companies Opening Brick-And-Mortar Stores (Chinese article)

Advertising Winter Enters Deep Freeze 中国广告行业进入严冬

Leading Chinese media company CCTV has been trumpeting the results of its annual advertising auction for 2013 held over the weekend, which saw spending increase by 11.4 percent despite the recent slowdown that has hit the sector. But from my perspective, these results look very gloomy indeed for reasons I’ll explain shortly, meaning advertising-dependent Internet leaders like search engine Baidu (Nasdaq: BIDU), web portal Sina (Nasdaq: SINA) and video sharing site Youku Tudou (NYSE: YOUKU) won’t have much to cheer about in 2013.

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