At the end of the year and the beginning of the new year, leading Chinese Baijiu companies made appearances at various New Year events both domestically and internationally, attracting attention. Among them, Wuliangye illuminated the New Year countdown opening ceremony at the New York Times Square for 2024, while Yanghe, through a New Year’s speech, elaborated on its internationalization journey and the confidence in building a global brand.
Promoting the simultaneous development of domestic and international markets and becoming an international global brand may be the important consideration for leading Baijiu companies proposing “going global” plans at the beginning of the year, seeking market increments.
According to liquor analyst Cai Xuefei, the increased focus on expanding overseas markets by Baijiu (white liquor) companies is not only a trend driven by the increasing international influence of China but is also related to the saturation and severe internal competition in the domestic consumption market. The internationalization of Chinese famous Baijiu brands going global is an inevitable result of market development.
Currently, the overseas market share of Chinese Baijiu is not high, and the internationalization of Baijiu is still in its early stages, requiring cultural immersion and cultivation of consumption habits. Many leading Baijiu companies, when discussing “going global” with Baijiu, emphasize the need for “overseas consumers to first accept Baijiu,” which is also the original intention behind Baijiu companies innovatively exploring “Baijiu+” products. While leading Baijiu brands are leading the globalization of Baijiu, they also need to quickly improve the quality standards of production areas and align with international standards.
Culture and Innovation Enhanced
At the beginning of 2024, the internationalization of Baijiu has become a hot topic of discussion in the industry. It is observed that from the dominance of Baijiu brands in the 2023 Spring Festival Gala to their participation in current New Year cultural events, Baijiu companies are aiming to promote the global layout of their brands through important festivals.
Wuliangye made appearances at various New Year events, including the New Year countdown opening ceremony at Times Square in 2024. As the official partner of the celebration organized by the China-US Friendship Association, Wuliangye presented a special cultural performance called “Harmony and Beauty – Wuliang Celebrates the New Year,” blending modern and traditional Chinese arts to showcase “Sichuan style, Chinese flavor, and international style.” During the Spring Festival, Wuliangye will also appear at the Spring Festival celebrations in Russia, Australia, the United Arab Emirates, and light shows at landmarks in many domestic cities, joining the global Chinese community in welcoming the Year of the Dragon.
Yanghe Corporation appeared in two major New Year events broadcasted by CCTV and Jiangsu TV. Before New Year’s Day, it collaborated with nine enterprises, including the National Energy Group and Mengniu Group, to conduct a “New Year’s Speech on the World Brand Road,” outlining Yanghe’s international exploration journey. Zhang Liandong, Chairman of Yanghe Corporation, stated in the speech that he hopes to build a stage for Chinese brands, promote mutual learning, enhance cultural exchanges, and help Chinese brands shine on the world stage.
At the internationalization market workshop of Guizhou Moutai held on December 30, 2023, Moutai outlined its international “going global” route. Starting from 2024, Moutai plans to gradually increase the export volume of Moutai Baijiu, sauce-flavored series, and group family products, striving to achieve the international export market planning goals by 2027. It aims to balance the domestic and international markets, creating a new pattern of “mutual support and supplementation.”
In addition, leading Chinese Baijiu companies such as Shanxi Fenjiu, Luzhou Laojiao, and Gujing Gongjiu also mentioned their internationalization visions in their New Year speeches and development plans.
Since the end of the last century, leading Baijiu companies have been the first to go abroad, and internationalization has been escalating since 2023. Cai Xuefei, a liquor analyst, told New Beijing News that Baijiu consumption is part of culinary culture, and with the increasing international influence of China, the gradual internationalization of Chinese liquor is a trend. Considering the saturation and severe internal competition in the domestic consumption market, the internationalization of Chinese famous liquor brands going global is an inevitable result of market development. With the development of the Chinese Baijiu industry over the years, famous liquor brands continue to expand production, significantly enhance their category influence, and mature production area quality standards, planning and management. Moutai, Wuliangye, Luzhou Laojiao, and others have gained certain international influence, providing favorable conditions for the internationalization of Chinese Baijiu.
Breaking through the “Acceptance of Baijiu”
Ries Consulting mentioned in its “Chinese Baijiu Market Category Opportunity” report that in 2020, Chinese Baijiu accounted for 94% of the Chinese spirits market sales, but it has not truly entered the global market, with less than 1% of sales in the international market. The highest consumption proportion of overseas spirits by category in that year was whiskey (21%), followed by vodka (11%) and brandy (7%).
Leading Baijiu companies and famous Baijiu brands began their “going global” plans at the end of the last century. However, there is still significant room for expansion in overseas markets, and the proportion of overseas revenue for various Baijiu companies is not high. In 2022, the foreign sales income of Moutai accounted for 3.43% of its total revenue, while Luzhou Laojiao, Gujing Gongjiu, and Shuijingfang had foreign sales income proportions of 0.61%, 0.13%, and 1.22%, respectively. However, foreign revenue for all these companies increased year-on-year, with growth rates of 61.91%, 83.55%, 115.76%, and 65.8%, respectively.
According to the White Liquor research report released by Shouchuang Securities in October 2023, assuming a deduction of 10% in demand from the industry side ten years later based on the base of Baijiu consumption population, the squeeze competition in the long-term cycle of Baijiu is more intense. At the strategic level, expanding the Baijiu-appropriate age group (such as internationalization) and increasing the proportion of Baijiu drinkers (such as younger and trendier) will potentially win opportunities for the development of Baijiu in the second half.
In the industry’s view, the “going global” initiative for Baijiu has been ongoing for many years and is still in its early stages, indicating that there is a blue ocean in the overseas market, and the future growth trend is relatively clear, potentially becoming an increment for the Baijiu industry.
A significant challenge in the internationalization of Baijiu is the difference in drinking habits. When red wine gradually entered the Chinese market at the end of the last century, many people were not accustomed to its taste, leading to trends like “red wine mixed with Sprite,” which has now become a thing of the past. Wines like grape wine and whiskey have already established a place in the Chinese market.
“Compared to the domestic market, the overseas Baijiu market has a lot of space, and everyone should ‘team up.’ The first issue to address is to make foreigners accept Chinese Baijiu,” said Chen Chong, Chairman of Wuliangye Import and Export Co., Ltd., when discussing the “going global” initiative for Baijiu. This reveals the direction of Chinese Baijiu brands’ efforts.
“Cultural influence shapes consumption, and consumption concepts influence consumption behavior. The internationalization of Chinese Baijiu going global is a long-term process of cultural immersion,” said the person in charge of Laojiao’s 2024 brand work meeting held recently. Consumption concepts come from cultural immersion, and continuous Baijiu internationalization market layout leads to brand cultivation. Innovative products cultivate consumption habits, and only in this way can more people come into contact with, understand, try, and form Baijiu consumption habits.
Diverse Explorations
In recent years, the brand and product expansion of Baijiu brands abroad has mainly relied on the promotion of traditional Chinese culture, enhancing brand influence, and increasing overseas consumers’ awareness of Chinese Baijiu.
Major Baijiu enterprises such as Moutai, Wuliangye, Yanghe, Fenjiu, Luzhou Laojiao, and Gujing Gongjiu have, on the one hand, showcased Chinese corporate and brand spirits through appearances at international high-end platforms and major sporting events. On the other hand, they continue to explore new paths and models for “going out” through cultural exchanges and innovative products such as Baijiu cocktails, sauce-flavored lattes, and liquor-filled chocolates, telling the story of Chinese Baijiu.
Furthermore, Chinese Baijiu can go abroad along with Chinese cuisine, pairing with different Chinese cuisines such as Sichuan and Hunan dishes, cultivating consumption habits through meal pairing, as seen in Hong Kong’s Wuliangye Grand Restaurant, which is an attempt at “Chinese liquor + Chinese cuisine” by Wuliangye.
For Chinese Baijiu to go abroad, it also needs to meet the aesthetic preferences of overseas consumers in terms of taste, aroma, and product packaging design. For example, the overseas brand “Mingjiang Sichuan Baijiu,” developed by Luzhou Laojiao in collaboration with a team of foreign experts, has been test-sold in European and American countries. The newly launched Yanghe Micro Molecule Raspberry Brandy is another attempt to meet the demands of a younger and more international Baijiu market.
“Baijiu companies actively participate in various promotional activities, including international conferences and sports events. On one hand, they can use high-end individuals and platforms to enhance brand value and influence. On the other hand, by leveraging sports and other entertainment-oriented healthy lifestyles, they can convey their brand culture. At the same time, launching ‘Baijiu+’ can take advantage of other mature brands to quickly introduce products. Through the input of Chinese traditional culture, the promotion of Baijiu can be driven, establishing positive brand recognition for enterprises, which is of positive significance for the market expansion of enterprises,” said Cai Xuefei.
The “going global” of Baijiu culture is a vast topic and a long-term task. Baijiu analyst Xiao Zhuqing believes that the consumption crowd for the internationalization of Baijiu is still mainly Chinese, and the “going global” of Baijiu brands requires a lot of consumer experience, cultural penetration, and brand logic of international operations. It needs to push forward Baijiu internationalization with international business contracts and organizational systems. The prerequisite for the “going global” of Baijiu is that leading Baijiu brands have a certain appeal and influence internationally. Brands represented by Moutai, Wuliangye, Luzhou Laojiao, Langjiu, and Gujing are leading the global development of Chinese Baijiu. However, there is also a need to quickly improve the quality standards of production areas and align with international standards. He believes that it is worth considering using experiential marketing, live streaming e-commerce, and other new tools and models for innovation. Objectively speaking, the internationalization of Baijiu is still in its early stages, and there is still a long way to go in terms of policy coordination, cultural promotion, and product education. Government and industry-level interaction and communication, innovative brand promotion forms, and assistance in the international development of Baijiu are needed.