Recently, the significant price drop of “Sanhua Feitian” (Scattered Flowers and Flying Sky), part of the Feitian Cultural Series launched by Guizhou Maotai at the end of 2023, has attracted attention.
Recently, a reporter from Securities Times saw on a platform that the wholesale reference price of “Sanhua Feitian,” part of the Feitian Cultural Series launched by Guizhou Maotai at the end of 2023, has significantly declined, dropping from about 7200 yuan per bottle to 4500 yuan per bottle.
In response, reporters sought confirmation from relevant dealers. A dealer from Jiangsu province told reporters that due to the recent increase in the supply of “Sanhua Feitian,” the wholesale reference price has decreased somewhat but has not dropped to 3800 yuan per bottle as exaggeratedly claimed. Another dealer told reporters that the current wholesale price for “Sanhua Feitian” is 6800 yuan per bottle, and future prices will depend on market supply and demand.
Many liquor merchants and industry insiders have stated that the rumored price of 3800 yuan is not the actual transaction price. “If the price were indeed that low, we would buy as much as we could. The newly arrived ‘Sanhua’ basically haven’t reached the terminal liquor stores, so there’s no substantial trading happening.”
Price fluctuations draw attention
As part of the Feitian Cultural Series launched by Guizhou Maotai, “Sanhua Feitian” integrates Maotai culture with Dunhuang art. It quickly became the focus of the industry after its release in Sanya on the last day of 2023, attracting 66.5 million visits on iMaotai in just two days. The initial supply was 9999 bottles, priced at 2699 yuan per bottle. Due to the limited initial supply, the product was once speculated upon after its release.
Recently, a reporter from Securities Times saw on a platform that the wholesale reference price of “Sanhua Feitian” has significantly declined, dropping from about 7200 yuan per bottle to 4500 yuan per bottle. A dealer from Jiangsu province told reporters that while the wholesale reference price has decreased, it has not dropped to 3800 yuan per bottle as exaggeratedly claimed. Another dealer told reporters that the current wholesale price for “Sanhua Feitian” is 6800 yuan per bottle, and future prices will depend on market supply and demand.
According to information from platforms such as Taobao and JD.com, the current price for each bottle of “Sanhua Feitian” is above 7000 yuan.
As for the reason for the price drop of “Sanhua Feitian,” most dealers have disclosed to reporters that the supply of “Sanhua Feitian” will increase. It is understood that Guizhou Maotai will soon hold a brand new cultural event in Dunhuang and other places.
In addition to “Sanhua Feitian,” fluctuations in the prices of bulk Feitian Maotai and Xunfeng wine products have also attracted market attention. Given the current level of consumption, the market pays high attention to the stability of Maotai liquor prices, which have a significant impact on the entire liquor sector.
The bulk price of Feitian Maotai began to return to normal in late March. It is worth mentioning that after the Qingming Festival, 375ml Xunfeng wine started to be delivered, with the first batch of 200,000 bottles released, which temporarily amplified market concerns and exacerbated downward pressure on the bulk price of Feitian Maotai.
However, Chinese liquor industry analyst Xiao Zhuqing previously stated that after the traditional peak season of the Spring Festival, there is traditionally a off-season for the liquor industry, and a decrease in demand during this off-season is a normal phenomenon. Some internet bloggers publish some untrue interpretations about the price of Maotai liquor to attract traffic, which also affects the price expectations of terminal store operators. In the long run, market prices are determined by supply and demand. Due to limited production capacity, Guizhou Maotai liquor will remain in short supply for a long time. Currently, the bulk price of Feitian Maotai has returned to a benign and stable range.
Although the bulk price of Feitian Maotai has returned to a benign and stable range, discussions and disagreements about Xunfeng wine in the market continue.
It is reported that Xunfeng platform is the channel innovation and upgrade of Maotai after iMaotai, creating incremental value through cross-industry cooperation and game-driven flow, and improving the digital ecosystem. In order to attract young people and meet more diverse demands, Maotai liquor products launched on the Xunfeng platform are only sold on this platform and are distinguished from the original system.
The newly launched Xunfeng wine in the digital world of Maotai’s Xunfeng platform has a specification of 375 milliliters, priced at 1498 yuan per bottle. Huachuang Securities believes that the reduction of the 375ml Xunfeng wine trial and consumption cost can easily attract more customers and increase the opening rate.
Regarding the impact of Xunfeng wine on the prices of Feitian Maotai and other liquors, Huachuang Securities believes that Xunfeng wine will not bring substantial and drastic impacts on the bulk price of Feitian. Meanwhile, the integration of “traditional culture + digitalization” helps enrich the brand’s cultural connotations and broaden the consumer base.
Unlike iMaotai, cultural wines and Xunfeng wines launched online by Xunfeng are new products and an important way for Maotai to promote its culture. Users participating in digital activities can understand the seasonal, raw material, and process requirements of Maotai liquor brewing, better integrate Maotai liquor products with Chinese traditional culture and Maotai culture, enhance product cultural attributes, enrich the Maotai brand connotation, and further enhance brand value.
Off-season consumption affects price trends
In fact, due to the current off-season consumption period, comparing with previous years, there are signs of price decline in the liquor market at this stage.
Shengang Securities believes that the current period is the off-season for liquor consumption, and slight fluctuations in supply have a greater impact on bulk prices. After the rapid slowdown in sales after the Spring Festival, bulk prices will reach a temporary low point. In addition, with the delivery of Xunfeng wine, which has stronger substitutability for popular products at the specification level, channels are concerned about the large increase in this part of the increment, continuous supply pressure on existing product sales of Sanhua Feitian, and weakening future expectations.
Looking ahead, Shengang Securities predicts that the industry is entering a stage of adjusting prices in the off-season, and leading real estate wines and sub-high-end leading companies still have the strength to slightly raise prices for products. Key indicators such as inventory and bulk prices are expected to further improve during the intensive holidays such as May Day. Looking at the whole year, commercial and personal mass consumption is expected to compensate for changes in demand scenarios such as wedding banquets, and the overall sales speed through channels will return in 2024. The real estate wine and sub-high-end inventory will be higher than the same period, changes in the competitive landscape and the growth of segmented price bands of liquor companies are worth paying attention to, with Jiushiyuan and other potentials expected to continue.
Guotai Junan believes that after this round of adjustments and corrections, Maotai liquor bulk prices will move towards a new balance, and trading structures will begin to optimize. It is expected that subsequent Maotai liquor bulk prices will be more in line with the economy and re-enter a relatively stable state. Considering the enhanced marginal impact of Maotai on the industry, after the formation of a new balance in Maotai liquor bulk prices, it will be conducive to the industry’s medium- and long-term development, and the value of the industry will be further highlighted. Currently, the concentrated trend in the liquor industry is further strengthened. Leading companies in various price segments are the focus of allocation. At the same time, with the increase in the dividend payout ratio of mainstream companies, the absolute income value under advantageous business models will be more prominent.
Guolian Securities believes that in the short term, the head brands have returned to normal after the Spring Festival, with stable sales during the peak season, strong resilience of high-end and regional leading brands in the report, and the market’s expectations for the performance of sub-high-end liquor have also been revised. In the current off-season, controlling volume and supporting prices have had good effects, which is expected to provide some support for the sector. In the medium and long term, the sector is in a stage of bottom adjustment, and in addition to the expansion of total demand, the acceleration of supply concentration is expected to become the main driving force for the next round of liquor bull market.