Due to high inventory and slow turnover, the Baijiu (Chinese white spirits) industry has shifted from an era of incremental competition to an era of stock competition this year. However, industry insiders generally believe that 2023 is a year for the Baijiu industry to undergo transformation, innovation, and upgrade, presenting structural opportunities.
During the “Double 11” shopping festival, Tmall’s live transactions in the liquor industry exceeded 1.8 billion yuan, a 628% year-on-year increase, driving domestic Baijiu growth by over 250%. In the first 28 hours of JD.com’s “Double 11,” Moutai, Jiu Shi Yuan, Guotai Jiu, and Shedao Jiu saw transaction amounts increase by 70%, 90%, 105%, and 180% respectively, while Kweichow Moutai’s transaction amount increased by 558%.
From this perspective, the alcoholic beverage market is still very hot, with major brands proudly presenting their achievements. However, Jiang Xiaobai, the former “Baijiu internet celebrity,” is noticeably absent from the top positions on various platforms’ alcohol sales charts. In fact, this once-prominent figure in the industry has been silent for a long time.
In the past few years, Jiang Xiaobai, with its innovative brand positioning and marketing strategies, quickly entered the Baijiu industry, disrupting this mature market and becoming a well-deserved industry disruptor.
This year marks the 12th anniversary of Jiang Xiaobai’s establishment. However, despite its youthful marketing concepts and brand image, Jiang Xiaobai is facing a mid-life crisis in the transition from traffic-driven to brand-driven strategies.
### 1. The Confidence and Essence of Emotional Marketing
Jiang Xiaobai emerged in the challenging environment of the Baijiu market in 2012 when the industry faced challenges like the “plasticizer incident” and the “three public” consumption ban. In response to these influences, Jiang Xiaobai chose a differentiated approach, introducing a “youthful Baijiu” with simple packaging, mild taste, and suitable for casual sipping to capture the market of “young people’s Baijiu.”
With slogans like “I am Jiang Xiaobai, life is simple,” the brand promoted a youthful image, leveraging IP characters to enhance brand recognition. Additionally, emotional value was added to the Baijiu by using nostalgic packaging and sentimental copy, leading to the rapid rise of the “Jiang Xiaobai emo style.”
Riding the wave of emotional marketing, Jiang Xiaobai significantly tapped into the market of young consumers, achieving a revenue of 50 million yuan in its second year. From 2013 onwards, Jiang Xiaobai aggressively engaged in advertising placements, appearing in various shows such as “Street Dance of China” and TV dramas like “Midnight Diner.”
The years from 2014 to 2017 were considered Jiang Xiaobai’s “soaring years,” with sales increasing from 100 million yuan to 10 billion yuan. Sales continued to rise in 2018 and 2019, reaching 20 billion yuan and 30 billion yuan, respectively. In the small bottle Baijiu market, Jiang Xiaobai’s market share once exceeded 20%, surpassing many well-established Baijiu brands that had been in the market for over a decade.
During this period, Jiang Xiaobai collaborated with animation production company 2:10 Animation to create the animated series “I am Jiang Xiaobai,” which was simultaneously released on various online platforms. This not only gave the IP a personalized meaning but also created a new channel for brand communication with consumers.
At the same time, capital keenly identified the business opportunities arising from Jiang Xiaobai’s impressive sales and brand recognition growth. According to Tianyancha, from 2014 to 2020, Jiang Xiaobai completed five rounds of financing, with investments from well-known institutions such as IDG Capital, Hillhouse Capital, and Sequoia China.
### 2. Challenges and Difficulties in Taste-Value Ratio
Despite Jiang Xiaobai’s success as a marketing case study, marketing is not always a one-size-fits-all solution. Complaints about “Jiang Xiaobai’s bad taste,” “easily causing intoxication,” and “lacking cost-effectiveness” have persisted. Some even questioned the quality, suggesting that Jiang Xiaobai might blend industrial alcohol and is not a pure grain spirit.
A professional in the liquor industry explained that Jiang Xiaobai belongs to the category of small-qu fermentation, with a simpler brewing process and a shorter production cycle. Moreover, the Sichuan-style small-qu Baijiu, to which Jiang Xiaobai belongs, is characterized by solid-state saccharification and fermentation, often using sorghum rather than rice as the main raw material. Compared to large-qu Baijiu, small-qu Baijiu tends to have a simpler taste profile.
However, the drinking experience remains the fundamental value of alcoholic products. As consumers shifted from emotional to rational considerations, doubts arose about Jiang Xiaobai’s ability to sell liquor rather than just emotions. The brand’s consistent “artistic” approach started to be perceived as “pretentious” as consumer attitudes evolved.
Reports surfaced that Jiang Xiaobai’s revenue in 2020 dropped to 2 billion yuan. The “2020 Youth Alcohol Consumption Insight Report” also indicated that within a year, Jiang Xiaobai’s market share dwindled from its peak of 20% to 0.5%. Since then, Jiang Xiaobai, known for its high-profile marketing, became increasingly tight-lipped about its performance.
Despite the decline in performance, Jiang Xiaobai took an unconventional approach by testing the high-end market and introducing the “Gold Cap” priced at 108 yuan per bottle (500ml). Facing a product plan that contradicted its target audience, Jiang Xiaobai’s founder, Tao Shiquan, stated that this was the brand’s foray from niche to segmented markets.
To promote the “Gold Cap,” Jiang Xiaobai invited 50 wine tasters and professionals to blind test the product, with results indicating that, within the same price range, the Gold Cap had the best taste among mainstream Baijiu. However, consumers did not embrace Jiang Xiaobai’s “dream of a popular Baijiu,” and its traditional products continued to dominate online sales.
Observations by Beiduo Finance revealed that Jiang Xiaobai’s offline stores, known as “Jiang Xiaobai Jiu Guan” (Jiang Xiaobai Liquor Tavern), co-operated with Taihe Music, are also experiencing a trend of consecutive closures. Recently, the Jiang Xiaobai Jiu Guan in Chengdu closed, less than two years after its opening in January 2022. Currently, only two out of the six Jiang Xiaobai Jiu Guan offline stores remain open.
### 3. Ideals and Realities of the New Alcohol Beverage Market
In addition to emerging Baijiu brands like Jiang Xiaobai, traditional Baijiu giants have also actively responded to changing consumer demands, making the youthification of Baijiu marketing an industry trend.
As early as 2016, Luzhou Laojiao collaborated with the fragrance brand Odor Library to launch a custom-made fragrance, and it later partnered with Zhong Xue Gao to create “52-degree Baijiu Slice Ice Cream,” catering to the preferences of young consumers. Recently, Kweichow Moutai and Luckin Coffee jointly launched the “Sauce Fragrance Latte,” which also received positive results.
In the backdrop of the entire market adapting to product innovation and strategic adjustments, facing the marketing momentum of traditional Baijiu giants “catching up later,” emerging brands represented by Jiang Xiaobai need to expand their development space and stand out from the competition. Simultaneously, the rise of new consumer trends adds more possibilities to the market reshuffle.
With the continuous evolution of young people’s attitudes toward alcohol culture and the expansion of life pursuits centered on pure social interactions, low-alcohol trendy drinks are entering the traditional liquor market with a powerful and promising momentum, meeting more personalized consumer demands. This highly adaptable new trend category is characterized by drinks with an alcohol content below 15%, prominent sweetness, and often includes fruity elements, such as pre-mixed cocktails and fruit wines.
Focusing on Jiang Xiaobai itself, its genes for low-alcohol trendy drinks have been active for many years. In 2014, it introduced the Qingmei Jiu brand, and in 2021, the brand’s value reached 4.196 billion yuan, ranking first among fruit wine brands. In recent years, it successfully launched the fruit-flavored sorghum wine “Guo Li Fang,” which surpassed one billion in sales within six months.
However, in 2023, Qingmei Jiu fell out of the top three in the “618” big promotion fruit wine rankings. During “Double 11,” it became a hot search due to the “anchor crying because of a reduction in promotion fees,” ultimately choosing not to discuss its promotional performance. Currently, Qingmei Jiu’s channel marketing is in full swing, but it still faces the marketing risk of repeating Jiang Xiaobai’s mistakes.
Tao Shiquan has publicly stated that the most important strategic issue for Jiang Xiaobai in the next five years is twofold: strategically becoming the star of the differentiated new alcohol beverage market and comprehensively improving operation quality.
Indeed, Tao Shiquan and Jiang Xiaobai’s “dream of becoming a star” is quite appealing. However, in front of this dream, there is still a fierce competition akin to separating the wheat from the chaff.