When famous wine companies step in to control the marketPowerballestimatedjackpottodayThe time has come for the wine industry to "control speed".
Wen | Chen Feng
Recently, Xi Liquor has introduced strong market control measures to attract attention and heated discussion in the industry. it is understood that Xi Liquor has suspended nearly half of its dealers and suspended the supply of products from these dealers in the second quarter.
As a leading enterprise in the industry, what kind of market signal does the practice of wine "control goods" release? What kind of impact will it have on the current wine market?
01 practice wine "control", aim at the long term
According to the feedback from Xijiu and dealers, the current round of "stock control" of Xijiu is mainly aimed at two types of customers.PowerballestimatedjackpottodayOne is the customers who scan the code in different places, the other is the customers whose inventory rate is higher than the red line. This round of stock control is only one of the latest market strategies put forward by Xi Jiu since the second quarter of this year. In fact, Xi Jiu is a combination of "three axes", including controlling supply, adjusting investment and stabilizing order.
Xijiu has also greatly increased investment in mobile sales, market infrastructure, and consumer cultivation, fundamentally helping dealers speed up the digestion of inventory; a new supervision and inspection team has been set up to carry out special supervision and inspection nationwide, assist relevant departments to focus on cracking down on counterfeiting, infringement, illegal and breach of contract sales in the market, and maintain market order and consumer rights and interests.
In addition, for dealers who sell well in the market and sell according to contracts, Xi Liquor will also pick up goods normally and even increase moderately on the basis of the signed volume; the core is to solve the hidden dangers that may exist in the current market, maintain market order, and maintain the balance between supply and demand. to achieve benign, long-term high-quality development.
Obviously, Xi Jiu's action is to have a clear understanding of the market and confirm the effective market control strategy after careful consideration. From the fact that Xijiu can accurately implement different management and control policies for dealers under different conditions, such as suspension, control, increment and so on, we can see that Xijiu has a good understanding of the operation of its own distributors. behind this must be a set of advanced and scientific market monitoring mechanism and dynamic evaluation system to do support.
Some experts said: "large-scale control and suspension of goods will certainly have an impact on short-term performance, but for an enterprise that wants long-term development, it is essential to maintain stability in the market and safeguard the interests of dealers. In fact, wine practice is only a microcosm of the industry. At present, the channel pressure of the entire wine industry is very great, are facing similar problems, and other enterprises may also make similar actions after learning wine."
Xijiu does not blindly pursue performance, but pays more attention to reducing the burden and pressure for dealers and maintaining the healthy development of the market. In the short term, it may affect performance, but in the long run, the measure of learning wine will greatly regulate the market, bring strong confidence to dealers, and the cohesion at the channel level will also be further enhanced. it is bound to promote the long-term and high-quality development of the brand, showing its vision and due responsibility as the head brand.
02 the beginning of wine "control" or "speed control" in the wine industry?
Liu Zhenguo, deputy secretary general of the China Liquor Industry Association, once said publicly: "there is a problem of overcapacity in the liquor industry, lower consumption expectations in the external environment, weak capacity expectations and high inventories are all reflected in the liquor industry."
In recent years, when the industry entered the adjustment period, a number of industry people pointed out that the channel inventory pressure will bring a lot of negative impact. At the sugar and wine reception this spring, Wang Chaocheng, chairman of Shengchu Group, judged that the wine industry would enter a "volume era" of negative sales growth, low or zero income growth, and low profit growth for a long time.
Wine "control" is obviously aware of the channel pressure and made a timely "pressure relief" measures. In fact, it is not just drinking. Last year, Wuliangye proposed at the dealers' conference to "make every effort to promote channel profits and prevent dealers from suffering losses" and launched a series of measures such as controlling quantity and increasing marketing efforts. Luzhou laojiao has also increased subsidies to dealers. Promoting mobile sales and destocking has become a consensus in the industry.
Let's take a look at a set of data from A-share listed wine companies:
The total inventory of 20 A-share listed liquor companies reached 1363 in the first three quarters of 2023.PowerballestimatedjackpottodayThe total inventory of listed wine enterprises was only 985 million yuan in 2020.Powerballestimatedjackpottoday.46 billion yuan. Among the 20 A-share liquor listed companies, inventory accounts for more than 40% of the total assets in the first three quarters of 2023, and more than 30% has been no less than 10. (since the annual reports of listed wine companies in 2023 have not been fully released, the figures are only available in the first three quarters of 2023. )
Channel inventory is difficult to calculate accurately, but only from the growth rate and proportion of enterprises' own inventory, the pressure of inventory sales has increased significantly, and price inversion is also very common in the industry. You should know that these are the leading brands in the industry, and even if they are so, how much pressure does the entire wine industry face?
A survey shows that in many regional markets across the country, the distribution channels of second-and third-line liquor brands are slow and oversold. Many dealers feedback, a number of liquor brands are under-stock phenomenon, in the form of "pressure goods" to the dealer level to transmit inventory pressure.
Obviously, for wine enterprises, inventory digestion is very important. Whoever digests inventory quickly will be able to win in the new cycle, but blindly pass the pressure on to dealers. Once dealers break the capital chain under excessive pressure and the system collapses, wine companies will only accelerate their decline.
Compared with eagerly removing the shackles of their inventory and performance, perhaps wine enterprises should slow down their excessive pursuit of performance growth, safeguard the interests of dealers, first let dealers "survive" and maintain the soundness of the channel network. will be the correct solution to this "pressure kill".
03 "speed control" in the wine industry is extremely urgent
Why "speed control"? Because enterprises do not "control speed", distributors are under too much pressure, and the consequences of channel "high inventory" will be more serious than the enterprise's own high inventory problem.
Nowadays, the consumption willingness of the liquor market is already low, under such a background, the slow removal of inventory will inevitably lead to the slow return of funds, which will seriously lead to the collapse of the dealer capital chain. In the case of operational difficulties, some dealers have no choice but to sell goods at a low price, so it is inevitable that the price is upside down, that is, the willingness of dealers to make payments is further reduced, and the inventory pressure of enterprises is further intensified, which is a vicious circle.
Before giving up cooperation with a certain brand, Mr. Wu, the liquor agent, said helplessly: "there is no way, there is too much pressure on the goods, so we can only reduce the price and clear the inventory. Later, all parties are selling goods, and the goods from other areas have also come to me. The price has collapsed too hard." sell a loss of 20%, have no choice but to give up. "
In view of the high inventory of the channel and the possible problems, little action has been taken, mainly through two aspects to alleviate the pressure of channel inventory:
First, focus on the consumer level, through a variety of promotional means to directly stimulate dynamic sales in the market, fundamentally solve the problem of high channel inventory. For example, this time Xijiu has increased investment in consumer cultivation, and many well-known wine enterprises, such as Wuliangye, Guojiao 1573, Gujinggong and so on, have also launched promotional activities with "reverse red envelopes" as the core since last year to stimulate consumers' enthusiasm for buying through digital means.
Second, around the dealer level, through various means to ensure the stable operation of the channel network. For example, by reducing the purchase price to directly benefit dealers, giving dealers more rebates, subsidies, etc., to ease the pressure on dealers, Xi Liquor this time for the pressure of the direct suspension of goods is also the same purpose.
Of course, there are many enterprises that hope to seek new market capacity through overseas expansion strategy. For example, Maotai, Wuliangye and Fenjiu have held various activities to spread the brand in many countries, but this way must be a long-distance run, which can not effectively change the current situation in the short term.
It has to be admitted that the Chinese liquor market is experiencing great challenges at present, but for Chinese spirits that have been passed on for thousands of years, whether the price is upside down or the inventory is high, it may lead to a phased adjustment in the industry. even changes in the brand pattern will not hinder the development of Chinese liquor to a better future.
In the face of the current situation of high channel inventory, wine companies are also racking their brains to inventory, but on the whole, even if enterprises think of more ways to stimulate market consumption to quickly digest inventory, landing also depends to a large extent on the implementation of dealers.
Thus it can be seen that wine enterprises to maintain the healthy and healthy development of the channel, to invest more energy, "speed control" has almost become a necessary choice. Of course, it is not that we can not pursue performance growth, but in the process of pursuing performance growth, we must protect the "wheels" under the "sports car" of the enterprise.