news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

With the coexistence of "refusing to overstock" and the difficulty in finding products in channels, how will Jinsha Wine Industry achieve its growth target this year?

Recently, at the 2024 China Resources Wine Channel Partner Conference held by China Resources Wine, Hou Xiaohai, Chairman of the Board of Directors of China Resources Beer, clearly expressed the requirement of "opposing the pressure on distributors" and said that complaints can be made if pressure on distributors occurs. At the same time, the three major liquor brands integrated by China Resources Beer, Jinsha Wine, Jingzhi Wine and Jinzhongzi Wine, also emphasized relevant sales targets at the meeting. Among them, Jinsha Wine proposed that the company's sales orientation is transforming from "sales collection as the goal" to "consumer opening the bottle as the goal."

However, in contrast to the goal of "getting consumers to open the bottle", reporters from the Nanduwan Finance-New Wine Consumption Index Research Group found that in the past six months, the channels of Jinsha Wine's products have shrunk and it is difficult to find new products.

It is difficult to launch new products, and existing distribution channels are also shrinking

It is understood that Jinsha Wine Industry adopts the two main brand strategies of "Jinsha + Abstract", and updated its products through new products at the beginning of this year, including the main product third-generation Abstract (treasure), the new generation of Jinsha Huisha wine and Jinsha large/medium/small sauce light bottle wine series.

Taking the main product, the third-generation Abstract, as an example, according to the original plan of Jinsha Wine Industry, the new product Abstract will be launched on the market after the Chinese New Year this year, and from March to April this year, Jinsha Wine Industry also carried out outdoor publicity such as elevator advertising for the product. However, a reporter from Nanduwan Finance noticed that after the third-generation Abstract was launched on the market, the product was hardly distributed in other channels except for the flagship store on Jinsha Wine Industry's e-commerce platform.

Similar to the third-generation summary, the newly launched Jinsha Huisha Liquor and Jinsha Large/Medium/Small Jiang are also "hard to find", especially the latter which is mainly distributed in distribution channels. Nanduwan Financial reporter found that currently including China Resources Vanguard, Walmart, 1919, Waima Songjiu, etc., found that this series of bottled wine products have not been put on the shelves.

In fact, it’s not just new products. Products under Jinsha Wine Industry also seem to be gradually reducing the amount of goods released through channels.

Taking Abstract Wine as an example, Nandu Bay Finance reporter noticed in the product "Bay Area Wine Prices" of the New Wine Consumption Index Research Group that the third-generation Abstract Wine also shrank on some terminal platforms in Guangzhou and Shenzhen. For example, earlier this year, the product was sold in channels such as Qixian and Hema, but after the product was updated to the third generation, these two major channels gradually "cleared" the product.

The reporter from Nanduwan Finance also learned that after the acquisition of Jinsha Wine, China Resources Beer had expressed its intention to use resources including China Resources Vanguard to empower the development of Jinsha Wine, but interestingly, Jinsha Wine's products did not successfully enter China Resources Vanguard's channels (previously there were a small number of Jinsha Huisha wine products, which were sold out and no further stock was received), while Jinsha Ancient Wine, which is also located in Jinsha, Guizhou, was put on the shelves of China Resources Vanguard: this same city wine company had a "fight" with Jinsha Wine over trademark issues.

“No inventory pressure” and 40% growth target, how to break through the new market situation?

As a company that spent more than 12 billion yuan on the acquisition and is the only liquor company under China Resources Wine that is consolidated with a listed company, the performance of Jinsha Wine has always attracted attention from all walks of life. A reporter from Nanduwan Finance checked the 2023 annual report of China Resources Beer and noticed that the turnover and profit before interest and taxes of the liquor business in 2023 were 2.067 billion yuan and 130 million yuan respectively; if the impact of amortization of intangible assets generated by the acquisition of Guizhou Jinsha is excluded, the profit before interest and taxes is 797 million yuan. According to the senior management of China Resources Wine, this is the performance of Jinsha Wine after clearing channel inventory and resuming growth.

In the eyes of the industry, the above revenue of Jinsha Wine Industry is considered to be "cut in half", and the data compared with it is the company's sales revenue in 2021, which was 6.066 billion yuan at that time. Nanduwan Finance reporter noticed that this sales revenue data was also considered by the industry to be caused by "channel pressure", so at this year's Channel Partner Conference, China Resources Wine Industry's "refusal to pressure dealers" also meant "saying goodbye to the past operating model" and "giving dealers peace of mind".

In fact, while requiring dealers not to hold back goods, Hou Xiaohaiqiang also proposed the construction of a "community of shared destiny for manufacturers": manufacturers are responsible for "selecting and nurturing" major customers, and are responsible for market areas, responsibility allocation, and market order, while major customers are responsible for business development and daily market management; in terms of business responsibilities, market expansion is handed over to major customers, and management supervision is handed over to manufacturers; in terms of cost management, cost investment belongs to major customers, and management and evaluation belong to manufacturers; in terms of network expansion, expansion and maintenance belong to major customers, and inspection and evaluation belong to manufacturers; in terms of market order, maintenance and execution belong to major customers, and systems, inspections and rulings belong to manufacturers, etc.

It is worth noting that Jinsha Wine's high-end price range of Abstract wine has also received much attention within the company. Last year, the company initiated a cleanup and recycling of products priced below 650 yuan per bottle. At the channel conference, Fan Shikai, general manager of Jinsha Wine, said: "As of the end of 2023, taking Abstract as an example, the majority price has recovered to the level of 580 to 600 yuan, and the majority price of online authorized stores has stabilized at 653 yuan."

However, some distributors have reservations about a series of statements such as "no pressure on goods", "community of destiny for manufacturers", "inventory consumption", and "summary wine price support". In some social media, some distributors said that there are still a large number of Jinsha (mainly summary) stocks in their warehouses, "which have been stored for several years and have not been processed". A distributor who has been providing wine price data to Nanduwan Finance reporters said that although Jinsha Wine Industry took the lead in cleaning up the version channels, there is still a large inventory of the old version of Summary (i.e. Summary 2.0) in the channel. "In terms of retail prices, although we have kept the prices very low, the effect is not very good. Now many distributors are still waiting to see whether to sell Jinsha wine."

According to a reporter from Nanduwan Finance, China Resources Wine proposed measures such as "no pressure on goods", which is also a strategy adopted after the change in the liquor consumption environment. He Yong, Secretary General of the China Alcoholic Drinks Association, said that after investigation, it was found that everyone's market expectations were weaker in the first half of this year. 80% of liquor distribution companies said that the market was cold, 60% said that inventory increased, and more than 30% said that working capital was tight. At this stage, consumers hope to buy higher quality products at lower prices, but this does not conform to market rules and it cannot last too long.

"In the second half of this year, more than half of the companies will concentrate their limited resources on core products, and about 53% of distribution channel operators prefer to 'protect cash flow', and cost reduction and growth have become the common choice." He Yong said.

So, in the current new industry situation, how will Jinsha Wine Industry achieve its 40% revenue growth target this year under the strategy of "not overstocking"? The reporter of Nanduwan Finance-New Wine Consumption Index Research Group will continue to pay attention.

Nanduwan Financial News reporter Beibei