news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

"Why is Tinghua Liquor so delicious?" In a residential community elevator, a Tinghua Liquor poster with a new slogan suddenly appeared. This liquor brand that was once named by "3.15" has now made a comeback. And this poster is only a corner of Tinghua Liquor's re-entry into the public eye, and its tasting stores have also opened for business. Recently, a Beijing Business Daily reporter came to the Tinghua Liquor Beijing Tasting Center as a consumer. Compared with the high-profile opening, the company's stores are relatively deserted. Behind the heavy marketing investment in Tinghua Liquor, its parent company ST Chuntian has long mentioned that it will improve the performance of the wine business segment in 2024, but it seems difficult for Tinghua Liquor's high-end brand image to be recognized by consumers and then drive the company's performance. Recently, ST Chuntian disclosed its semi-annual report showing that the company's net profit loss in the first half of the year was nearly 60 million yuan.

Tinghua Wine Beijing Tasting Center Store

Resumption of business

According to recent market news, starting from July 27, Tinghua Liquor brand advertisements covered high-end buildings in 32 core cities, and more than 150,000 elevator posters were posted nationwide. Tinghua Liquor stores recovered earlier than the advertisements. It is understood that Tinghua Liquor's 34 distributors and 16 experience stores in 25 cities including Beijing, Tianjin, Shanghai, Chengdu, Chongqing, and Shijiazhuang have gradually entered a stable operating state. After calling the official website of Tinghua Liquor, a Beijing Business Daily reporter learned that the Tinghua Liquor Beijing Tasting Center had started operating in May and has remained in operation ever since.

Recently, a reporter from Beijing Business Daily came to No. 10, Dongdaqiao Road, Chaoyang District, Beijing, which is also the Beijing tasting center of Tinghua Liquor. The Shanghai Stock Exchange code of its parent company ST Chuntian, "600381", is marked on the door. When entering the store, a clerk came forward to warmly welcome the reporter and introduced Tinghua Liquor.

The clerk introduced that the two types of wines available for sale in the store are Luzhou-flavor and Jiangxiang, both priced at 5,860 yuan (standard packaging) and with a capacity of 750 ml. In addition, both Luzhou-flavor and Jiangxiang have premium packaging at 58,600 yuan per bottle, but the premium packaging is only for export and not sold domestically. When introducing the product to the Beijing Business Daily reporter, the clerk mentioned that the difference between Luzhou-flavor and Jiangxiang wines lies in the original wine. The craftsmanship is the same except for the original wine, and the original wine is the reason why Tinghua wine is so expensive. The original wine is equivalent to high-quality old wine that is more than 10 years old, which is already very expensive. Tinghua Wine will also use advanced technology to brew and process the original wine again to enhance the taste of the wine and the feeling it brings to the body.

When the reporter mentioned the high price, the clerk at the Tinghua Wine Tasting Center in Beijing said that there is also a promotion in the store, buy five get one free, equivalent to 4,883 yuan per bottle. When the reporter showed great interest in the Tinghua Wine premium packaging, the clerk told the reporter that if the purchase is over 290,000 yuan, a bottle of premium packaging can be given, and the order can be placed directly in the store, and the goods will be delivered by express delivery.

Changed the play style

This year, Tinghua Liquor was mentioned at CCTV's "3.15" gala, and its price of 58,600 yuan per bottle was criticized by the market. Now, after "3.15", the premium package of Tinghua Liquor at 58,600 yuan per bottle is no longer sold in China. As for the reason why it is no longer sold in China, the clerk told the reporter "some market reasons".

However, ST Chuntian also changed its strategy, offering a premium package at 58,600 yuan per bottle for free. In addition, when the reporter repeatedly expressed his desire to buy the premium package, the clerk hesitated and did not explicitly refuse the reporter from buying the premium package, saying "you can buy the standard package first."

Zhu Danpeng, a Chinese food industry analyst, told Beijing Business Daily that China's liquor consumption has been greatly segmented in recent years, including ultra-high-end, high-end, mid-to-high-end, sub-high-end, mid-range, mid-to-low-end, and low-end, which has created a lot of consumption levels and also brought development space to Tinghua Liquor under ST Chuntian. "This time, ST Chuntian should make a big investment to create an ultra-high-end image for Tinghua Liquor. In terms of product positioning, it matches the ultra-high-end brand positioning, but how to implement the ultra-high-end is the top priority and the challenge it faces."

Referring to the market challenges of high-end liquor, Song Xiangqing, vice president of the China Society of Business Economics and chairman of the Free Trade Port (Zone) Special Committee, told the Beijing Business Daily reporter that there are mainly three mismatches. First, the quality and positioning do not match. Positioning in the high-end or ultra-high-end market, but poor quality or instability, etc., may seriously affect the brand image. Second, the pricing does not match the marketing target. High-priced products, such as the boutique Tinghua wine, are priced as high as 58,600 yuan/bottle, and the standard Tinghua wine is also priced at 5,860 yuan/bottle, but the advertising and marketing targets are locked on high-speed rail or office building groups, and the marketing investment and effect will be difficult to be proportional. Third, the advertising does not match the concept, quality and performance. It always claims to be healthy, but does not remind drinkers, and even misleads consumers to drink more. This phenomenon will also become one of the "fatal holes" faced by high-end liquor companies.

Return to the old story

Dreaming of Laojun and hiring a Nobel Prize winner as co-chief scientist, these old stories that made Tinghua Liquor "out of the circle" have returned again and are presented in the form of posters in the Tinghua Liquor Beijing tasting store.

When talking about Tinghua Liquor, one has to mention Zhang Xuefeng. There is also a poster about Zhang Xuefeng in the Tinghua Liquor Beijing Tasting Store, calling him the chief designer of Tinghua Liquor. In addition to marketing Zhang Xuefeng, the Tinghua Liquor Beijing Tasting Store also has posters of three Nobel Prize winners, including Feride Murad and Avram Hershko, who are all chief scientists of Tinghua Liquor.

The clerk told the Beijing Business Daily reporter that "many people buy Tinghua wine, and those who have come into contact with us (wine) will continue to drink our wine." In the past, Tinghua wine has mentioned in advertisements that this wine has the effects of enhancing immunity, improving sleep, ensuring male erectile function, regulating physiological disorders, and anti-aging, which is also an important reason why it was named in the "3.15" campaign.

Now, when introducing the wine to the Beijing Business Daily reporter, the clerk did not mention the aforementioned effects, but mentioned two words, cross-era and subversive. When the reporter mentioned the effects of the wine, the clerk said bluntly, "There are regulations that cannot be said, you can experience it yourself." The clerk further stated that Tinghua Wine is a cross-era liquor, which is more subversive than traditional liquor. "Because people now pay more attention to health, our wine aims to make people feel more comfortable." The clerk said, "Its harm reduction and benefit to the body will be more obvious. For example, our wine is not like many other wines. After drinking it, you will feel very uncomfortable when you wake up the next day. Instead, it will make you refreshed and more comfortable and gentle for the body."

In fact, "disruption" has been the marketing point of Tinghua Liquor for many years. However, Zhang Xuefeng, who is good at storytelling, seems to have not yet come up with a new story for Tinghua Liquor.

The news of Tinghua Liquor's return to the market did not come without any trace. Previously, ST Chuntian had stated that according to the company's annual operating plan, it plans to improve the performance of the liquor business segment in 2024, and carried out relevant marketing and market investment work in the first quarter. However, the high-profile opening of Tinghua Liquor has a relatively deserted store. During the more than one hour that the reporter was in the store to learn about Tinghua Liquor, no customers came.

If Tinghua Liquor’s high-end brand image wants to be recognized and accepted by consumers, ST Chuntian still has a long way to go.

In the latest semi-annual report disclosed by ST Chuntian, the company also mentioned the impact of the "3.15 report" on the company's Tinghua Liquor, saying that the company had suspended the operation of the liquor business in order to actively cooperate with the inspection of the market supervision department. In the subsequent operations, the company will further standardize the sales behavior of employees while striving to overcome the impact of adverse factors based on the current environment of reduced consumer willingness and the actual situation of great inventory reduction pressure and price fluctuations in the liquor industry.

Song Xiangqing said that there are many key factors that influence consumers to buy high-end liquor, including product quality, brand awareness, price, taste and flavor, gift-giving needs, brand positioning, dealer relationships, marketing strategies, product innovation, and brand rejuvenation. Liquor companies need to consider these factors comprehensively and formulate corresponding market strategies to meet the needs of different consumers.

Betting on Tinghua Wine

Tinghua Liquor is positioned as a high-end liquor, and its main demand is to occupy an advantage in gift-giving and business banquets, but the market demand for this product is not high. With a heavy bet on Tinghua Liquor, it is not easy for ST Chuntian to turn around.

Recently, ST Spring disclosed its 2024 semi-annual report. The company achieved operating income of approximately 138 million yuan in the first half of the year, and the corresponding attributable net profit was still in a loss state, approximately -59.8699 million yuan. In addition, ST Spring's sales expenses in the first half of the year were approximately 83.5146 million yuan.

Regarding the company's operating conditions in the first half of the year, ST Chuntian also admitted that since the wine and beverage fast-moving consumer goods business segment was affected by the "3.15 report" at the end of the first quarter, and the second quarter was the off-season for liquor sales, sales and revenue of related products failed to reach expected targets, resulting in the company's overall operating losses.

In addition, ST Chuntian also received a fine recently for Tinghua Liquor being named by CCTV on March 15. On June 27, ST Chuntian disclosed that its subsidiary Beijing Tinghua Trading Co., Ltd. (hereinafter referred to as "Tinghua Trading") received an "Administrative Penalty Decision" issued by the Beijing Chaoyang District Market Supervision Administration on June 25, 2024. Due to illegal publicity, Tinghua Trading was fined 800,000 yuan.

It is understood that ST Chuntian currently mainly operates in two business sectors: fast-moving consumer goods (FMCG) and health. Among them, the fast-moving consumer goods business mainly involves the sales of a series of high-end liquors represented by "Tinghua". However, since entering the fast-moving consumer goods business in 2019, ST Chuntian has not been doing well in selling liquor.

The financial report shows that in 2019, ST Chuntian was still profitable, and the company realized an attributable net profit of approximately 5.8078 million yuan that year. In 2020, the company's net profit turned sharply to loss, and the attributable net profit was approximately -320 million yuan. In the following 2021-2023, ST Chuntian's net profit continued to be in the red, and the attributable net profit was approximately -249 million yuan, -288 million yuan, and -268 million yuan, respectively. Among them, the net profit loss in 2023, ST Chuntian bluntly stated that during the reporting period, the company continued to increase product promotion expenditures and market investment in both business segments according to the needs of market expansion, and the relevant products have not yet achieved matching sales scale and profits.

In response to relevant issues, a Beijing Business Daily reporter sent an interview letter to ST Spring, but as of press time, the other party had not responded. In the secondary market, since mid-April 2022, ST Spring's stock price has been in a volatile downward trend. As of the close of August 12, the company's stock price was 3.05 yuan per share, with a total market value of 1.791 billion yuan.

Industry observer Hong Shibin told Beijing Business Daily that the high-end liquor market is highly competitive. In addition to traditional high-end brands such as Moutai and Wuliangye, other regional brands such as Shuijingfang and Yanghe are also grabbing market share. For high-end liquor companies, the key to maintaining competitiveness lies in continuous innovation, constantly launching new products that meet consumer needs, and improving brand influence and loyalty. In addition, it is necessary to pay attention to market trends, actively carry out online and offline marketing activities, and strengthen interaction with consumers.

Beijing Business Daily reporter Ma Huanhuan and Ran Lili/text and photos