On the evening of February 19, Moutai Group announced that starting from February 18, 2019, the group will completely stop the customization, OEM and unaudited products of its subsidiaries, including Moutai. The business, related products and packaging materials will be sealed on site without the permission of the group and will no longer be produced and sold.
One view is that this “one size fits all” approach may cause heavy losses to many brand developers and brand operators. Another theory is that this is a good thing. In the past, Moutai OEM overdrawn the Moutai brand, resulting in fake products on the market. Although this method will cause many dealers and Moutai companies to lose their jobs, it will help Moutai. The formation of brand value.
There is no reason for this action.
Moutai explained that it was to standardize the brand development and management of each subsidiary. Not only that, Moutai even pointed out that although the chaos in the brands and products of Moutai's subsidiaries has been improved after years of rectification, some subsidiaries have recently ignored brand management regulations and committed crimes.
Among them, Moutai Group Dianping criticized Kweichow Moutai Distillery (Group) Platinum Liquor Co., Ltd., saying that it has repeatedly violated the group’s brand management regulations in production and operations. Recently, major violations have occurred, and it has criticized the Moutai brand. The reputational impact was severe. Industry insiders said that such a simple and direct expression shows Maotai's determination to correct the situation from another aspect.
In fact, since "Moutai" wine became famous, Moutai Group has begun to get involved in tourism, finance, medical care, education, agriculture and other industries. Due to historical and other reasons, in addition to Kweichow Moutai Co., Ltd., which produces the main brand "Moutai", Moutai Group also owns Kweichow Moutai Distillery (Group) Xijiu Co., Ltd., Kweichow Moutai Distillery Group Health Liquor Co., Ltd. The company and Kweichow Moutai Platinum Liquor Co., Ltd., including Prince Liquor, Platinum Liquor, Laimao, Tianchao Shangpin and many other brands, are flourishing.
However, the products produced by these subsidiaries are uneven and have even caused great misunderstandings among consumers, hurting the reputation of the "Moutai" brand.
Among them, in 2018, an internal report from Moutai Group pointed out that platinum five-star wine was sold on online shopping platforms without the approval of the group and was promoted as "original liquor produced by Moutai Group". Suspected of exaggerating propaganda and misleading the public.
Liquor industry analyst Cai Xuefei said, "Moutai had high hopes for platinum wine. However, since platinum wine belongs to the niche category of health wine and does not have the ability to command a high quality premium, it relies entirely on the big brand of Moutai To achieve hype sales. At the same time, at the brand management and marketing level, platinum wine has false propaganda to expand its efficacy during the sales process, which has damaged the corporate image of Moutai’s high-end brands and industry leaders to a certain extent.”
Moutai Group has clearly proposed a slimming down plan for the brand in the past two years: first, from the brand "Double Ten Strategy" implemented by Moutai Group in 2018 to 2019, it further proposed the "Double Five Brand" for "beauty and slimming", and also It means retaining 5 brands and 50 barcodes, cutting off half of the products, and then going to this extremely ruthless one-size-fits-all approach.
This series of actions by Moutai means that Moutai’s structural adjustment is further accelerating.
In 2018, it announced plans for a new round of corporate structure adjustments, making it clear that it would clean up and rectify 51 subsidiaries, and all cleanup work is expected to be completed in 2019. At the same time, in principle, corporate management will be basically controlled within the third level, and branches and subsidiaries at the fourth level and below will no longer be established. It is understood that the 51 companies included in the clean-up and rectification have problems such as unclear positioning, multiple management levels, overlapping functions, poor operating conditions, and even "zombie companies".
This time the "pause button" is pressed on the brand development and management of each subsidiary. From the perspective of the industry, this cleanup extends from the simple withdrawal and merger of subsidiaries to the product and dealer levels. Industry insiders regard this as the protection and return of Moutai's brand assets.
Cai Xuefei believes that cleaning up surrounding brands will be conducive to the implementation of Moutai series liquor strategy and leave room for growth of series liquors. It is an inevitable move to make Moutai bigger, and it is also the need for Moutai to build its own sauce wine ecology. .
However, this "one size fits all" approach has also caused market concerns. Liu Liqing, chief consultant of Beijing Shangbingfumou Brand Agency, believes that Maotai's reduction in personalized services means that companies are further away from market economy and marketing. On the other hand, although personalized customization accounts for a small proportion of Moutai's business volume, it is not a setback for marketization. Especially for dealers or brand operators, it is difficult to guarantee interests.
In fact, OEM and barcode development are reimbursements. The liquor company is responsible for producing the product, and the dealer is responsible for subsequent sales and brand maintenance. This model was once a magic weapon for liquor companies to improve their performance. But over time, the shortcomings of this model have been exposed, that is, the product line is too long, there are many "offsprings", and the good and the bad are mixed. In particular, dealers who just want to make quick money do not do a good job in developing and maintaining the brand. Instead, they impact the core brand and cause unhealthy competition. , diluting the image and value of the main brand.
Liquor expert Jin Yufeng believes that many domestic liquor companies will experience the development process of "large single products leading sales - pack development - chaos first and then governance". Now our country's entire liquor industry has entered the stage of brand management.
In 2015, Luzhou Laojiao began to cut down its brands. According to sources, Luzhou Laojiao’s product barcodes were cut from 7,000 to 900. At the beginning of 2018, Luzhou Laojiao issued another message, suspending the acceptance of general distribution brand orders, and began to comprehensively clean up the barcodes and fees of all general distribution products.
In addition, Xifeng Wine also eliminated more than 200 barcodes in 2017, and is reducing barcodes at a rate of 20 per year. In 2017, Wuliangye cleaned up dealer brands. It is said that in July and August alone, 55 low-selling products were cleared.
For Moutai, in addition to maintaining the image and value of the brand by cleaning up private label and customized wines, it may also have the idea of ????supporting the status of its series of wines.
Cai Xuefei believes that although OEM products do not account for a high proportion of Moutai's revenue, these OEM products actually cause internal friction with Moutai's existing products, and the rectification of OEM is also beneficial. The growth of Moutai series liquor. "
It is worth noting that 2019 is also the year when Moutai Group is sprinting towards "100 billion", with the goal of operating revenue exceeding 100 billion yuan. It will clean up OEM and "downsize" the brand. It has also improved the status of the series of wines to a certain extent, created a good market environment for it, and prepared for its goal of hitting 100 billion yuan.