Source: Maotai time and space

Recently, the Wall Street Journal's series of video reports on successful companies around the world has been updated to launch "Maotai Economics: the Road to success and Future challenges of the King of Beverage Market capitalization". In this eight-minute video, the newspaper reviews the story behind Maotai's extraordinary success and examines the spirits giant's business strategy and future challenges.

"A 53-degree Maotai is like a flowing fire," according to the video report, the Wall Street Journal directly referred to Moutai as "firewater", meaning "hot water". Reported that Maotai is well known in China, but for foreign consumers, its taste is difficult to accept, and its road to success is even more unfamiliar.

According to the newspaper's reporter Rebecca Feng, at present, Maotai's market capitalization is 295 billion US dollars, which is more than twice that of Budweiser's parent company and 10 times that of Jack Danny's parent company.

"Why does Maotai create such a huge economic value?" The Wall Street Journal analyzed Maotai Economics.

Profound historical and cultural origins

According to the video introduction, Maotai has a profound historical and cultural origin. During the war in the 1930s, the Red Army used Maotai to recuperate.

In the report, the Wall Street Journal quoted historical records: the army during the war lacked medical resources such as alcohol, while Maotai helped in medical treatment because of its high alcohol content.

"of course, the mellow and strong Maotai has also brought comfort to many soldiers who are good at drinking." According to the report, it can be seen that Maotai has left a deep impression on the main line of Chinese history.

The video shows that during Nixon's visit to China in 1972, Premier Zhou Enlai received him with Maotai Liquor to show his highest respect. Two years later, Secretary of State Henry Kissinger met with Zhou Enlai and said: "ifScratchjjbaIf we drink enough Maotai, we can solve any problem. "

"because Maotai has experienced too many historical moments, Maotai's brand awareness is very high, which explains why Maotai is a status symbol. My friends always bring Maotai to their weddings. " Rebecca said.

Scarcity is precious.

After the first Maotai themed Sotheby's auction, Paul Wong, a professional auctioneer who has worked at Sotheby's for more than a decade, said in the video that Maotai has become a more prominent category in Sotheby's auction and needs its own category, which is not a simple achievement.

"80% of consumers will buy it to drink, and 20% may buy it and save it. Even if you don't drink it now, it's safe to buy it, because well-known brands like Maotai will be ahead of the trend. " Paul Wong briefly introduced the collection value of Maotai.

Maotai is not only a safe choice for collectors, but also a safe choice for investors. Maotai is basically the anchor of value investment. " According to the report.

Despite the fluctuations, Maotai's share price is generally stable, because even during the COVID-19 epidemic, demand was quite stable, and the increase in Maotai's revenue is an indication of the company's stability, the report said.

Video analysis believes that sustained high demand and supply constraints are the reasons for the high price of Maotai liquor.

According to the video, the cheapest bottle of Maotai on the market costs about $350, but an 80-year-old bottle of Moutai can sell for nearly $40,000. A batch of Moutai from the 1970s broke the record and sold for $1.4 million.

"things are precious because of scarcity, and the high price of Maotai comes from scarcity. Just as champagne must come from France and bourbon must come from the United States, Moutai can only be brewed in Moutai Town, Guizhou Province, so the supply is usually not too high. " The video also mentions that a bottle of classic Maotai takes at least five years to brew-it uses a special kind of red sorghum, red tasseled sorghum, which is distilled nine times and aged for five years. Therefore, any drop of Maotai liquor takes a long time from production to market.

The video believes that Maotai has driven the per capita income of Maotai Town. It is mentioned that the per capita GDP of Maotai Town in 2021 is about 310000 US dollars, which is the per capita GDP of the United States in 2021. 7.ScratchjjbaMore than four times the amount of .1000 dollars.

How to continue to thrive?

According to the Wall Street Journal, ensuring that the brand continues to thrive is one of the biggest challenges facing Maotai. A brand is like a living entity that needs to be energized at any time.

For a long time, the consumers of Maotai are mainly the elderly and wealthy Chinese who appreciate the historical significance of Maotai and are able to enjoy it at formal dinners. As a result, Maotai launched innovative marketing activities aimed at young people. " Over the past two years, Maotai has partnered with a number of new brands, including different flavors of Maotai ice cream and sauce-flavored lattes, which sparked a heated debate on Chinese social media when it was launched in September, the report said. In the same month, Maotai launched Jiuxin chocolates, which cost between $5 and $10, and soon sold out.

In the video, the newspaper analyzes that another problem facing Maotai is its low popularity outside China. As a result, Maotai is trying to promote its brand overseas and expand its global consumer base.

Due to the high degree of Maotai liquor, it is not easy for many foreign consumers to accept it. According to the Wall Street Journal, looking ahead, if Moutai wants to be as stable as it is now, that's fine, but if it wants to expand more aggressively, it needs to focus on the younger generation and the global audience.

According to the video report, Maotai may still have a long way to go to become a global household name, but its dominant position in the liquor industry still exists, with its annual net profit exceeding market expectations in 2023, up 19% to $10.3 billion.

According to the Wall Street Journal, Maotai is a very large brand, which is hardly affected by the economic environment and industry cycle. Maotai is the most valuable alcohol producer in China and the largest in the world, and is likely to continue to do so.