Private brands enjoy consumers’ trust – Rupert Hoogewerf

 

Rupert Hoogewerf

Even during the current economic headwinds, private brands continue to get the trust of China’s consumers, says Hurun chairman Rupert Hoogewerf, among the 2022 China Hurun Brands’List, where Shanghai-listed Kweichow Moutai even outranked the technology giants as Tencent and Alibaba, reports the South China Morning Post.

The South China Morning Post:

Shanghai-listed Kweichow Moutai was the most valuable Chinese brand for a fifth straight year, according to the 2022 Hurun Brands List. The liquor maker, which is also one of the most valuable stocks in the country, was the only brand on the list with value of more than 1 trillion yuan (US$145.2 billion).

The liquor giant’s brand value – measured through openly available economic data and surveys among consumers – was equivalent to the total values of the next six brands that followed it on the list: Shenzhen-listed liquor maker Wuliangye Yibin, Shanghai Tobacco’s China Tobacco, ByteDance’s Douyin, WeChat and parent firm Tencent Holdings, and JD.com, Hurun said. The rankings have been calculated according to the market value of listed companies based on their stocks’ closing prices on July 29 last year, and their peers’ price-to-earnings ratios for private firms.

“Chinese consumers’ trust in private brands has obviously strengthened in the recent few years. [About] 62 per cent of the companies in the ranking were brands by the private sector, compared with 61 per cent a year ago and 39 per cent a decade ago,” Rupert Hoogewerf, Hurun’s chairman, said in a statement.

More at the South China Morning Post.

Rupert Hoogewerf is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

Are you looking for more consumer experts at the China Speakers Bureau? Do check out this list.

How Chinese brands work on their heritage – Rupert Hoogewerf

 

Rupert Hoogewerf

Hurun chief researcher Rupert Hoogewerf issued the most successful Chinese heritage brands list for 2022, raking the 550-year-old Pien Tze Huang, a traditional Chinese medicine brand, and a current valuation of just under US$30bn. “That makes it the Number One most successful Chinese Heritage Brand,” says Rupert Hoogewerf.

Rupert Hoogewerf is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

Are you looking for more branding experts at the China Speakers Bureau? Do check out this list.

How Moutai passed even Coca-Cola in market cap – Ben Cavender

 

Ben Cavender

Moutai has been a runaway success, started as the drink for China’s elite but now conquering the market for the common people too, and it gains market value, even passing Coca-Cola. Marketing analyst Ben Cavender looks at CNN at the successful liquor as it prepares for another highlight as Chinese New Year is around the corner.

CNN:

Even amid a global pandemic, Kweichow Moutai, the company that makes the eponymous liquor, had a banner year: its stock surged around 70% on the Shanghai Stock Exchange in 2020. The company, which is part state-owned and part publicly-traded, is China’s most valuable firm outside of technology — worth more than the country’s four biggest banks. Globally, its market cap has not only surpassed all other alcohol distillers like Diageo and Constellation Brands, but also Coca-Cola, which had long held the crown as the world’s largest beverage maker by market cap. Valued at 2.7 trillion yuan, or $421 billion Kweichow Moutai is worth more than Toyota, Nike and Disney, too.

“Anytime they have any stock [of the product] available, it’s going to be gone almost instantly,” said Ben Cavender, the Shanghai-based managing director of China Market Research Group. “You’ll see people clamoring [for it].”

Apart from the Chinese diaspora, however, Moutai is still virtually unknown overseas. Almost all — about 97% — of its sales come from China alone, according to its financial reports…

Being part of so many major public events in China “really set the brand in the national consciousness,” said Cavender, who likened it to another giant beverage maker, Coca-Cola, in that regard.

“That’s the same reason why Coke has actually done so well from a marketing perspective. If you look at the way they’ve done their advertising over the past 50 years, they’re at pretty much every big event. You see Coke at when the Berlin Wall comes down. You see Coke commercials at Christmas. I think Moutai is that brand for China, and so I think that part explains why it’s so popular.”..

Moutai has found a way to be “approachable for a lot of regular consumers, at least for special occasions,” while at the same time also offering collectors’ items that reach the ultra-rich, said Cavender.

“That’s something that makes Moutai, I think, different, from a lot of the international beverage brands,” he said.

It’s also been a tremendous advantage during an economically tough year: wealthy consumers who are spending less on travel may splurge more on liquor, Cavender added.

More at CNN.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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Moutai beats Johnny Walker on value - Shaun Rein

Shaun Rein

Kweichow Moutai, China's favorite booze, passed on Friday with US$71.5 billion Johnny Walker owner Diageo as the world's most valuable drink despite its dependency on the China market. They have made all the right moves, tells business analyst Shaun Rein to CNN, despite president Xi Jinping's anti-corruption drive.

CNN:

To this day, Moutai is considered the gift to give and the drink of choice to toast with on special occasions, especially big business deals. That's made it a staple at lavish banquets, the very ones discouraged by Chinese President Xi Jinping's anti-corruption campaign. 

As the campaign got under way in 2012, Moutai sales took an initial hit, but that didn't last long. 

"They got smart," said Shaun Rein, the founder of China Market Research in Shanghai. Moutai cut prices to make its baijiu more affordable and broadened distribution to make it more accessible, according to Rein. 

The drinks maker turned its attention to a wider, younger consumer base rather than the government officials to whom it had traditionally appealed. 

For the moment, that approach seems to be working. But Moutai has a huge dependency on the Chinese market, which accounts for 95% of its sales. 

It has made some efforts to expand outside of the country, but without much success. Rein says there's still potential at home, with more young people now able to afford the punchy price tag -- a 500 ml bottle (about one pint) can set you back as much as $580 -- and a slow but steady increase in luxury purchases. 

Perhaps most important, Moutai's brand is so strong in China, Rein says, that "they just don't have any real competitors."

More in CNN.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more financial experts at the China Speakers Bureau? Do check out this list.  

Moutai under austerity fire - Shaun Rein

Shaun Rein

China's most famous liquor Moutai is the Ferrari among alcoholic drinks. But when austerity is high on the political agenda, that might actually create a lot of trouble, explains business analyst Shaun Rein to Reuters. Although they might be able to circumvent those measures. Reuters:

Despite healthy financial results for 2012, this year will be tougher, especially for industry leader Kweichow Moutai Co Ltd, whose prestige brand and high prices put it directly in the line of fire for official anti-luxury campaigns. 

"Moutai is going to get hit harder because it's become the 'Ferrari' of alcohol. It's the brand that everyone is sort of scared to buy," said Shaun Rein, the Shanghai-based managing director of China Market Research Group. 

Baijiu, a potent white liquor that outsells vodka worldwide, is prized in China at official banquets and as a gift to sweeten business ties. Sales and bottom lines have surged with China's luxury boom of recent years... 

As often occurs with China's official campaigns against corruption and excess, however, market commentators say companies and consumers will find ways to skirt around the ban, cushioning the impact on those caught in the crosshairs. " 

Actually this year the real estate companies have told us they're spending more on the hard alcohol sales, and we've found when we've interviewed distributors, that a lot of the officials are going underground with their purchases," said Rein. 

"They're finding ways around the crackdown at the local level and it's very difficult to turn off the switch overnight."

More in Reuters.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

The China Weekly Hangout discussed in January 2013 why so many foreign firms fail in China. Attending are as panelist Richard Brubaker of Collective Responsibility and Andrew Hupert, expert on conflict management in China. Moderation: Fons Tuinstra of the China Speakers Bureau. Including references to Apple, Mediamarkt, Foxconn and many others.

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