Question 1: Moutai has maintained a high brand value growth, what are the driving factors behind this ?
Answer: Before answering your question, I would like to express my sincere thanks to Brand Z on behalf of the Moutai people. For Moutai, you are from an international third party in the objective perspective. You have witnessed the growth of Moutai from branding perspectives. In this respect, you are also a very precious partner to accompany Moutai moving forward. We will redouble our efforts to contribute more valuable sharing to global business peers.
In recent years, the brand value of Moutai has increased year by year, and it has entered a fast path to high-quality growth at an even higher level. Behind this, several factors deserve attention:
第一、茅台“硬核”的质量标准，是品牌价值最关键的因素。即使在世界范围内，茅台酒也属于品质最好的蒸馏酒之一。与世界上很多知名烈酒一样，茅台首先成长于一个有特殊土壤、特殊气候、特殊地形的地区，同时拥有一整套复杂、严苛、漫长的酿造工艺，从原料准备、酿造到产品出厂，要经过 30 道工序、165 个工艺环节。每一滴茅台酒，需要长时间的存放，也需要工人和技师反复调配，至少经过5年时间，才能装瓶出厂。酿制茅台的原料高粱，也是独一无二的，只分布在茅台所在的仁怀等地，产量不大。它的皮较厚、多种营养物质更丰富，适合茅台多次蒸馏的工艺要求。
Firstly, Moutai's "hard core" quality criteria are the most critical factors in its brand value. Even we compare globally, Moutai is still considered to be one of the best distilled spirits. Like many well-known spirits in the world, Moutai first grew up in a region with special soil, special climate and special terrain. At the same time, it has a complex, strict and long making process, from raw material preparation, brewing and feeding to product delivery. It has to go through 30 processes and 165 technological procedures. Each drop of Moutai liquor requires long-term storage, and it also requires many experienced workers and technicians to repeatedly prepare and brew, and it takes at least 5 years before it can be bottled for sale. The sorghum ,raw material for brewing Moutai, is also unique, only produced in Renhuai and other places near where Moutai is located,with limited output. Its thick skin and rich nutrients are suitable for multiple distillation process requirements of Moutai.
In order to ensure the quality and the taste, we have not only built up a team of excellent craftmen and a team of the best liquor-making engineers, but we also have the world's most advanced distillation analysis equipment and data detection system. Moutai believes that you can lay the strongest foundation for brand value growth only if you produce the best liquor in the world.
Secondly, the capacity and space of the Chinese market provide the most powerful support for Moutai to grow.
In China, there is a special phenomenon in many industries: if you can be the best in China, it is possible that you may also become the best in the world. For more than four decades, China's reform and opening-up and economic rise have nurtured a super large market with more than 1.3 billion people —— If you can produce product which is popular and well recognized, you will certainly gain a huge space for growth.
In this regard, Moutai is fortunate to have grown in one of the most dynamic markets, and an open and inclusive economic environment. The former gives us the strength to grow, while the latter provides us the opportunity to learn from excellent peer companies such as Coca-Cola and Diageo.
Thirdly, cultural consensus and synergy have strengthened the important foundation for Moutai to make further progress.
The Chishui River Basin, where Moutai is located, is the most active industrial belt in the global spirits market in recent years. Over the past decade, the taste of Chinese consumers has gradually changed due to the better quality of sauce-flavored baijiu and its better experience after drinking. Especially in the past five years, sauce-flavored baijiu led by Moutai has become increasingly popular in the Chinese spirits market. More and more companies in the industry have begun to produce this kind of baijiu with more complex processes and higher cost, which attracts more and more consumers to be in favor of sauce-flavor baijiu.
Since two years ago, we have been implemeting the "Cultural Moutai" brand strategy, hoping to shape the corporate image and temperament with international perspective and world vision under the globalization pattern, and to offer a special cultural experience to consumer groups with different cultural backgrounds. Not long ago, we also mobilized six other peer companies to sign the Joint Development Declaration of Enterprises in the World Sauce-flavor Liquor Core Production Area, making commitments that we will create better conditions, set stricter standards, establish a better reputation, and undertake more responsibilities for the growth of the production areas along the Chishui River. I believe that with the deepening of such synergy, Moutai's brand influence will win more opportunities and broader spaces.
Question 2: Moutai has a profound cultural connotation and a long history, please give us a brief introduction in this aspect?
Answer: Moutai has a long history of liquor making. According to the cultural relics unearthed locally, it is inferred that as early as more than two thousand years ago, people in this area had already begun liquor-making activities.
Moutai was an important salt terminal 70 years ago and hence wealth was accumulated here,which created an important condition for high cost Moutai liquor making. Moutai Town is just next to the Chishui River, before the steam engine was introduced into the inland of China, goods from here were shipped along the Chishui River to the Yangtze River, and directly arrived in Shanghai.
Here in Moutai, the background is similar to that of the birth of some famous wine industry belts such as Bordeaux. It has a long liquor-making tradition, a suitable climate and geographical environment, coupled with sufficient consumer demand and a relatively convenient transportation location. All these have laid an important historical foundation to shape and grow Moutai liquor gradually.
For a product to have a great brand influence, in addition to the quality of products and services, it should also have a rich heritage and profound history as well as a strong ability to innovate. Moutai is a traditional oriental enterprise, it is our history and culture heritage, that has been shaping the image and personality of this bottle of liquor. We thank our predecessors for their continuous efforts, we owe even more to the rapid development of China, which provides us with the best display space.
Question 3: When many liquor brands fight price wars and go to the mass market, Moutai keeps its position towards high-end market, and continues to invest in brands and gains value accumulation. Why does Moutai adhere to the high-end positioning strategy? What do you think of the results?
Answer: The high-end , as we understand, is more focused on quality. From 1951, when we transformed from a small workshop in agrarian society to an enterprise in modern industry, the annual production capacity was only above 70 tons, and the annual revenue was converted to only more than ten thousand US dollars.
So, people who don't know the history of Moutai can hardly imagine that it took us more than half a century to come to this day and become the world's largest liquor company by market value. From our experience, no matter what the operation results would be , the price war has never been an option for Moutai.
In our eyes, whether you come from a rural area or from a city, whether you come from China or Europe, as long as you buy Moutai, you are our most precious clients. All what we have to do is to ensure that when consumers drink Moutai, they will have a beautiful memory, an unforgettable taste, and a special cultural experience.
This is why we have spent a huge amount of cost to promote brand culture in different countries; this is why we have to work hard to improve the service so that more people can easily buy Moutai liquor.
However, the production capacity of Moutai is limited by the natural ecological environment and ex-factory cycle, and cannot satisfy everyone's purchase demands. Strong demand for Moutai in the market also reminds us often to reflect our own shortcomings--we must do our best to learn the good practices from the world's best spirits companies, so that the consumers of Moutai can enjoy an even better experience.
Question 4: What does the Moutai brand mean to you personally, and what do you think is the differentiator between Moutai and other liquor brands? How does Moutai Group continue to build, develop and enhance its own brand?
Answer: After decades of growth, the Moutai brand has entered a new historical stage. In China, consumers highly recognize Moutai's adherence to quality and regard Moutai as a benchmark for Chinese alcoholic beverages. This is a hard earned trust and honor; internationally, Moutai has also become one of the most well-known Chinese manufacturing brands to foreign businesess, with its wide range of channels and certain influence.
For all the people in Moutai, including me, Moutai is not only a precious asset left by our predecessors, but also a historical mission that our generation must carry on. In our minds, the word “ Moutai” does not only mean a bottle of liquor or the name of a company, but also a kind of value identity related to "spirit of the craftsman", quality and integrity.
This is also the commonality of the Moutai people. Our sense of recognition and consensus on corporate reputation, quality and morality has always been very strong. We believe that the priority and importance of quality and brand are always above any other factors. In this respect, the Moutai people have summerd up many simple expressions, such as " four subordinate principles ", that is, “cost is subordinate to quality, output is subordinate to quality, benefit is subordinate to quality, and speed is subordinate to quality”; such as "no selling of new baijiu ".
In comparison, Moutai has a much bigger brand influence, compared with many of our peers. As far as I am concered, this distinction is not only a company's glory, but also means greater responsibility for such a leading company. We hope that we can use our own case to encourage more peers to attach importance to the basic cultivation of their brands, and practically set more and better positive examples for the Chinese liquor industry .
In the future, Moutai's vision of cultivating brands will not be limited to the Chinese market, but more importantly, we should attach importance to attracting more people in different regions and within various groups. Chinese people in our generation always remember that TVs were scarce when the country started the opening-up 40 years ago. When TV products were still very new to many Chinese people, those excellent multinational companies had already begun to strive to touch our hearts with well designed and creative advertisements. As a long-established Chinese brand, Moutai has been the "national champion " , and has always been committed in "going abroad ",so that we can showcase this Chinese brand to the world, tell Chinese stories, and make our voices heard.
We must first strengthen cooperation with global mainstream media channels, through various important international activities. Working together with CCTV, the "Financial Times", the "New York Times" and other heavyweight media players, Moutai has had a lot of successful brand communication cases. Our supports to Beijing Olympic Games, Shanghai World Expo, Boao Forum for Asia and other international events also contributed lots of convincing contents for Moutai's brand building.
We must remain humble, do some home-work study on the excellent companies listed on Brand Z, learn from them and get inspirations. In fact, Moutai can not achieve what it has achieved today without learning from them, they represent global business intelligence and insipirations. Our governance process, the way we describe the brand, and our vision and starting point for cultivating the brand culture all benefit from excellent companies such as Hitachi, Panasonic, Coca-Cola, and Diageo in their different development periods. The ways they conduct customer services, and their passion and innovation in assuming corporate social responsibility have all affected us at different levels.
In conclusion, Moutai should have the global vision to further strengthen brand building, further deepen brand personality and enhance the brand's global influence.
Question 5: The valuation of Moutai has surpassed that of Coca-Cola. How do you view Moutai's future development?
Answer: Coca-Cola is a company that we highly respect, personally I am also a Coca-Cola consumer. In my opinion, for its fans all over the world, Coca-Cola is not just a bottle of beverage with a special taste, it also represents a particular culture and atmosphere embedded into it.
The market value of Kweichow Moutai exceeds that of Coca-Cola does not necessarily mean that we do better than Coca-Cola. There are special factors like fluctuations in the capital market during this Covid-19 pandemic period, as well as accidental factors due to historical changes.
Therefore, we should treat ourselves with more cautions in such times, and seriously search for the advantages and wisdom from many excellent Chinese and foreign companies, such as Coca-Cola, Diageo, Apple, Tesla, Huawei. What we value the most is the enterprise itself, and its ability to correct the shortcomings for continous growth. Our highest concern is whether the quality of the product can remain stable. Our focus should be on the service experience, to see if there are better improvements.
Question 6: Do you think that Moutai is likely to become a favorite brand in many countries around the world, can you share Moutai's globalization strategy with us?
Answer: We have no doubt about this, and we’ll always strive harder.
The world has never been as interconnected as it is today, allowing people from different countries to enjoy the best products from all over the world. This is also the era of informatization and globalization that brings tremendous changes to global businesses. For consumers in most countries around the world, Moutai is an unfamiliar Chinese spirit with a mysterious oriental culture.
However, we believe in our quality and taste. As long as we are given more time, more international consumers will definitely become Moutai’s fans. It's like decades ago, when the Chinese people of our generation experienced the special stimulation of the first beer tasting, we gradually fell in love with this beautiful drink. Chinese liquor, including Moutai, will also surely attract more consumer groups in the global market.
At present, the short-term goal of Moutai in the international market is to continue to stabilize the overseas Chinese market, and through the driving by Chinese consumer groups, the popularity of Moutai liquor can radiate to more multicultural consumer groups. The medium-term goal is to further increase the proportion of Moutai overseas sales, and let our product form a relatively stable demand and consumption habit in a more international community.
The year 2020 will be unforgettable to all in their lifetime. Facing the challenges of the future, my colleagues and I are trying to identify our own weaknesses and will continue to deepen reform with world vision and match with international standards. I wish that consumers would know more about our other products while supporting Moutai, whether it is sauce-flavored liquor or high-quality fruit wine made from blueberries, these good products are produced under the same corporate culture and quality criteria requirements. I would also like to take this opportunity to express a message to consumers around the world: Thank you for placing your trust and confidence in our abilities, we will definitely work hard to build ourselves into a world-class enterprise and a world-class brand.and confidence in our abilities, we will definitely work hard to build ourselves into a world-class enterprise and a world-class brand.