The price of Maotai is so high that there is no essential difference between Pu’er tea, Tibetan mastiff, Cordyceps, tide shoes, and even tulips.
Editor’s note: This article is from WeChat public account “Competition with luck” (ID: ShinengResearch), author Li Tao.
The news of Maotai’s price cuts in the past few days has been raging, and the company’s share price has also experienced a roller coaster that has plummeted and skyrocketed. I have just seen the liquor industry some time ago, and I feel that Maotai is a company worthy of talking about. Compared with many investors, they will look at it from the perspective of consumer goods such as “addiction” and “strong brand”, but in fact Maotai has very strong financial attributes, and it is possible to understand Maotai from the perspective of financial stocks. Is a better angle.
One, a special dealer group
Everyone knows that the price of 53° Flying Moutai has been rising year by year and has the characteristics of no market. According to a survey conducted by brokers in June of the 19th, the price of 53° Feitian Maotai in some terminal retail stores has exceeded 2,500 yuan, and the products are scarce, and many consumers can’t afford them.
(Public Data Collation)
This has led to a very unique behavioral characteristics of dealers: general consumer goods dealers can’t wait to sell their stocks as quickly as possible, this is to quickly close the funds, but also to prevent the goods from selling out, but Moutai dealers are completely No such worry.
On the one hand, Maotai dealers have strong confidence, and goods can be stably appreciated in their hands. Moutai has no shelf life. The longer the year, the more valuable it is. The dealers have the confidence to hold Moutai in their hands and wait for their appreciation. Therefore, they will generally sell the goods in their hands and do not rush to sell them; some oxen will also eat and bear Part of the dealer function.
On the other hand, Maotai’s dealers are the most abundant liquor dealers on the market, able to eat large quantities of stock and hold for a long time. As shown in the following figure, the profit margin left by Maotai to dealers is the richest among all liquor companies. The goods are sold well, and the profit margin is high. This is fatal to the attraction of dealers.
Moutai itself has very high thresholds (the threshold for Moutai dealers in 2013)It is a one-time payment of 63.656 million yuan; in 2014, Maotai invested in the township and county-level areas, the threshold is a minimum of 8 million yuan in the year to purchase goods, in addition to want to become a Maotai dealer not only have money, but also have local political and business resources), rich The profit margin and strict entry barriers make Moutai have a group of financially strong distributors who can eat large quantities of stock and hold for a long time.
Also is a high-end liquor, Wuliangye’s channel profit margin is completely different from that of Maotai
For general merchandise, the demand for reseller purchases depends on the needs of downstream consumers; but for commodities with significant appreciation expectations, dealers’ purchases are already unrelated to downstream, and are related to value-added expectations. Moutai has been limiting the dealer’s purchase quota, but it can’t stop the dealer’s active purchase. And dealers are not in a hurry to sell and put inventory in their hands, further leading to scarcity of goods at the retail end. This is also the reason why Maotai’s production capacity is expanding year by year, the price is getting higher and higher, and it is becoming less and less common at the table.
Second, the scarcity of the production side is not the reason for the price increase of Maotai
A lot of people think that Maotai is low because of low production, and it will also say that “Maotai only produces Maotai Town, so it is scarce”, which is obviously washed away.
In fact, the high-end wine production rate of Luzhou-flavor liquor is much lower than that of Maotai, which is more than 20,000 tons. Thousand tons, while Maotai is 49,700 tons, Wuliangye plus Luzhou Laojiao is not as good as Maotai’s wine production.
This is because the output of high-end Luzhou-flavor liquor is very affected by the age of the Dianchi Lake. In the Ming Dynasty, 10 kg of Luzhou-flavor liquor can get 6~7 kg of high-end liquor, fifty or sixty years. Dianchi produces 10 pounds of wine but only gets 1 kilogram of high-end wine. The scarcity of the year’s Dianchi Lake directly determines the high-end liquor produced by Luzhou-flavor liquor is very difficult. In contrast, the high-end wine production rate of sauce-flavored liquor is higher than 90%, and it is relatively easy to produce high-end wine.
“Only Maotai Town can produce Maotai” is also not a reason for scarcity. We must know that Maotai Town also has a large number of scattered wine cellars. After 13 years of industrial depression, more than half of the wineries stopped production. Local brewing resources are simply not scarce.
(Moutai’s capacity is expanding year by year)
Moutai’s production capacity has not been able to expand for many years. One important reason is that the brewing cycle of sauce-flavored liquor is 5 years, which means that it takes at least 5 years for a factory to start building. Funds, the cash flow in the early period is really bad. If Moutai can’t sell a high enough price in the market, such a rigorous production cost is very difficult to cover. In addition, early companies obviously do not have enough capital flow to expand production capacity. It should be known that before and after 2000, Maotai’s operation was very difficult. The sales volume and price were far lower than Wuliangye. There is no glory of the liquor leader at present.
About Maotai’s annual price increase, there is another mystery behind it.
Third, take Pu’er tea as an example to see the logic of commodity speculation
First come to the conclusion that the price of Maotai is so high that there is no essential difference between Pu’er tea, Tibetan mastiff, Cordyceps, Chaozhou’s hype and even tulip.
The routines for all hype products are similar:
1 control source to create scarcity;
2Excavation selling points are generally cut from the perspectives of scarcity, appreciation, efficacy and culture;
3 High-profile promotion and publicity to the public, creating a prosperous scene through self-directed auctions;
4 demonstration effect, the people in the advanced field earned money and attracted the captains
We use Pu’er tea as an example to analyze the routine of hype. At first, Pu’er tea was a very small tea. In 2004, the price of one kilogram of Tieguanyin could buy 10 kilograms of Pu’er tea. However, when Pu’er tea was fired to the most fierce, “Dayi 7542” rose from 4,000 yuan to 22,000 yuan a year; and after the market collapsed in 2007, it fell 60% in just a few days, countless teas. Business is stuck.
The hype of Pu’er tea can be divided into four stages:
Stage one, suck:
After 2000, Hong Kong and Taiwan tea merchants began to lay out the Pu’er tea market. At that time, Pu’er tea was still a very small category, and the purchase price per kilogram of old tea was not even more than 10 yuan.
Hong Kong and Taiwan tea merchants have done two things:
One is the acquisition of old tea by tea factories, tea houses and supply and marketing cooperatives in various cities in Yunnan. In the past three years, most of the old teas in Yunnan have been purchased.
The second is to intervene in the merger and reorganization of Yunnan Tea Factory and Chashan (Tea Garden), and control the production end from the source. To this day, there are still shadows of Hong Kong and Taiwan capital in the restructuring of the large tea factory shareholders.
Stage 2, looking for selling points, public opinion
Puer tea itself has some selling points that are very easy to come up with, including:
1 Monopoly and Rareness: Pu’er tea has unique growth conditions and can only grow in the hilly areas on both sides of the Lancang River. Among them, Linyi, Simao and Xishuangbanna are the most concentrated.
2The production process is complicated, and the longer it is, the more valuable it is: The production process of Pu’er tea is complicated and needs to be stored for a long time before it can be sold. The storage time generally takes 2~3 years, dry storage Chen 5 ~8 years of cooked tea is top grade.
3 Rich cultural connotations: The Qing Dynasty was selected as the tribute tea and the ancient tea-horse road. The legend has a long history and there are enough highlights.
(When you read these three points, do you think of Maotai one by one?)
In order to tap the value of Pu’er tea, the speculators invited a large number of tea masters to preach tea culture, publish publications, and establish a tea research institute. Professor Deng Shihai of Taiwan Normal University has published Pu’er tea masterpieces “Pu’er Tea” and “Pu’er Tea Continued”. He was also the first person to collect old tea in the mainland in 1999. He advocated “drinking cooked tea and old tea” in the book. And the collection of new teas, which makes Pu’er break away from the attributes of consumer goods and integrates the attributes of financial products investment preservation, creating the basis of speculation.
Since 2005, Hong Kong and Taiwan speculators have made a lot of public opinion in the media, and they have a variety of techniques, such as antiques, weight loss, health care, charity, and the Olympics, but they can all be smashed. He also planned the “Caravan to Beijing”, engaged in charity sales, engaged in press conferences, built Hope Primary School, and an endless auction, which attracted a lot of attention.
On May 1, 2005, Yunnan Mabang took hundreds of kilograms of Pu’er tea to Beijing, and resumed the 166-year tea tribute, recreating the feat of Ruigong Jingcheng. This started the popularity of Pu’er tea
In terms of academics, Hong Kong and Taiwan tea merchants sponsor research institutions to explore the health care mechanism of Pu’er, and the research institutes such as the Tea Institute of the Chinese Academy of Agricultural Sciences, the Tea Institute of Yunnan Academy of Agricultural Sciences and Yunnan Agricultural University all focus on the quality formation mechanism and health care function of Pu’er tea. A large number of research papers have been published.
At the same time, profitUse various social resources to lobby the government to invest in the Pu’er project; to enter the local layout of Pu’er resources on the grounds of overseas capital investment, on the one hand, low-cost monopoly of upstream resources, and also obtain the extraordinary support of the local government in the name of foreign capital.
Phase 3, pull price:
The speculators will prioritize the hoarding of old tea as a luxury item, and play the slogan of “ten times ten times”. The self-directed self-directed auction will boost the price and drive the low-end varieties to slowly ship. .
At the same time, the speculators who have controlled the upstream tea factory and the tea house strictly control the quantity of Pu’er tea shipped in the market, and continue to raise the terminal price by creating an imbalance between supply and demand.
With the support of price, coupled with the concept of “value-added storage” and the packaging of culture, Pu’er tea has become a symbol of identity and culture. A large number of retail investors who did not understand the situation poured into the market and further pushed up the price.
In the late stage, the finished product is in short supply, and some people even start to speculate on the “tea”: the speculators start to speculate when the new tea is not on the market. At that time, getting the tea means the opportunity to get rich. People are worried that Pu’er tea can’t be sold.
Phase 4, Shipment:
When the bulk of the retailers took over, the price of Pu’er tea has been turned over several times, and the dealer has started orderly shipments. Pu’er passed through the first- and third-level dealers to the terminal retail investors. When the dealers sold all the goods, the price of the third-tier market was still rising. When the retailers followed up, they found that no one took over, so there was the Pu’er tea market in 2007. Flash collapse.
Is the above-mentioned hype of Pu’er’s operation method, will you let everyone think of Maotai? At least in the induction of selling points, the two have a high degree of similarity.
Puer tea can only grow in the hilly areas on both banks of the Lancang River. The sauce can only be brewed on the banks of the Chishui River. The production process of Pu’er tea is complicated. It takes 5~8 years to make the top grade, and the Maotai brewing process is complicated. In 5 years, it was brewed; Pu’er Tea was selected as a tribute, and after Maotai Tang and Song Dynasties became a tribute wine, and it was deeply loved by a number of founding fathers such as Premier Zhou. There are a large number of tea experts who advocate the various mechanisms of Pu’er tea. There are also a large number of wine experts who advocate the rich flavor and liver protection of the sauce. At the same time, both of them have the characteristics of being younger and more valuable…
How many stories that are circulating in the market today are traceable? For example, there is “a year of Maotai’s participation in the famous wine selection meeting, and the organizing committee carefully asked the central government to add it”. This story is in the middle of the room.It is widely spread. Who knows if this story is true or false. What kind of purpose did it first spread? However, such a story does have a strong topicality. Many people talk about the “legends” that Maotai will talk about. When the last three become tigers, no one will trace the authenticity behind the story.
In addition to selling points, Maotai and Pu’er tea are highly similar in the way of shaping high-end images. Before 2005, the boss of domestic liquor was still Wuliangye, and Maotai took the lead in selling the old Maotai in the market, and after selling it to a very high price, it drove the market’s attention to ordinary Maotai, which made the Pucha tea priority to make old tea. The means of luxury goods are exactly the same; Maotai also did a lot of government public relations in the early stage, and received the full support of the local government. It also gained a group of loyal users in the political circles, and further established Maotai’s leading position in liquor through their influence.
A lot of factors are directed at a fact: The price of Maotai is rising year by year, there are quite a few shadows similar to Pu’er tea, and this kind of speculation mechanism, if everyone is interested in Excavation, it will be found in many fields such as Clivia, Yellow Pear, Cordyceps, Tibetan Mastiff and so on.
Fourth, see the stock price of Maotai from financial attributes
The pricing mechanism for such items in Moutai is similar to the pricing mechanism for house prices: the price of a region is actually determined by the price of a small number of tradable houses, although most houses are in a non-trading state, but if they are tradable A small number of houses sell for a high price, and everyone will default to the price of the house in the area.
Therefore, there are very few tradable 53° flying Moutais on the market. Due to its scarcity, the price is pushed higher and higher, which determines the price of the 53° flying Moutai. This violent rise will attract more people into the game. Some people will find ways to purchase and hoard from various channels, and some people will use the lever to enter the speculation to further increase the terminal scarcity.
This is why the acceleration of Feitian Maotai in the second half of the price increase cycle is getting bigger and bigger. The scarcity of the propaganda rendering superposition terminal in related areas strengthens the consensus on price increase, and the consensus has in turn further strengthened. Hype and stocking. Market sentiment and transaction price strengthen each other, which is almost the best case of Soros’s theory of reflexivity. The general price increase of mass consumer goods is often driven by the rising cost of raw materials, and the price increase of such products as Maotai is driven by its strong value-added expectations. Once the flywheel turns, it can continue to self-reinforce, price increase can drive the increase in sales, which together boosted the stock price of Maotai.
There must be a bubble under such a mechanism. The speculative head of the head speculates on Maotai. The speculators at the waist and tail have no financial resources and resources to hoard Maotai, but they also extend their hand to other liquor brands such as Wuliangye. Of course, Maotai, as the most prestigious brand in liquor, will still be consumed by financial consumers in important banquets and banquets. We do not deny the superiority of Maotai’s quality, otherwise there is no premise of speculation, but in the later stage of the bubble, it is hard to tell how many Maotai were consumed in this market, and how many Maotai were hoarded as hype tools. It’s up.
Since 13 years, the Chinese liquor market has experienced severe shocks. A large number of liquor companies are facing huge crisis. The terminal price and sales revenue have fallen sharply for two or three consecutive years, and the entire liquor market has shrunk a lot. Many people will attribute the shrinkage of the 13-year white liquor market to plasticizers and limit the consumption of the three public consumption, leading to a shrinking of end consumer demand. However, the author believes that although the three public consumption has an impact, it is at best a fuse rather than a root cause. Just as the Sarajevo incident is only the fuse of the First World War, the fundamental reason is the imbalance of political and economic development between the imperialist countries. .
Otherwise, after the three public consumption restrictions on official drinking, Maotai as the most important liquor brand for government banquet, should be the hardest hit, but 13 years, 14 years Maotai is precisely the only sales, profits There is no decline in high-end liquor companies.
In fact, the core reason for the decline in the liquor market in the past 13 years was due to the evaporation of the value caused by the excessive bubble in the liquor market. At 12 years, the retail price of Maotai’s terminal has reached 2,300 yuan per bottle. It is necessary to know that the per capita disposable income of urban households at that time is only 2,000 yuan. The disposable income of a city resident is not enough to consume a bottle of Maotai. The bubble at the time was severely visible.
(Source: Wind, Zhongtai Securities)
In this highly unsteady state, policy limitations and plasticizer storms are undoubtedly highly catalytic, causing the foam to rupture rapidly in a short period of time. The reflexive theory was once again staged, and the dealers of the liquor brands stepped out of the inventory, resulting in a big dip in the terminal price, further aggravating market panic and stimulating dealers to stock up. Dealer capital chain breaks unable to continue the gameThe result of transmission to various wine companies was that the ex-factory price was forced to be lowered, and the shipments were also greatly reduced. This disaster has spread to the whole industry, from the high-end liquor of Wuliangye to the Yanghe and the plaques.
But for Moutai, it’s not the case, although the terminal price is indeed facing the waist, the stocks scattered in the various levels of the channel are cleared a lot (after all, there are many players in the waist tail who borrow levers), but Thanks to the high barriers to dealers, a large number of head dealers have sufficient funds to bear the impact, and they can continue to purchase from the manufacturers, maintaining the sales revenue and profits of Maotai in those years.
When the bubble is exhausted, the market gradually recovers, and the liquor starts a new round of price increase under the leadership of Maotai. (Is it feeling like Bitcoin is… even after the Pu’er tea crash, there are follow-ups. The second wave of hype).
It is undeniable that Moutai is extremely powerful both in terms of product strength and brand power. But I don’t think that understanding Moutai’s stock can be hard-wired from the perspective of ordinary consumer stocks. If the brand can explain all the problems, why is the other product line of Maotai also bearing the brand of Maotai, but there has never been a situation like the price of 53° flying Maotai rising and the price is no market?
V. The crazy speculation on Maotai in the market is what Moutai Group wants to see?
Speaking of this, maybe a friend will ask: Is the Maotai Group’s crazy speculation in the market want to see it?
The rise in the retail price of the terminal is definitely a good thing for the company, because for Moutai, the price increase can drive the increase.
But this is also contradictory. If the bubble degree of the terminal price can be controlled to a reasonable level, Maotai can slowly enjoy the dividend from it; if the bubble is suddenly blown into the sky and suddenly bursts, the fluctuations of the ups and downs will inevitably affect. The survival status of the dealer will also be transmitted to affect Maotai itself.
So we can see that in recent years, Maotai has been continuously controlling the shipments to a single dealer, weakening the concentration of dealers, to prevent excessive inventory in the hands of dealers. At the same time, Maotai is gradually increasing the proportion of direct sales, reducing the number of dealers, and essentially also to better control the speed of bubble expansion. After the 13-year bubble burst, Maotai was in the best position, which was not unrelated to the strict control of dealer channels.
Today’s Moutai price once again rushed to a 12-year high, and we can see that the recent fall in prices has actually brought about greater fluctuations in market sentiment. How does Maotai handle the terminal price so that it is not heavy?The mistakes of the 12 years, this is a problem worth looking forward to.