Kweichow Moutai was founded in 1999. It is a semi-state group with a diverse production portfolio. However, the main product is beverages, especially spirits, and among them also one nicknamed “razor blade”.
Three years ago, in terms of market capitalization, Kweichow Moutai outgrew the then leader of the alcohol market, the British group Diageo. Last year, the premier in the non-alcoholic segment, the American Coca-Cola, also jumped.
Shares of Kweichow Moutai traded on the Shanghai Stock Exchange rose 70 percent last year. The company has thus become one of the most valuable Chinese companies. Only technology giants Tencent and Alibaba have a larger market capitalization. And in this statistic with a capitalization of over $ 400 billion, Kweichow boasts of skipping globally known iconic brands such as Toyota, Nike and Disney.
Kweichow Moutai products have become fashionable. “Whenever its products are available on the market, there is a huge demand for them,” he comments for CNN Kweichow Moutai phenomenon Ben Cavender, an analyst at China Market Research Group.
With the consecration of the bosses
In particular, the drink with the English name Moutai Flying Fairy (flying fairy) – very spicy (53% alcohol), of the Pajtiou type (clear brandy from grain or rice similar to a European leader) – is considered a Chinese national liqueur. It was popularized as a drink of diplomats, and was also popularized by the founder of today’s Chinese Communist Party, Mao Zedong.
But the Moutai legacy goes even further, with Chinese soldiers supposed to disinfect themselves with this drink during the earlier wars in the early 20th century. The name is then derived from the town of Maotai in southwest China, where it was also to help fight disease.
Excursion into the history of Moutai
So far, it is a purely Chinese thing, the domestic market consumes 97 percent of production. The first attempts to get the brand further into the world were there – including, for example, the sponsorship of the Italian football club Inter Milan – but further expansionary ambitions were slowed down by the COVID-19 pandemic.
Bottle as an investment
Even so, the company has recently become number one in its field in the world and continues to strengthen. With the expansionary policies of the world’s central banks and thanks to investors’ efforts to find interesting alternative real assets, the fashion of investment in Moutai has also emerged. Some bottles from various limited editions have recently been offered at world auction halls at prices in the tens of thousands of dollars, as is the case with bottles of Scotch whiskey.
“People have stopped traveling, they are investing in drinking,” Cavender notes, adding that this is, of course, more of a wealth of China’s population. It also targets marketing, including the covid appeal and the “Stay home with Moutai“.
Will Moutai ever be a global standard such as the aforementioned Scotch whiskey, Greek ouzo, French champagne or Caribbean rum? Who knows. But it is set in motion.
After all, the market capitalization of Coca-Cola is about $ 210 billion as of the date of this text, January 19, 2021. It represents about half the size of the Kweichow Moutai. And Diageo? $ 91 billion.
Source: E15.cz by www.e15.cz.
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