Wuliangye banks on overseas markets for sustained growth

Wuliangye Group Co Ltd's booth at a liquor expo in Wuhan, Hubei province. CHINA DAILY

Liquor maker Wuliangye Yibin Co Ltd is planning to expand its global presence by selling and promoting more Chinese white spirits in major overseas markets, according to Peng Zhifu, deputy general manager of the Shenzhen-listed company.

Peng outlined the company's 'going global' strategy during the 18th China International Fair for Investment & Trade being held in Xiamen, Fujian province.

Wuliangye, which literally means "Five Grains Liquid", has been widely renowned in China, but the company is not satisfied with being "just a national leader", said Peng.

"Wuliangye has been researching and developing liquors that fit into local cultures, and we have done a lot of work to develop products that are suitable for overseas palates," he said.

Wuliangye is already popular as a foreign liquor brand in south and east Asian countries like Singapore and South Korea. In North America and Australia, the brand and its products are fast gaining recognition with local consumers.

Chinese white liquor, or baijiu, has for long been considered an integral part of the nation's culinary culture. Jingjiu, or toasting with a glass of liquor, is considered a part of family etiquette.

Collective efforts from the entire industry are, however, needed to help popularize baijiu and other Chinese white spirits in overseas markets, said Peng.

"In many countries, whiskies and wines are consumed for various occasions ranging from formal business talks in office to relaxation and in night clubs. Baijiu, however, is mostly consumed on dining tables. Our research and development teams have been working on making baijiu more versatile and suited for purposes other than dining, without any major changes to its intrinsic features," said Peng.

In Beijing, a Chinese liquor bar called Capital Spirits run by three foreigners has opened recently and proved to be quite popular with the younger crowd, he said.

Peng said the widely believed notion that only middle-aged consumers like baijiu might not be right, as the company is working on more varieties for young consumers so that they may try something different.

"Wuliangye won't passively wait for consumers to grow older and start drinking. We have developed some products with less alcohol strength, and they have been welcomed by young consumers," said Peng.

The white spirits industry in China has been going through turmoil recently due to dwindling consumption and austerity measures, with some companies posting severe drop in profits this year. Wuliangye's net profit during the first six months of the year was 4 billion yuan ($649 million), down 31 percent year-on-year, according to the company's interim report released last month.

"The Baijiu sector has been experiencing adjustments and changes after high-speed development during the past few years. In the long term, such changes will benefit the sector's growth. I believe that when the sector has adjusted to its best position, Wuliangye will also be ready for its next stage of development," said Peng.

The company has also been expanding its e-commerce channels as well as optimizing its traditional brick-and-mortar sales channels and distribution systems, said Peng.