Wuliangye Out Performs Kweichow Moutai

Wuliangye Out Performs Kweichow MoutaiFor many alcohol enthusiasts, especially those based outside of China, Kweichow Moutai is the biggest name in baijiu. Thanks to government sponsorship, excellent branding and a stellar reputation, Kweichow Moutai Co. Ltd briefly became the largest business on the Chinese stock exchange earlier in 2020.

Despite this, rival distilleries are slowly and steadily making headway into a marketplace previously dominated by Moutai. Take Wuliangye Yibin Co. Ltd as an example. Based in the southwestern province of Sichuan, Wuliangye expanded their business operations in the first quarter of 2020.

The aim of this was to venture an initial financial hit with longer-term progress and profit. It appears that the gamble has paid off. The growth of Wuliangye Yibin Co. Ltd surpassed that of Kweichow Moutai Co. Ltd for the first half of the year.

The biggest impact was on net profits, as Wuliangye are already seeing a return on their investment. Profit has increased to the tune of CNY10.9 billion. That’s roughly £GBP 1.2billion. While this is a slower growth than during the same period in 2019 – 16%, as opposed to 33% – these remain hugely impressive financial results. When we consider that the world has changed irrevocably in 2020, the climb is even more noteworthy.

This is not to claim that Kweichow Moutai Co. Ltd are in any kind of financial trouble. This business saw a climb in net profit of their own, upping their ROI by some 13%. In addition, Moutai will always turn a profit thanks to its famously hefty price tag. All the same, it’s interesting that Wuliangye outperformed the baijiu that previously attempted to market itself as, “China’s National Liquor.”

Wuliangye is a highly reputable baijiu and a premium brand, but Moutai has always been considered the biggest dog in the yard. Perhaps this is a sign of things to come, and that Wuliangye will continue to push for the status of bestselling baijiu in China.

Profits are expected to soar further in the second half of the year, with numerous public holidays during the autumn. Share prices are also rising, albeit experiencing a level of fluctuation. This is a story to watch with interest; we’re fascinated to see how it plays out.