Last month, Jing Daily reported on the new "global push" announced by the premium Chinese spirits (baijiu) maker Moutai (茅台). Although Moutai remains arguably China's most popular high-end native tipple (prices typically range anywhere from the hundreds to the thousands of dollars per bottle), it has yet to catch on outside of Chinatown restaurants overseas, and even then -- unlike its Japanese cousin sake -- it's rarely consumed by non-Chinese drinkers. As part of its global push, Moutai plans a five-country marketing onslaught for France, Japan, the United States, Canada and Russia, and if this is successful in increasing international sales, it will be widened to further markets like Australia and Singapore.
So why is Moutai planning to push so aggressively into untested markets, primarily populated by people who have largely never heard of or tried baijiu before, or if they have, might not have enjoyed the experience? Rather than being a case of expansion for the sake of expansion -- and bragging rights -- it seems that Moutai is focused on the goal of establishing itself as one of China's preeminent home-grown luxury brands overseas, as it has at home.
This week, Moutai followed up its plans for global expansion by announcing a more inward-looking luxury product, the Moutai "Red Diamond" series. Targeting high-powered business execs and heads of state, according to this article (Chinese), Red Diamond is a completely new Moutai sub-brand, which iFeng notes is purported to "boost health," and "create the first Chinese old-world-style luxury brand." The kicker? As iFeng's journalist is reporting, the highest-priced 500 mL bottle of Red Diamond will retail for a not-so-modest 130,000 yuan (US$19,200).
As iFeng goes on to point out, part of that nearly $20,000 goes to pay for piece of mind. In recent years, stories of counterfeit alcohol have become commonplace, with some -- such as this one from the Changsha Evening News -- singling out Moutai as a prime target for counterfeiters. To reassure consumers that their pricey bottle of Red Diamond is the real deal, Moutai will "abandon traditional marketing channels" for this sub-brand, only selling directly to consumers through custom channels. Additionally, each bottle of Red Diamond will have a unique serial number, and will be packaged in special boxes that feature locks that buyers can open only after calling a dedicated hotline to retrieve the password. While this sounds more Mission Impossible than Cheers, according to Moutai it is necessary to ensure the product's authenticity -- something that China's high rollers are often more than willing to pay for, particularly in the wake of recent food and drink safety scandals.
While this story seems like another case of a Chinese company releasing an astronomically priced product for the sake of publicity, it is actually a pretty important area to keep an eye on. The rapidly rising prices of already-expensive Moutai, whether due to increased hoarding by collectors, increased demand from a growing middle class, or artificial price meddling on the part of Moutai itself, is a topic that's often covered in the Chinese-language media. (Here's an article from today about the subject.)