Liquor is still a huge market in China

While the fast-growing red wine has attracted more attention, baijiu is still a huge market in China, accounting for nearly 70% of all alcohol sales.

The past decade has been a decade of gold in the white wine industry, which, of course, is the result of the Government's contribution – a bit of a bubble, and the liquor companies that have not yet prepared after the three-public consumption have plunged into the cold. 2013, Liquor became the worst performance of the stock plate, a shares of the first 10 major declines, liquor stocks accounted for 4.

For liquor-oriented E-commerce website Jiuxian network, all this is a huge opportunity.

April 2, 2014, the Jiuxian network announced that a total of 425 million yuan investment in the news, respectively, at the end of 2013, 165 million yuan in the D-round financing and March 2014 of the 260 million yuan in the e-round financing. For the investment side of the Jiuxian net, liquor is one of the few industries that can support the survival of an independent electric trader, and there is not much direct competition between the big platforms such as Jingdong.

Of course, Jiuxian's own rapid growth is also the reason investors are willing to continue to increase. 2013 Year Double 11 Jiuxian net completes the sales 220 million yuan. Shang not willing to disclose 2013 years of sales, 2012 Jiuxian net sales of more than 1.5 billion yuan. The better growth rate is precisely the main reason why Shang started doing business in 2009, and he wants to do the scale of the company by electronic commerce.

Do Jiuxian nets before, Shang's best liquor company is Shanxi's largest liquor agency company, in 2008, in the traditional liquor industry to do more than 10 years agent of the wine industry annual sales of more than 1 billion yuan. Like most electric dealers, Shang want to do is from the wine enterprises direct procurement, direct sales to consumers, reduce the distribution of liquor sales costs, to ensure quality, at the same time to expand the market price advantage. Generally speaking, the Jiuxian net price is relative to the physical store, the liquor can be low 20%. "The traditional liquor channel is the agent layer fare increase, at least 20% increase in each level."

The existence of this model is premised on the support of upstream liquor companies to obtain the lowest ex-factory price. Shang's experience as a traditional wine industry has provided the initial resources for the Jiuxian network. However, the traditional agents can cover a limited category, Jiuxian network needs to find more upstream resources, especially Maotai and Wuliangye such a big brand. But at that time Maotai, Wuliangye and other major brands are almost seller's market, the traditional channels of the highest level of agents are often exclusive, docking wine enterprises will interfere with the purchase of other channels of profit.

Shang chooses to expand the opportunity from the regional liquor brand. China liquor market is huge, almost every region has been recognized to reach a certain size of the brand. Currently registered Liquor Winery has more than 10,000, and the product category is more than 100,000. Jiuxian Network formed a procurement team of more than 100 people, is responsible for looking for regional brands across the country liquor.

In order to attract traditional liquor enterprises to join the field of electrical business, in 2011, Jiuxian Network launched a set of E-commerce integrated marketing program, that is, to create a team for customers, tailored personalized services to different customers to help wine enterprises to implement a full set of E-commerce solutions, including product packaging, pricing, taste, operational strategy, To complete the nationwide promotion and market-oriented construction.

For big national brands, this is not a very attractive service, but there is still a big demand for regional brands-due to the size, capital and other reasons, according to the traditional liquor sales model to sell wine to the country, the cost of selling too high. 2012, Jiuxian Network and song Grain Liquid Cooperation, launched a channel for the Electric Power song Grain liquor home rhyme buckle buckle. In this product planning case, the Jiuxian network positioning it as a youth-oriented fashion wine, can be paired with milk, juice, etc., can be as arbitrary as the foreign wine, and in the outer layer using a unique recyclable plastic packaging.

The wine sold more than 1 million bottles 3 months after it was listed. "Traditional marketing channels are unlikely to reach this figure in such a short period of time. Zhang Yong said, under the traditional channels, agents to retail terminals need several months, the promotion will also take several months. Zhang Yong is the wine sommelier of the Jiuxian network, and is also responsible for the training of procurement personnel.

2012, the Jiuxian net sale liquor category from 2011 500, rapidly increased to more than 1000. While seeking upstream partners, Shang found another opportunity to expand rapidly--the liquor channel of the contractor's platform electric dealer.

The particularity of the liquor made suning easy to buy, 1th stores such a platform is not willing to invest too much resources to develop the business, and is willing to outsource the business. As wine products have access to the threshold, the platform can not easily get the power of liquor companies to the first level of proxy. and wine products from procurement to warehousing, logistics have special requirements.

Liquor as a fragile commodity, logistics and distribution requirements are very high, in addition to logistics delivery time must be efficient, crushing rate must be effectively controlled. According to Jiuxian Network introduced, the initial breakage rate can reach 10%, at present, to 1%. The cost of transporting a bottle of wine from Beijing to Guangzhou is about 16 yuan, and the cost of distributing it from the Guangzhou Storage Center can be reduced to about 5 yuan.

Buy back the kind of wine in addition to have all kinds of qualification certificate, but also through the tasting of the tasters. "Know how to discriminate before you sell." Zhang Yong said. Jiuxian Network Procurement Department more than 90% of employees have experienced professional sommelier training, the company specifically invited to the industry's renowned sommelier to the procurement team to attend class.

April 2012, Jiuxian Network began to operate exclusively as a wine channel. And when the cooperation, when CEO Guoqing worried about the appearance of fake wine reputation, so wine channel to Jiuxian Network exclusive operation. Since then, Jiuxian Network has been settled into the major electric platform, including shop No. 1th, Gome's Bowser network, Tencent's QQ online shopping, Suning easy to buy and new eggs.

The platform electric dealer has brought the huge flow to the Jiuxian net. "Overall sales, the Jiuxian website sold 60%, the other platform 40%." Shang said the Jiuxian network and these platform electric dealers are in the form of cooperation.

This also means that the Jiuxian network must be in the platform to not be willing to invest too much wine warehousing logistics to invest more, and this requires more money. August 2002, Jiuxian Network announced that the capital and other funds, such as the C-round financing, the previous rounds of financing accumulated more than 600 million yuan, the main purpose is to solve the problem of warehousing and logistics transport. "To do one thing with all the money, is to buy more wine back." "Shang said.

Although the input of logistics has once led to the loss of Jiuxian network, but also let the Jiuxian network retained as a professional wine electronics business advantages. Jiuxian Network in Beijing, Shanghai, Guangzhou and other regions to set up six operations centers, product distribution can cover nearly 2000 cities and counties in the country, has been in 41 core cities to achieve the next day, in more than 200 key cities to achieve the 3rd arrival.

This is one of the most important capabilities of the platform electric operators. In the cooperation with when and other electric business, logistics warehousing and other after-sales service by the Jiuxian Network is responsible for the completion. Even since the construction of the logistics of the Jingdong, its commitment to the logistics part is also very few, "occasionally will use the Jingdong logistics, but the goods will not be warehousing, after all, there is no such a large warehouse to store drinks." "Shang said.

2013, limited "three public consumption" to Jiuxian founder Shang brought an excellent opportunity-and maotai such a big brand cooperation. Prior to this, Jiuxian network such independent liquor dealers are difficult to obtain with the big brand liquor manufacturers direct cooperation opportunities.

"Before 2013, most of us go to the winery, limit the ' three public consumption ' after the upside down, a lot of winery owners began to our company to discuss cooperation." "Shang said.

The Jiuxian network took full advantage of this opportunity. This year, Jiuxian network successively with Maotai and Wuliangye signed strategic cooperation Agreement, Jiuxian Network Comprehensive agent Maotai's product line, including Han sauce, ren wine, flying, vintage wine, including Maotai group's full range of products.

Maotai and Wuliangye accounted for only 10% of Jiuxian net sales. But having such a quality supplier will enable more brands to accept the Jiuxian network. Maotai and Jiuxian Network cooperation, Niulanshan, song, Jing Zhi, Confucian home, such as a number of liquor enterprises have chosen Jiuxian Network on behalf of the operation of the flagship store on the east. This year, Jiuxian Network and Beijing-east to reach strategic cooperation, and with Jiuxian Network on behalf of the operation of more than 100 wine enterprises into the Beijing-east platform.

But for the Jiuxian network, this is still a rapidly changing market. After a year of cooperation, when the Jiuxian network was relieved of the exclusive operation. In addition to when, 1th stores, Gome Bowser, etc. have also introduced other businesses, Jiuxian Network and Platform business exclusive cooperation ratio has been greatly reduced. And the platform of electricity in the self-employed liquor category of more and more investment, jingdong more than 1600 kinds of self-liquor, 1th shop self-liquor more than 610 kinds.

This makes the Jiuxian network have to change, Shang's strategy is to continue to expand the warehousing logistics and the amount of alcohol investment. 2013, Jiuxian net increased the category outside the liquor, currently 60% of the category is white wine, 25% or so is red wines. Jiuxian network now has more than 5,100 wine varieties, Shang said the end of the total can be increased to about 10,000.

Shang said the latest financing will be mainly used for the National Warehousing Center and the "wine fast" layout. At the end of this year, Jiuxian network in the country will have seven operations Warehousing center, the total area will reach about 120,000 square meters.

On the day before the announcement of the financing news, the mobile client of Jiuxian net "wine is coming" officially on-line. The purpose of this service is to use lbs positioning, to help users find a nearby 5 km range of liquor retail outlets, their own choice of shops and merchandise, call shop phone, you can enjoy the fast door-to-door service. Shang said "wine is coming" now with more than 100 wine companies and wine business to discuss the cooperation, the plan at the end of 2014, in the national large and medium-sized cities have cooperative shops, the final realization of more than 2000 counties and cities throughout the network layout, to achieve the goal of 9 minutes delivery.

Shang's logic is, "the wine industry is entering a difficult transition period, the store will be in the next few years big collapse." "This is obviously another very important change in the industry," wine fast to "may be able to add a lot of convenience to consumers, but the Jiuxian network must first consider how to solve the profit of the store-the network is the price of transparency so that the store lost the space to survive.