The blame for Moutai's decline cannot be placed on Xunfeng.

Zebra Consumer Yang Wei

Investors in Moutai liquor and Kweichow Moutai (600519.SH) stock have endured several tough days.

Since last Tuesday, Moutai's stock price has been declining continuously. Yesterday, it opened with a significant drop but stabilized by the close after a late rally. Over six trading days, the cumulative drop exceeded 4%, wiping out 92.1 billion yuan in market value.

As the king of A-shares and a super heavyweight stock with a market cap exceeding 2 trillion yuan, this slow, painful decline is something we haven’t seen in a long time.

Some Kweichow Moutai investors must be puzzled. After all, the company recently disclosed stellar performance figures.

In 2023, the liquor giant reported revenue of 147.694 billion yuan and net profit attributable to shareholders of 74.734 billion yuan, up 19.01% and 19.16% year-on-year, respectively, maintaining its lead in the baijiu industry.

Nationwide, large-scale baijiu producers achieved sales revenue of 756.3 billion yuan in 2023, up 9.7%, with total profits of 232.8 billion yuan, a 7.5% increase.

As the core premium product in China's high-end baijiu market, Moutai liquor, despite limited production capacity, still saw revenue growth of 17.39%. It remains the world's only liquor product with over 100 billion yuan in revenue, solidifying its dominance.

Moutai’s series liquors, a key growth driver in recent years, also performed impressively. Moutai Prince liquor surpassed 4 billion yuan in revenue, while Han Sauce, Kweichow Daqu, and Lai Mao each exceeded 1 billion yuan. The series liquors segment generated 20.63 billion yuan in revenue, up nearly 30%.

The pressure in the secondary market mainly stems from the recent drop in Moutai liquor’s wholesale prices.

In recent years, Moutai’s wholesale prices have been relatively stable, with current batches and loose bottles trading around 2,700 yuan. However, recent data shows prices have been falling since April 6, dropping to 2,505 yuan by April 10—a 130 yuan per bottle decline in just five days.

A liquor recycler told the media, "This is a crash, not just due to the off-season."

Yesterday, Moutai’s price rebounded slightly to 2,530 yuan, which may explain the stock’s stabilization. But the future price trend remains uncertain.

Moutai insiders, industry experts, and the media have all pointed to Xunfeng Moutai 375 as the trigger for the dual decline in liquor and stock prices.

Launched in early 2023, Xunfeng Digital World is an e-commerce platform co-founded by Moutai Cultural Tourism Holdings (a subsidiary of Moutai Group) and NetEase Youpin (under NetEase Group), centered on "digital collectibles."

In recent years, Kweichow Moutai has aggressively promoted its direct sales channels to strengthen control over distribution. The success of i Moutai significantly boosted profitability.

Moutai’s foray into digitalization initially seemed like a brand-enhancing move—until the launch of Xunfeng Moutai.

On December 31, 2023, at Kweichow Moutai’s 2024 Global Moutai Fans Carnival, Xunfeng Moutai was unveiled. Marketed as a "heaven-earth co-creation" digital-physical hybrid, this strategic product is exclusively sold on Xunfeng Digital World.

According to the Xunfeng app, the 53-degree 375ml Xunfeng Moutai is priced at 1,498 yuan, equivalent to roughly 2,000 yuan per 500ml. Reports suggest 200,000 bottles were released in this round.

When Xunfeng Moutai 375 became available for in-store pickup recently, Moutai’s wholesale prices began to slide.

While Xunfeng Moutai 375 ignited the price volatility, the underlying issue is Moutai’s 畸形的价格体系。

Moutai’s official retail price is 1,499 yuan, but wholesale prices have hovered around 2,700 yuan in recent years. Original cases and older batches command even higher prices, often exceeding 3,000 yuan during peak seasons when demand outstrips supply.

This isn’t normal, but everyone has grown accustomed to it.

The massive gap between factory, wholesale, and retail prices creates arbitrage opportunities. Coupled with production constraints and price hike expectations, this has cemented Moutai’s status as an investment asset—leading to low consumption rates, a persistent pain point for management.

Kweichow Moutai’s recent focus has been on reducing reliance on distributors and expanding direct sales. While this boosts profitability, it hasn’t effectively stabilized prices.

Last year, inventory and price inversion crises plagued the baijiu industry. While Moutai avoided it, other premium brands weren’t as lucky.

Over the long term, even gold prices fluctuate—so why should Moutai’s remain unshaken?

This year, despite industry efforts, the vicious cycle of inventory gluts and price inversions persists. Now, the pressure has finally reached Moutai.

Previously, only seasoned investors like Lin Yuan and Dan Bin felt the sting of Moutai’s price swings. With bottles costing over 3,000 yuan and a single share priced above 100,000 yuan, ordinary folks were largely unaffected.

But a drop in Moutai’s prices and stock could topple the 白酒行业价格信仰的多米诺骨牌。

If Moutai falls, will Wuliangye (000858.SZ) hold? Just this February, Wuliangye raised the factory price of its flagship product. Can Yanghe, Fenjiu，国窖 1573, and other second-tier premium brands maintain their pricing?

Amid Kweichow Moutai’s slump, the entire baijiu sector has suffered, with few exceptions.