On November 4th, Feitian Maotai saw its price per bottle drop to 1499 Chinese yuan on some mainland e-commerce platforms, and at the same time, its wholesale price has been continuously declining. Some analysts believe that Maotai may continue to see further declines in the future.
On November 4th, the 53% ABV 500ml Feitian Maotai was priced at 1499 yuan per bottle on e-commerce platforms such as Pinduoduo and Taobao in mainland China. On Pinduoduo, three consumers need to place orders together, while on Taobao, there are limited-time purchases with subsidies on the hour. This comes after the price of Maotai dropped to 1550 yuan per bottle on some e-commerce platforms on November 1st.
Meanwhile, the wholesale price of Maotai liquor has also been on a downward trend. Data from the liquor market monitoring platform “Today’s Liquor Price” on November 4th showed that the per-bottle bulk price of 53% ABV 500ml Feitian Maotai is 1670 yuan, and the retail bottle price is 1640 yuan. Although the retail bottle price has increased by 20 yuan compared to November 1st (1620 yuan per bottle), it still remains at a low level.
Wall Street News reported on November 4th that based on the latest wholesale reference price from Today’s Liquor Price (1670 yuan per bottle for bulk Feitian Maotai and 1640 yuan per bottle for retail Feitian), there has been a decrease of 120 yuan and 130 yuan respectively compared to a month ago. This indicates that Maotai’s wholesale prices are still hovering at low levels and continuously probing the bottom.
Due to Guizhou Maotai’s implementation of a distribution system for distributors, distributors not only need to purchase Feitian Maotai, but also have to buy a certain proportion of other products at an additional cost. When these related procurement costs are factored in, the industry generally believes that the breakeven point for Maotai distributors is around 1800 yuan per bottle. The current wholesale prices have already significantly undercut this breakeven point, highlighting channel profit pressures.
The main reason for the continuous decline in Maotai liquor prices is believed by the industry to fundamentally stem from various factors leading to insufficient market demand: economic downturn leading to reduced consumption, lack of interest in Baijiu among young people, decreased purchasing power among the elderly post-retirement, and so on.
Regarding the future direction of Maotai liquor prices, Wall Street News is not optimistic. This is because Maotai liquor has accumulated a huge and difficult to estimate social inventory due to its highlighted financial attributes in the past. A considerable portion of this inventory is not concentrated within controllable distribution systems but dispersed among a wider range of market investors.
In a research report by UBS in July 2024, it was estimated that between 2016 and 2023, around 14-15 months’ worth of Maotai liquor sold had been hoarded as social inventory, with an average holding cost of around 2079 yuan per bottle. Once the consensus of “continuously appreciating scarcity” is broken, the uncertainty of the entire price system will sharply rise. For Maotai, the balance between volume, price, and performance has gradually become an “impossible triangle”. It will take some time for Maotai to balance these relationships, promote inventory resolution, transition through cycles, and confirm new growth paths.