China’s premium baijiu (white spirits) maker Moutai is looking to make its brand famous beyond the borders of China.
As part of its expansion strategy to solidify its European business, Moutai said it will invest 8.79 million euros ($11.76 million) to buy real estate in Paris, reports Global Times.
Currently, Moutai’s market outside of mainland China is very small. Overseas sales account for 2.7 percent of sales or 382 million yuan ($62.72 million) in the first half of 2013.
Most of Moutai’s overseas customers are Chinese. The company has been unsuccessful in attracting non-Chinese customers because of the liquor’s unique taste and strength. Moutai baiju is much stronger than vodka, the familiar and popular Western liquor. “Each 100 milliliters (ml) of vodka contains about 40 ml alcohol, but each 100 ml of Moutai baijiu includes about 50 ml alcohol,” said Yang Qingshan, executive president of the China Brand Strategy Association.
A cooling domestic market is causing premium baiju makers to explore overseas opportunities. Chinanews.com reported that “the total revenue of 13 listed Chinese baijiu enterprises in the first three quarters dropped 3.17 percent year-on-year, and the total net profit decreased 6.33 percent year-on-year and the first time the industry has experienced falling profits in nine years.”
While Moutai’s main business is still baiju, it has begun to diversify its business by developing a wine brand, Moutai Wine, through a joint venture that was set up in 2012. Moutai bought French wineries, Chateau Dallau in 2012 and Chateau Loudenne this past May.