Summary of Key Points
In recent years, in an effort to “rejuvenate its brand,” Moutai has collaborated with fast-moving consumer brands such as Mengniu, Luckin Coffee, and Dove on various products (e.g., Moutai ice cream and soy-flavored lattes). Although these collaborations were initially very popular, they ultimately did not enhance the brand’s image but instead damaged Moutai’s premium status and long-term brand assets. As a result, Moutai has taken a more cautious approach, discontinuing such partnerships, and established a new framework for brand decision-making with the release of the “Moutai Nine Chapters.” This framework emphasizes the protection of brand assets and the reinforcement of the brand’s core identity. This shift not only returns Moutai to its essence as a premium brand but also sets an example for Chinese brands to focus on long-term value rather than blindly chasing short-term popularity.
Detailed Analysis
1. Moutai’s Attempt to Appeal to Youngers
A few years ago, under the leadership of its former chairman, Moutai decided to “rejuvenate” its brand by engaging with younger consumers:
- In 2022, it collaborated with Mengniu to produce Moutai ice cream (sold for 60 yuan per piece, positioned as “the first taste of Moutai for young people”).
- In 2023, it partnered with Luckin Coffee to create soy-flavored lattes, which generated over 100 million in sales in a single day and became a sensation online.
- It also collaborated with Dove on chocolate products and continued its partnership with Luckin Coffee to release Dragon Year-themed soy-flavored chocolates.
However, these efforts were not sustainable. The popularity of the Dragon Year chocolates was only one-tenth that of the lattes, and market response was lukewarm. Subsequently, Moutai closed many of its ice cream stores and stopped disclosing the revenue from these collaborations. It took just three years for the initial success to fade.
2. The Problems with Collaborations
The article identifies two key reasons for the failure of these collaborations:
Issue 1: Mismatch in Brand Potential
Moutai is a premium liquor with financial and collectible value, while brands like Luckin Coffee and ice cream are part of the fast-moving consumer goods sector, known for their low margins. Collaborating with them meant using Moutai’s reputation to sell their products, but these partners did not prioritize Moutai’s long-term value. For example, Luckin Coffee might have discounted Moutai products to boost sales, making it seem less premium to the public.
Issue 2: Lack of Compatibility between Products and Usage Scenarios
Moutai is associated with formal events and collectibles, whereas fast-moving consumer goods are typically consumed for afternoon tea or as everyday snacks. These collaborations created a disconnect between Moutai’s image and its intended use, which led to consumer fatigue over time and blurred the brand’s core identity.
3. The Importance of Knowing What Not to Do
Moutai’s decision to stop these collaborations was based on the realization that its most valuable asset is its brand equity, which accounts for more than 85% of its total market value. According to brand experts, the previous collaborations had both positive and negative effects:
- Positive: They increased Moutai’s visibility among younger consumers.
- Negative: They weakened the brand’s premium image, reduced consumer perception of its quality, and decreased loyalty among its core customer base.
Premium brands must avoid three pitfalls: cross-category collaborations without synergy, long-term partnerships with low-profile partners, and using short-term popularity to overshadow their long-term uniqueness. Moutai had fallen into all these traps, so it was necessary to stop promptly—just as investor Duan Yongping advises: “Stop immediately when you realize you’re wrong; the cost of mistakes is lower.”
4. Moutai’s New Brand Framework: The “Moutai Nine Chapters”
The release of the “Moutai Nine Chapters” marks a significant shift in Moutai’s approach. This document is not just a corporate culture guide but a set of brand guidelines that dictate all decisions:
- Any new initiative must align with Moutai’s core identity, reinforce its brand image, and contribute to building its assets.
- Initiatives that do not meet these criteria should be avoided, even if they are not profitable in the short term.
Moutai’s new strategy includes launching smaller, lower-alcohol versions of its products to make them more accessible to younger consumers and establishing cultural experience centers to showcase its brewing heritage. These efforts rely on Moutai’s own culture and brand assets rather than external traffic, thus appealing to younger consumers without compromising its premium status.
5. The Implication for Chinese Brands
Moutai’s transformation serves as a reminder to all Chinese brands:
- Popularity is easy to achieve, but brand assets are difficult to restore once damaged.
- Brands are built on the long-term accumulation of core value, not on short-term collaborations.
- Chinese brands are beginning to move from a frenzied pursuit of trends towards more mature and stable development. This shift provides a benchmark for smaller brands, which can now focus on building sustainable foundations rather than merely seeking short-term attention.
In summary, Moutai’s transformation represents the beginning of a new era of brand management in China, where brands place greater emphasis on long-term value and brand protection rather than fleeting popularity.