Huazhi Liquor Store introduces a new preferred selection model, aiming to become the "Sam's Club" of the liquor industry | 21 View Spring Sugar Fair

21st Century Business Herald reporter Xiao Xia, Chengdu report

Seeing Sam’s and Pangdonglai’s private-label liquor brands selling well, China’s leading chain liquor merchants are also thinking: Why don’t we do it? Why don’t we do it even better?

On March 23, on the eve of the Chengdu Spring Candy Fair, Huazhi Liquor Store held a Huazhi Selected Supply Chain and Chain System Strategic Launch Conference in Chengdu, announcing the launch of four new products under the “Huazhi Selected” private brand.

A reporter from 21st Century Business Herald learned on site that the four “Huazhi Selected” baijiu products are produced by Jiangsu Jingshiyuan, Henan Baofeng Liquor Industry, Moutai Town Hanwang Liquor Industry, and Sichuan Yourenfang Liquor Industry, covering four major aroma types: strong aroma, light aroma, sauce aroma, and mixed aroma.

This is the first time Huazhi Liquor Store has launched new products under the “Huazhi Selected” private brand, following its layout of “Huazhi Selected” as a new store format last year.

Huazhi Liquor Store’s president Yang Wuyong told a reporter from 21st Century Business Herald that from August of last year to now, “Huazhi Selected” has opened more than 200 stores nationwide, mainly in places such as Hunan, Guangdong, and Jiangsu. And this time, the first batch of Huazhi Selected baijiu products will be sold in all store types across Huazhi Liquor Store nationwide.

( Huazhi Selected President Yang Wuyong )

Huazhi Liquor Store is the first liquor chain brand to successfully list on the A-share market. Its annual revenue previously reached a scale of one hundred billion. Currently, its more than 2,000 chain stores are mainly divided into three categories: iteration to version 3.0 is the group-buy type of store—highest investment, largest single-store scale—focused on first-tier high-end brands such as “Mao Wu,” etc. These stores generally combine with other formats such as catering and cultural/entertainment, representing a high brand positioning. Huazhi Famous Liquor Vault is a retail-type store, the next largest in scale, actively expanding in second- and third-tier markets and covering a wider geographic range.

As for Huazhi Selected, launched last year, the goal is to meet consumers’ demand for high-quality liquor delivered immediately by improving store density and strengthening supply chain development, while aligning with the trend of retail-type stores. Yang Wuyong views it as a strategic format that carries Huazhi Liquor Store’s new development direction in the next stage.

Huazhi launches its own brand “Prices are only half for the same quality”

“Previously, Huazhi Liquor Store was driven by product brands and production factors (such as channels, teams, resources). Now, we’ve entered a new stage driven by model innovation.” Yang Wuyong said.

When it debuted in Chengdu this time, Yang Wuyong hoped to make the industry recognize that “Huazhi Selected” is not just a new store format; behind it is a whole system supported by “selected products + supply chain building.”

“We’re not developing a product for the store. What we want is to provide consumers with a professional standard system for choosing liquor, improving the consumption experience.” Yang Wuyong emphasized.

To prove the quality and market acceptance of the four Huazhi Selected baijiu products above, Huazhi Liquor Store invited eight senior liquor industry experts such as Ma Yong and Gao Jingyan to participate in product selection and review, and also recruited 10,000 consumers and store partners across Huazhi Liquor Store stores for blind tasting evaluations. Ultimately, from more than 40 sample liquors, the first batch of 4 products was selected.

“In fact, we want to learn Sam’s logic. Sam’s liquor is a model of strict product selection.” Yang Wuyong told a reporter from 21st Century Business Herald. “We place even more emphasis on high cost performance, and help consumers筛选 products with the right price and standout quality through Huazhi.”

A reporter from 21st Century Business Herald learned that the four Huazhi Selected baijiu products will each cover the 100–300 yuan price range. The numbers 200, 400, and 600 in the product names indicate products whose quality can be matched with the products at that price point.

An insider from Huazhi Liquor Store said, “Our products can achieve the same quality, but the price is only about half.”

In the past one to two or three years, supermarkets such as Pangdonglai, Hema, Yonghui, and Ollo have already cooperated with liquor companies to launch private-label baijiu. In particular, Pangdonglai’s collaboration with Baofeng Liquor Industry on the “Freedom Love” baijiu has already become a 100-million-yuan-level single product, proving that high cost-performance baijiu still has a fairly large market.

In the view of industry observers, private-label baijiu products from well-known channels basically replace small and mid-tier “miscellaneous” brands from major producing regions and mainstream aroma types. Judging by the industry scale, this segment still has a volume of another two to three hundred billion yuan.

But compared with the buzz created by supermarkets rolling out low-priced baijiu under 100 yuan and even as low as 9.9 yuan, Huazhi Liquor Store emphasizes that its own-liquor product selection will focus on mid-to-high-end; it values the products’ sustained profitability more than the traffic effect.

The first batch of product selection is only the first step. In the future, Huazhi Selected will also co-brand with more famous liquors to expand coverage of baijiu categories. In addition, it will cover other liquor categories such as craft beer, wine, rice wine (huangjiu), and sparkling alcohol-free drinks.

“We expect Huazhi Selected’s liquor SKU to be within 100, not too many. We still need to ensure consistency in the mid-to-high-end positioning. Compared with product quantity, I’ll care more about order quality and customer quality.” Yang Wuyong told a reporter from 21st Century Business Herald.

This year, recruit 100 regional operators 配送 fastest in 15 minutes

In addition to emphasizing the product selection capabilities of private-label products, Huazhi Selected’s new model places even more emphasis on supply chain development.

At this launch conference, Huazhi Liquor Store announced it will further recruit “Huazhi Selected” regional operators nationwide. Working with Huazhi Liquor Store, they will develop stores together and build regional supply chains together. By improving store density and warehousing capacity, they will guarantee delivery services.

A reporter from 21st Century Business Herald learned that Huazhi Selected’s requirements for regional operators mainly involve three aspects:

First, they must have reputation and influence locally, and work with Huazhi to develop and operate stores, increasing Huazhi Selected’s store density in the region. Second, they must be able to obtain sources of national famous liquors, local famous liquors, and locally best-selling products. Huazhi may not necessarily require regional operators to have agency rights for corresponding brands, but operators must have supply sources with a price that’s appropriate yet genuine. Third, they must have warehousing capacity. Only by delivering to stores in a timely manner from the warehouse every day can delivery timeliness for stores be guaranteed.

Yang Wuyong told a reporter from 21st Century Business Herald that currently, Huazhi Selected has already recruited more than 20 regional operators. This year, it hopes to recruit 100. Each regional operator will cooperate with Huazhi Liquor Store to develop 20 to 30 stores, thereby expanding the store scale of Huazhi Selected and improving network density.

Some customers from other industries have already switched to this business.

A distributor from Inner Mongolia told a reporter from 21st Century Business Herald that he previously worked in the mining industry. Starting last year, he began cooperating with Huazhi. From late last year to now, he has opened more than a dozen Huazhi Selected stores in Ordos.

Compared with Sam’s “available within hours” and Meituan Waimai’s “within half an hour,” Huazhi Selected hopes to satisfy young consumers’ demand for immediate liquor purchases even faster. After store density reaches the required level, the fastest delivery from store to consumer can be within 15 minutes. However, Huazhi also added that 15 minutes is the most ideal delivery time achievable only after store density is raised to a sufficient level.

In Yang Wuyong’s view, this model for Huazhi Selected is suitable in terms of capital scale for many small and medium-sized distributors and tobacconists, meaning the market space is very large. As he said, with a capital base of several hundred thousand yuan, they can start.

“There are a few million tobacconist shops in China. In the future, the industry will face K-shaped differentiation. Some tobacconists will do well by adapting to changes in consumer demand, while those who can’t keep up may face closure. It’s expected that one-third of tobacconists will have to transform in the future, and they all need to embrace new formats.” Yang Wuyong said.

For Huazhi Liquor Store, whose performance is affected by market conditions, new formats and new models are also a key plan for further development after shedding burdens and stabilizing cash flow.

“This is actually a new model forced out by current market conditions.” Yang Wuyong told a reporter from 21st Century Business Herald, “If everyone just competes by cutting prices, that’s a form of low-quality competition. We still need to create incremental value with good products and services, so that everyone can build a high-quality operating model and keep making money in a sustained and long-term way.”