With its frequent collaborations, has Moutai captured the hearts of young people, or is it over-consuming the brand?

Recently, Moutai has been involved in more and more joint ventures, which makes people wonder about the significance of such joint ventures. Is this exposure valuable to Moutai? With its frequent joint ventures, has Moutai captured the hearts of young people, or is it an over-consumption of the brand? This article explores this issue, let's take a look.

There are more and more Moutai co-branded products.

Following its collaboration with Mengniu to launch Moutai ice cream and its collaboration with Luckin Coffee to launch sauce-flavored latte, Moutai announced its collaboration with Dove Chocolate to launch chocolate with liquor filling.

If most people were applauding the cooperation with Luckin Coffee, after the official announcement of the cooperation with Dove so quickly, many people began to worry: As a luxury brand, is it good to cooperate with fast-moving consumer goods so frequently? If this continues, where will Moutai's sense of high-end and dignity be?

However, in today's world where traffic is everything, all doubts have been dispelled by traffic. As soon as the products were preheated, Moutai and Dove were on several hot searches. After the official sale, the discussion was even more heated. Moutai's exposure naturally made other brands envious.

But is this exposure valuable to Moutai?

01 Exposure and traffic are of little significance to Moutai

There are only two goals of exposure and traffic: one is to increase brand awareness, and the other (the ultimate goal) is to promote sales.

Let’s talk about brand awareness first. For Moutai, it is hard to imagine that people over 20 years old don’t know the Moutai brand.

Those who know Moutai naturally know it, and those who don’t know Moutai will naturally know it when they are in their twenties or thirties. Most of them know Moutai not because of advertising or marketing, but because Moutai is the number one brand of Chinese liquor. It relies on word of mouth to spread among people to expand its popularity.

As for people under the age of 18 who basically do not drink alcohol, it is not very meaningful to increase brand awareness among them, because in a few years, when they start to come into contact with alcohol, they will naturally know about it.

Let's talk about sales. Marketing ultimately leads to sales. Can joint branding increase the public influence and promote the sales of Moutai among young people? I think it is difficult.

Would a person who has never consumed Moutai spend more than 1,000 yuan to buy a bottle of Moutai just because he drank a cup of coffee worth 20 yuan or ate an ice cream worth dozens of yuan? Impossible, this does not conform to the consumption habits and concepts of such people.

An event marketing may boost the sales of ordinary-priced fast-moving consumer goods in the short term, but it is unlikely to help much in the sales of luxury goods.

So a drinker, let's say a young person, cannot possibly not know Moutai. He knows it but doesn't buy Moutai simply because he can't afford it. He certainly won't suddenly become rich enough to buy Moutai just because of a marketing campaign.

Moutai’s co-branding has allowed it to lower its prices to a level that even ordinary people can afford, which is a problem for a luxury brand.

02 What does luxury mean?

Let’s first look at the characteristics of luxury brands.

Luxury goods are essentially different brands from mass consumer goods. Over the years, they have been building their brand image and advantages through the principle of "anti-(mass consumer goods) marketing".

1. Luxury means inequality

Mass consumer goods are synonymous with democracy and equality.

Mass consumer goods use productivity as the main means to reduce prices, so that the public can enjoy goods and services. The most representative product is Ford Motor, which uses the production line to reduce the price of cars to a level that almost everyone can buy. Later history has repeatedly demonstrated this proof, from televisions, washing machines to computers, these products were very expensive at the beginning, and then quickly became available to ordinary people at a lower price.

Luxury is synonymous with class and difference.

Luxury goods have always served only a small number of people. Today, luxury brands are not incapable of improving production efficiency to reduce prices, but are unwilling to do so. They prefer to maintain a certain production speed to control market sales. As Vincent Bastien, author of "Luxury Strategy", said, equality is the enemy of luxury goods.

2. Luxury means scarcity

If mass consumer goods want everyone to be their customers, then luxury goods only want the rich to be their customers.

The number of cars produced by Ferrari is deliberately kept below 6,000 all year round. The CEO of Hermès once said, "When a product sells too well, we will stop producing it." During the 2020 epidemic, you should have seen a lot of news about luxury brands destroying goods.

These luxury goods can maintain the scarcity of their products to maintain year-round price increases and enhance brand value.

Many luxury brands have relatively inexpensive entry-level products in order to get them to buy more expensive products in the future. However, they have limited quantities of these products. Selling too many entry-level products will make the class that buys more advanced products feel offended and their value will be diluted. Therefore, when the economy is down, LV will reduce the number of entry-level products on the one hand, and increase the overall price of products on the other hand to reduce the group of "people without income".

Luxury goods do not win by quantity, but by brand value-added. Brand value-added comes from the sense of exclusivity created by luxury brands. A Porsche president once said a sentence that reflects the importance of this sense of exclusivity: When I see two Porsches on the same road, I start to worry.

3. Luxury means it is not easily available

The experience of buying luxury goods for ordinary people is always not so friendly. Sometimes they have to queue up in front of the store to enter. Sometimes they like a bag but are told by the salesperson that it is out of stock. Sometimes they want to customize a car but have to wait for several months or even a year or two. They always set up an obstacle when people’s desires burst out, preventing them from getting it smoothly.

The reason why luxury goods are not easily available to consumers is related to maintaining scarcity. Scarce things are of course not that easy to get. Want to buy Moutai at the original price? Sorry, you need to be fast and download the official APP. In short, they create all kinds of difficulties to make you feel that buying the goods is a great luck.

This characteristic that is not easily available maintains the lofty brand image of luxury goods.

The president of BMW USA once said: "My job is to make sure that all 18-year-olds in America are determined to buy a BMW as soon as they have money. I want to make sure that they go to sleep at night dreaming about it."

Because it is not easily obtained, it becomes the dream of many people.

The reason why luxury goods are luxury goods is precisely because of their high prices, scarcity, inequality, and inability to be easily obtained. Moutai is just the opposite of multi-brand collaborations. It lowers its price and almost everyone can easily buy it. Therefore, its luxury characteristics are greatly reduced. People who originally consumed Moutai will feel that their high-end brand label identity is affected.

03 Does luxury need to become younger?

Many people say that Moutai is doing joint-branding because its revenue is under pressure and it wants to attract young people to become its customers. This problem does not exist.

From 2020 to 2022, Moutai's revenue exceeded 100 billion in the three years, and its net profit grew rapidly. In 2022, Moutai's net profit reached 62.716 billion yuan, a year-on-year increase of 19.43%, setting a new high.

Although consumption has been downgraded, Moutai has maintained steady growth in recent years and is basically unaffected by the overall environment. This is a typical feature of luxury goods, which can maintain income in good years and grow steadily in bad years, because the wealthy will basically not change their consumption habits due to economic impacts, only the middle class and below will change.

The moat of luxury brands is deep enough because their sales and profits rarely fluctuate with economic fluctuations.

Moutai's target audience is not the middle class or below, nor the young people, but the rich. The steady stream of rich people is the foundation that ensures Moutai can have stable income regardless of economic growth or economic downturn.

A few years ago, the former chairman of Moutai once said, "Young people don't drink Moutai because they haven't grown up yet." This sentence once caused great controversy, and many people expressed ridicule and disdain for this sentence. But this sentence just reflects the positioning of Moutai - it is not a high-end wine for young people, but for the rich.

Young people do not have enough purchasing power to afford Moutai. But once they become wealthy middle-aged people and start drinking Moutai, they can’t stop. On the one hand, it is difficult to go from extravagant to frugal. On the other hand, drinking Moutai represents high-end and social status. In order to maintain this image, people who have drunk Moutai find it difficult to go back to drinking cheap wine.

There should be a second half to the words of the former chairman of Moutai: When you are 40 years old and have drunk Moutai, you will come back to thank me.

Therefore, Moutai does not need to be young-oriented. The young people attracted through joint marketing cannot afford Moutai and still cannot afford it. When they reach middle age and have money, they will not choose Moutai because of the joint marketing of the past. At this time, it is natural for them to choose Moutai.

As a person born in the 80s and 90s, think about it, did luxury brands such as LV and Prada do any marketing to cater to your youth when you were in your 20s? Of course not. But even if they didn't do such marketing, would you still know these brands and still buy them when you have money?

04 Cross-border brand cooperation emphasizes equality

Another problem with Moutai's co-branding is the unequal brand power, which will weaken Moutai's brand power. As mentioned above, the reason why existing Moutai consumers feel that they are noble is because of Moutai's unique characteristics as a luxury brand with high prices and scarcity. However, after cooperating with mass consumer products, this characteristic disappears. If such marketing is carried out for a long time, the brand power will inevitably be weakened.

There are also many equal joint collaborations among luxury brands.

For example, BMW and Louis Vuitton jointly created travel luggage. This travel luggage series embodies the classic elements of Louis Vuitton, such as black leather handles, metal locks, iconic letter patterns, etc. Each item has also been carefully designed to fit the streamlined outline of the BMW i8.

High-end wine brand Hennessy has also had cross-border collaborations. It and LV once launched a suitcase set that was priced at more than 200,000 US dollars.

We are more familiar with cases such as the cooperation between Huawei and Porsche. Both parties get what they need. Porsche gets the traffic brought by Huawei, and Huawei gets the high-end feeling of Porsche. This mobile phone is priced at more than 10,000 yuan, which further increases the price of Huawei mobile phones. This price itself is also aimed at wealthy people.

The characteristics of these collaborations are that they are all collaborations between top high-end brands, and the collaboration makes the prices of products go up rather than down, which is the opposite of Moutai's strategy.

05 Moutai’s biggest problem is that it has too many cross-border collaborations

In today’s marketing world, it is difficult for luxury brands to 100% guarantee that cross-border cooperation is between peer brands. Occasionally, cooperation with mass consumer goods may be beneficial because it makes consumers feel fresh, and if the cooperation ends quickly, it is not a loss to earn a wave of traffic. It can be considered the spice of life.

But the problem with Moutai is that this kind of cooperation is a bit too frequent. Just a few days after the launch of the sauce-flavored latte, the sauce-flavored chocolate is here again. If it really continues to cooperate one after another, it means that its price will drop again and again, and its brand image will also drop again and again, then its brand power will really be weakened.

The rich man who only drank Moutai didn't like the sauce-flavored latte very much. He waited until the sauce-flavored latte was off the line and could finally pour himself a cup and experience the high-end life again. However, he heard that Moutai had cooperated with Dove again, so he dropped the Moutai that he had put to his mouth directly to the ground.

Author: Xunkong, WeChat public account: xunkong2005