Entering Russia will help one of China's liquor giants further explore the broader European market, analysts said Wednesday, as the renowned distiller of Moutai announced it would debut in that country.
Moutai, produced by China Kweichow Moutai Winery (Group) Co in Southwest China's Guizhou Province, will be sold in Russia at a price equivalent to that in China, which is about 900 yuan ($142) a bottle, Bloomberg reported Tuesday (US time).
Like vodka in Russia, Moutai is a kind of distilled white spirit made from sorghum, wheat or rice.
The date of entry into Russia was not disclosed.
"Russia is a good choice for Moutai to broaden its expansion into the European market as the Russian market is the important one in the European spirits industry," Shu Guohua, a Beijing-based liquor marketing expert, told the Global Times on Wednesday.
Moutai's brand awareness is high in foreign markets but it will still take three to five years for the brand to expand its reach in Russia, Shu said.
Shu also noted that although the domestic liquor industry has been under pressure from decreasing demand, the industry's momentum is still stable and its prospects are sound.
"When the frugality campaign began to curb extravagance starting in 2013, the prices of high-end spirits fell, cutting the profits of producing companies," Yang Qingshan, a Beijing-based independent liquor analyst, told the Global Times Wednesday. Yang forecast that domestic demand will rebound in the next five years.
A ceremony was held in Russia on Monday to celebrate Moutai's winning the Gold Medal at this year's Panama Pacific International Exposition, domestic news portal sina.com reported Tuesday.
The move into Russia represents a milestone for China's spirits producers, with Moutai setting a good example for Chinese branded liquor companies to go abroad, according to the report.
Moutai's first-half revenue hit 14.32 billion yuan, up 1.37 percent year-on-year, according to its financial report released in August.
Net profit, however, decreased 0.25 percent to 7.23 billion yuan.
Moutai will invest 25 million yuan with partners to establish an e-commerce platform to broaden its marketing channels and customer base, financial news portal ifeng.com reported on August 28.
