Domestic
Falling market share brings reform at famed Fenjiu liquor
By Yang Cheng (China Daily)
Updated: 2010-08-10 14:13
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State-owned liquor giant Xinghuacun Fenjiu Group has set an ambitious sales target to surpass 10 billion yuan in five years and double that by 2020, Wang Jingmin, vice-president of the group, told China Daily in an exclusive interview.
The company headquartered in Shanxi province was the national market leader before the mid-1990s, "but we slid from No 1 to No 5 currently", he admitted.
The vice-president said the company's senior management board responded to falling market share with "a major reshuffle late last year" and is now "launching new strategies" along with increasing production from 50,000 tons to 100,000 tons of liquor annually.
The company held a grand promotional event on June 18 to mark the 95th anniversary of winning a gold medallion at the 1915 Panama-Pacific International Exposition in San Francisco.
"This year is called China's Expo year, so the celebration was aimed at highlighting our historical status, boosting our image and enhancing the brand's recognition," Wang said.
Massive promotion events were also staged in recent months in Guangzhou and Beijing.
Wang said the company is now targeting higher-end consumers and has raised the quality of its product.
He added that the company is laying the groundwork for future success by developing strong, competitive staff. This year Fenjiu sent 28 of its top technical staff and 50 managers to study at Jiangnan and Tsinghua universities, part of its efforts to boost its strength.
The vice-president noted Fenjiu is a fragrant liquor that in the 1980s was the most favored Chinese brand overseas.
"We expect our overseas market to recover this year, regaining our past glory," he said.
The company has built a new facility with a production capacity of 20, 000 tons annually for its Zhuyeqing liquor made from plants with medicinal properties, which is popular with foreigners.
Charitable causes
The company is also to stepping up its corporate social responsibility efforts.
In the past few years it has donated 30 million yuan to charity, including to assist with Wenchuan and Yushu earthquake relief efforts and to help alleviate poverty in Shanxi, its home province.
A charity event that will also mark the anniversary of its Panama award will be held on Sept 5, when 95 bottles of specially made "Panama Commemoration Fenjiu" will be auctioned and proceeds used to support poverty-stricken students.
As well, the nationally preserved Fenjiu that has been aged in cellars for many years to be used at State banquets will also support charity. The company plans to donate 200 yuan from every bottle of the treasured liquor sold, funds that will be administered by its Fenjiu Scholarship Fund.
Wang attributed the company's past success to "the intelligence of ancestors" and the "hardworking spirit" of Shanxi people, who are considered by fellow Chinese to have a "mild character".
The vice-president is planning to edit a book on ancient poems and essays that describe Fenjiu liquor.
Fenjiu's history can be dated back to the Yangshao Culture 6,000 years ago, according to the discoveries of China's culture relics administrative authorities.
Its Xinghuacun production site is part of a famous poem that almost every Chinese can recite since youth because it is in primary school language textbooks.
In 1923, Fenjiu producers registered its trademark with the government of the day, the first among all liquor producers. Its popularity lasted a long time and was a top seller until the nation's reform and opening up gain rapid momentum in the mid-1990s.
"We admit that the market decline since then was a results of our internal management so we are making strides to transform our ideology and strengthen our corporate culture," Wang said.
