By Bloomberg News
(Bloomberg) — Alcohol-infused chocolate balls are the latest item to take over China’s social media as consumers clamour for the surprise tie up between liquor giant Kweichow Moutai Co. and Mars Inc.’s Dove brand.
The chocolates, which sell for 35 yuan (US$4.80) for two 10-gram pieces, sold out immediately when they were launched on Saturday and presales every day since are also sell outs. Despite some social media users complaining about the high price, the chocolates are also proving popular on re-sale platforms, where 12 chocolates are selling for 500 yuan, according to local media reports.
The partnership follows this month’s popular launch of an alcohol-infused latte, sold at Luckin Coffee Inc. stores across China, as Kweichow Moutai tries to boost its appeal to a younger demographic. The firm gets more than 80% of its revenue from moutai, a style of coluorless but typically fiery liquor that’s traditionally served at state banquets and popular among middle-aged consumers.
“As a traditional Chinese brand, Moutai needs to be forever young and embrace the young generation to enhance vitality,” Chairman Ding Xiongjun said on 16 September.
But market watchers are split on whether the recent tie ups can translate to better sales over the longer term. Bloomberg Intelligence has said it affirms the view that the distiller may continue with its accelerated efforts to rejuvenate the brand.
Others have warned that the popularity of the low-cost items may tarnish its luxury image.
“Marketing campaigns that link a premium brand like Moutai to too many mass-market consumption may not be helpful,” said Zhao Huanyan, a Shanghai-based economist at Huamei Consulting. “There may not be any long-lasting impact on those newly-targeted consumers who don’t drink Moutai, and meanwhile the campaigns may confuse its existing drinkers.”
The liquor firm has already sought to be clear with drinkers on its priorities, vowing not to shift away from its core business.
The collaboration with Dove is “trying to enhance Moutai’s competitiveness,” said Ding. “No matter how the time changes and how consumption is upgrading, Moutai started with liquor and will focus on liquor.”
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