A 200.9 per cent leap in revenue has been recorded by alcoholic beverage distributor Silver Base for the year ended March 31.
This has taken its revenue to HK$1260.2 million (US$162.4 million) from HK$418.9 million the previous fiscal year, and the company is migrating to a “revolutionary” e-business model with the aim of achieving faster growth.
Revenue from mainland China accounted for 43.1 per cent of the group’s total revenue, easing from 57.8 per cent the previous year, while revenue from the international market accounted for 56.9 per cent, up from 42.2 per cent.
After three years of adjustment, China’s baijiu (traditional spirit) industry grew last year, says the company. There has also been recovery in the catering industry, hit by restrictions on government spending, indicating that commercial and mass consumption has replaced the official sector as major contributor.
Price stability
There has also been rationalisation and stability of the prices of Moutai and Wuliangye (baijiu brands), indicating that consumers accept current price levels. Silver Base believes the two brands have become the preferred choices of high-end baijiu drinkers.
About 550 million litres of wine was imported by China last year, representing year-on-year growth of about 44.6 per cent and worth about US$2.03 billion, up 34.3 per cent. With this warming up of the overall market, the company plans to actively develop its wine business in China.
Meanwhile, the group has been developing its eCommerce, including the launching of its Wine Kingdom online store. As well as maintaining relationships with major shopping platforms in China such as Amazon, Anhui Jiajiamall, Hunan Happigo, Jingdong Mall, Rongyigou, Shunfeng Heike, T-mall, Vip.com and Yihaodian, Silver Base says it has been experimenting with innovative internet-based business models.
With China’s economy entering the “new normal”, the group predicts there will be more consumption but reduced production capacity in China’s baijiu industry, which will greatly enhance market concentration. Along with increasingly stringent food-safety supervision in China, consumer confidence has increased in the quality of liquor.
“Sales trended up during the low season, rising beyond expectation heading into the traditional high season,” says chairman Liang Guoxing.
As well as distributing traditional Chinese brands, the group, founded in 1997, distributes wine from such sources as France, Italy and Portugal, Italy. Its ecommerce platform www.pinhui001.com launched in August.
