Last night, according to the official website of the State Administration for Market Regulation, market regulatory authorities across the country investigated and dealt with 46,900 illegal advertising cases in 2024, with a total penalty and confiscation amount of 349 million yuan. Among them, the total fine and confiscation amount of Tinghuajiu was 4.3 million yuan. In fact, CCTV focused on Tinghuajiu on March 15 last year, calling it “false propaganda.” After just one year, Tinghuajiu has made a "comeback" and its advertisements have spread all over the country.
Recently, Sina Finance visited Tinghuajiu Beijing Tasting Center. Regarding the "false propaganda" exposed on March 15, the store staff strongly denied it, saying, "It was unfair competition, not false propaganda circulating in the market. We accepted the results calmly and made corresponding rectifications."
Today, Tinghuajiu’s boutique series products have been suspended from mainland sales, while the standard version is still available for public sale. Sina Finance found that its standard version, which retails for 5,860 yuan per bottle, is generally sold in the 1,200-2,300 yuan range on platforms such as Xianyu. At the same time, the official customer service staff of Tinghuajiu said that the online channel is still in the process of recovery, and now only the WeChat mini program member store is open for purchase. However, the inquiry found that in the past six months, the store had only one positive review.
Sales channels are in chaos, and online channels have not yet been opened... How far can Tinghuajiu go after recovery?
(Screenshot of the official website of the State Administration for Market Regulation)
Quiet recovery: Xianyu has become a “shipping place”
At the 2024 315 Party, Tinghuajiu was named and criticized by CCTV for being involved in false propaganda. The column cracked down on fake claims about its promoted functions of "improving immunity, improving sleep, ensuring male function, and anti-aging," claiming that the "high-tech" cooling agent promoted by Tinghuajiu was actually common mint extract.
For a time, many Tinghua Wine experience stores in Beijing, Chengdu and other places were closed; online channels such as Taobao and JD.com were removed from the shelves; the stock price of the parent company Qinghai Spring plummeted by nearly 90%.
At that moment, Tinghuajiu was on the verge of death.
But soon, two months after closing the store for rectification, on May 9, 2024, Tinghuajiu issued three announcements in succession to make strategic adjustments to market policies:
First, Tinghua Wine implements a limited quota supply system, and the total volume of Tinghua products put on the market each year does not exceed 3,000 tons (including wine for sales, wine for promotion and wine for tasting);
Second, the dealer settlement price of Tinghua Wine’s standard bottle has been raised to 3,989 yuan/bottle;
Third, the sales of Tinghua alcohol packaging series products in the mainland have been suspended.
It is reported that there are two major series in the Tinghua Wine product matrix, namely the Tinghua Premium Series (52° strong aroma, 53° sauce aroma), priced at 58,600 yuan/bottle; and the Tinghua Standard Series (52° strong aroma, 53° sauce aroma), priced at 5,860 yuan/bottle.
This time, Tinghuajiu has turned its blade inward and directly cut off a core product line. This is not only regarded by the outside world as "surviving with a broken arm" after the public opinion storm, but also a major manifestation of its return to the market.
Liquor analyst Cai Xuefei believes that "under the special domestic market opinion environment, Tinghuajiu has only optimized its high-end strategy, and it has not affected the promotion and strategic implementation of Tinghuajiu. Especially in the group buying market for high-net-worth individuals, Tinghuajiu still has a certain consumer group."
At the same time, he also said that the legal penalties related to Tinghuajiu have ended, and the relevant rectifications have been recognized by relevant departments, so it is normal to resume related advertising and offline operations. After all, the brand still needs to continue to develop.
In addition to being placed in important communication points such as elevators across the country, Tinghuajiu is also frequently mentioned on second-hand platforms and Xiaohongshu.
Taking Xianyu as an example, some sellers sell Tinghua wine publicly with gimmicks such as "company benefits", "discontinued" and "Tinghua Boy". The prices are mostly in the range of 1,200-2,300 yuan, and most of them are in new or quasi-new packaging.
(Screenshot of Xianyu platform search)
Whether compared to the dealer settlement price of 3,989 yuan/bottle or the official selling price of 5,860 yuan/bottle, the products on the second-hand platform are far below the official planned "price red line."
(On social platforms, netizens from many places posted Tinghuajiu elevator advertisements)
On-site visit, tasting center denies “false propaganda”
In response to this situation, Sina Finance visited the Tinghua Wine Beijing Tasting Center. The investment manager said that Tinghuajiu itself has strict control over channels and market prices. Products from official channels and its dealers must be sold at planned prices. "We do not pressure dealers to sell goods, and we do not want dealers to destroy the price red line."
(Real shot at Tinghua Beijing Tasting Center)
"What we mainly do is the group purchase channel. We do not do the normal display and circulation of tobacco and alcohol terminals," she said. To obtain the distribution qualification of Tinghuajiu, you must first examine the dealer's ability to control the group purchase channel, that is, whether it can sell the wine. Secondly, it is also necessary to consider whether dealers have the ability to support operating costs in different cities.
In addition, she also emphasized that other brands are not allowed to be sold in Tinghuajiu group buying stores. Like traditional group buying stores, the parallel operation of multiple high-end brands such as Moutai, Wuliangye, and Langjiu cannot pass the review.
It is worth noting that the Tinghua alcohol tasting series has been completely stopped in China. Even dealers cannot represent it and can only use it for tasting in offline experience centers. Currently, the standard series priced at 5,860 yuan/bottle is still open for investment across the country.
After closing the store for rectification, the focus of the staff's explanations has shifted to the age, taste and color of the wine. As for the three Nobel Prize winners who are scientific research experts of Tinghua Wine, as well as the health benefits shown on the large screen in the store, the store staff did not mention it.
(Real shot at Tinghua Beijing Tasting Center)
Regarding the March 15 incident, the store staff strongly denied "false propaganda".
The investment manager emphasized, "That was unfair competition, not false propaganda circulating in the market. We accepted the results calmly and made corresponding rectifications."
When asked when the online channels will be opened, Tinghuajiu’s official customer service staff said that Tinghuajiu’s online channels are still in the process of recovery. Currently, only the Tinghua Member Store in the WeChat mini program is open for purchase.
Although the official staff of the specific sales volume has not yet disclosed, judging from the sales situation of the mini program store, it has only received one positive review in the past six months. It is not difficult to infer that Tinghuajiu’s online channels are far from open.
Hard to say success, the parent company has lost 1.2 billion in five years
In fact, Tinghuajiu’s sales volume and scope of influence have been quite limited since the brand was established, making it difficult to say it was successful.
On the evening of January 16 this year, Qinghai Spring Medicinal Resources Technology Co., Ltd. (hereinafter referred to as "ST Spring"), the parent company of Tinghua Liquor Industry, issued a pre-loss announcement for 2024.
The company estimates that the net profit attributable to shareholders of listed companies in 2024 will be -145 million yuan to -174 million yuan, and the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses will be -117 million yuan to -146 million yuan, and a loss will occur.
As for the reason for the loss, ST Spring stated in the announcement that the main reason was that the company's original business plan for the wine sales segment was not fully implemented. Subsequently, the company worked hard to restore the normal operation of related products, and the related expenses were relatively large, and the scale effect has not yet been formed; at the same time, the company has made impairment losses on some investments, inventories, intangible assets, receivables, etc.
And if the time dimension is lengthened, ST Spring's dilemma becomes even more obvious.
From 2020 to 2023, its net profit attributable to the parent company will suffer losses of approximately 320 million yuan, 249 million yuan, 288 million yuan, and 268 million yuan respectively. With the addition of 2024, the cumulative loss in five years has exceeded 1.2 billion yuan.
According to the Shanghai Stock Exchange’s new delisting regulations, ST Spring will face the risk of forced delisting if its final financial report revenue in 2024 fails to reach 300 million yuan or fails to reverse its losses.
ST Spring was originally known as "the first stock of Cordyceps sinensis", and Jicao 5X powder tablets were once very popular.
After the Cordyceps health care concept failed, the company's chairman Zhang Xuefeng turned to the liquor business. He first obtained the 20-year national distribution rights for Lianglu Liquor produced by Yibin Lianglu Liquor Industry, and then changed it to Yibin Tinghua Liquor Development Co., Ltd. and began vigorously marketing the concept of health wine.
In order to increase the value of Tinghuajiu, Zhang Xuefeng not only wrote the product development story as a "dream from the gods", but also invited Nobel Prize winners as gimmicks and placed a large number of advertisements in airports, high-speed rail stations and other areas. Marketing expenses have risen from 48 million yuan in 2020, and sales expenses in the first three quarters of last year alone reached 112 million.
Nowadays, Chinese liquor has entered an era of shrinking competition, the Matthew Effect has been further strengthened, and market share has concentrated on leading companies. Faced with rising sales expenses year after year and a "quagmire" of losses that have been unable to get out of the market, Tinghuajiu seems to have "no cards left to play."
In this regard, wine analyst Cai Xuefei commented that, viewed positively, Tinghua Wine has pioneering value in terms of brand, quality and category, which has greatly raised the price ceiling of Chinese wine and expanded the category boundaries of Chinese wine. Although there are flaws in the publicity, overall a positive attitude towards it should be taken.
Text | Sina Finance Zhang Ao