CNN BUSINESS – When Costco opened its first store in China in 2019, it wasn’t just the hot rotisserie chickens and discounted Birkin bags that lured frenzied crowds.
A fiery, throat-tingling liquor called Kweichow Moutai also flew off shelves.
At 1,498 yuan, or $209 for a half-liter bottle, it might not sound like the kind of bargain Costco shoppers usually go for — but in this case, it absolutely was.
That price represented a steep discount over Moutai sold elsewhere — that is, if you could get your hands on it. The luxury spirit is so beloved in China, it sold out quickly.
Even amid a global pandemic, Kweichow Moutai, the company that makes the eponymous liquor, had a banner year:
its stock surged around 70% on the Shanghai Stock Exchange in 2020.
The company, which is part state-owned and part publicly-traded, is China’s most valuable firm outside of technology — worth more than the country’s four biggest banks.
Globally, its market cap has not only surpassed all other alcohol distillers like Diageo and Constellation Brands, but also Coca-Cola, which had long held the crown as the world’s largest beverage maker by market cap.
Valued at 2.7 trillion yuan, or $421 billion, Kweichow Moutai is worth more than Toyota, Nike and Disney, too.
“Anytime they have any stock [of the product] available, it’s going to be gone almost instantly,” said Ben Cavender, the Shanghai-based managing director of China Market Research Group. “You’ll see people clamoring [for it].”
Apart from the Chinese diaspora, however, Moutai is still virtually unknown overseas. Almost all — about 97% — of its sales come from China alone, according to its financial reports.
So how is a company that sells its products primarily in just one country now worth more than some longstanding global behemoths? …
Click source below to read more.
