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Struggling Baijiu Company Looks to New American GM
Summary:Shuijingfang baijiu has tried to expand in overseas markets at the cost of losing market share during the domestic peak period. The company now has a new American general manager and still hopes to ascend to the top three high-end baijiu producers in China.

By Jia Huajie (
Issue 613, April 1, 2013
Corporation, page 31
Translated by Zhu Na
Original article:

A struggling baijiu manufacturer in Sichuan is hoping to reverse falling sales with an American as its new general manager. 

Los-Angeles native James Michael Rice (大米) first came to Beijing in 1987 to study Chinese history at Yunnan University and was named general manager of Sichuan Shuijingfang Company Co. Ltd. on Mar 15.

“I never worked in the U.S,” Rice said. “I’ve always worked in China since I graduated from university and got a job.”

“As for the Baijiu industry, I’m still learning at the moment.”

Currently Shuijingfang is facing many problems. On Mar 28, the company released its annual report showing that 2012 revenue reached 1.6 billion yuan - an increase of 10.4 percent year-on-year. The net profit to shareholders was 338 million yuan - an increase of 5.4 percent.

The company’s former manager set a goal for Shuijingfang to become one of the top three manufactures of high-end baijiu in China by 2015, but the latest numbers show it’s moving further away from that goal. 

Rice says that the goal won’t change. During the first week in his new position, he went to the Shanghai offices of Diageo – one of Shuijingfang’s distributors- and asked it to hasten promotion in overseas markets.

Rice says the company’s overall plan and development direction are correct. “Shuijingfang isn’t short of talented people,” he said. “Our problem is a need for greater effort and faster speed.”

Shuijingfang’s exports currently account for 10 percent of total sales, which is the highest proportion in the industry. Its products have been sold in 42 duty free shops around the world. But as the company was busy promoting itself overseas, it missed the domestic baijiu market’s peak and lost market share. At the same time, its overseas promotions haven’t brought significant returns on investment.

Responding to criticism that Shuijingfang’s sales agent model is too narrow and not as diversified as competitors, Rice said Shuijingfang’s provincial level agent model brings its own advantages. “Distributors see us and our company as one family, so their sense of loyalty is higher,” he said. “So they’re not going to one day sell our brand and the next sell another company’s brand.”

Although he has no experience with baijiu, Rice points to his previous work in consumer goods and says there’s a lot of crossover between the two industries. He’s now sold his house in Shanghai and settled in Chengdu with the hope of working at Shuijingfang for at least eight years.

But Shuijingfang’s competitive environment is getting tougher as the two baijiu giants Maotai and Wuliangye have reduced prices. Haitong Securities has predicted that Shuijingfang’s sales will decline in 2013. 




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