A marketing campaign has once again plunged "Shaanxi's Number One Liquor," Xifeng Liquor, into a public opinion storm.

To this day, netizens on social platforms have not ceased their criticism and mockery with slogans like "boycott Xifeng" and "jia tou wine."

Recently, the Guohua Porcelain brand under Xifeng Liquor held a Mid-Autumn festival event at the Datang Furong Garden in Xi'an, inviting the controversial internet celebrity Sima Nan.

He appeared at the event dressed as Li Bai, a famous ancient poet, and recited Li Bai's poem "Bring in the Wine" at the banquet.

Sima Nan has tens of millions of followers on social platforms, but his personal image and statements are highly controversial.

Initially, he became popular online as an "anti-American" figure, but in 2010, it was revealed that he had purchased property in the United States.

On June 30th last year, he received an invitation from the U.S. Embassy to attend the Independence Day celebration.

As a result, Sima Nan's image collapsed, and he was accused by netizens of being inconsistent in his words and actions, leading to being banned from speaking on several platforms.

The presence of the controversial internet celebrity at the marketing event immediately sparked a lot of negative comments on the internet, with some netizens even saying, "I will never drink Xifeng Liquor again."

Under the pressure of public opinion, the official flagship store of Xifeng Liquor once temporarily closed its comment section.

Faced with repeated marketing mishaps and controversies, Sima Nan responded on Weibo, stating that he did not take money from Xifeng Liquor, nor did he endorse or advertise for Xifeng Liquor.

He only participated in the Weibo Mid-Autumn Dynasty Night Banquet event, with Xifeng Liquor being the sponsor.

Guohua Porcelain, which invited Sima Nan, is a brand under Xifeng Liquor.

Faced with the sudden public opinion crisis, Xifeng Liquor quickly distanced itself, stating, "Sima Nan is not a brand spokesperson," and on the afternoon of September 19th, it urgently issued a "Notice on Standardizing Market Promotion Activities" (hereinafter referred to as the "Notice") to its subsidiaries, dealers, and suppliers.

The notice pointed out that to further standardize the market behavior of Xifeng Liquor and to effectively protect the brand image and the legal rights and interests of dealers and the company, the following requirements are made for subsidiaries and related dealers: First, all market activities must implement a written filing management system, which can only be implemented after being reviewed and approved by the marketing management company's marketing promotion department.

Second, the experts, scholars, important leaders, cultural celebrities, and internet influencers invited to participate in the activities must conform to the core values of socialism and be in line with the brand concept, corporate culture, and business strategy of Xifeng Liquor.

Third, all types of market promotion activities must strictly abide by public order and good customs and national laws and regulations.

It is strictly forbidden to carry out market brand promotion activities in the name of Xifeng Liquor without authorization, and serious accountability will be pursued once discovered.

In fact, this is not the first time Xifeng Liquor has had a marketing mishap.

In March of this year, another of its branded brands, Shaanxi Qinhuang Imperial Banquet, also dragged down Xifeng Liquor.

At that time, "Xifeng Liquor Qinhuang Imperial Banquet" used the portrait and name of the star Huang Bo for commercial activities in the promotion, sales, and franchise activities of the brand and related liquor products without his authorization, leading to a dispute over infringement.

Although Xifeng Liquor Qinhuang Imperial Banquet has apologized to Huang Bo for this, it still had a certain impact on the brand value of Xifeng Liquor itself and exposed the chaotic management of its branded brands.

The root cause of the repeated mishaps is the aftereffect of Xifeng Liquor's branding model.

Decades ago, Xifeng Liquor was once known as one of the "Four Great Liquors" along with Moutai, Luzhou Laojiao, and Fen Liquor.

Around 2010, in order to get rid of problems such as insufficient production capacity, limited popularity outside Shaanxi Province, and difficulties in the nationalization process, Xifeng Liquor vigorously developed branded liquor.

The so-called branding refers to the company purchasing other fragrance finished liquors from external liquor factories for cooperative production of branded products.

Xifeng Liquor also gave dealers a large space for play, adopting a consignment system in the sales model, and dealers have many rights such as liquor body and packaging design, market marketing, brand construction, and exclusive sales of a series of products in designated areas.

According to previous media reports, it is not fully estimated that there were once as many as thousands of branded liquors on the market of Xifeng Liquor, which is rare in the liquor industry and is jokingly referred to in the industry as "the Antarctica of the liquor industry."

The branding model of Xifeng Liquor has existed for more than ten years, and the pros and cons of the company have gradually become clear.

In the first few years after the launch of the branded liquor, the sales proportion of the cooperative production products under Xifeng Liquor increased from less than 5% in 2013 to 36% in 2017, which also promoted the overall revenue scale of Xifeng Liquor Company.

However, in the long run, the negative impact of chaotic management under the branding model on Xifeng Liquor has become increasingly obvious.

Industry insiders believe that if the manufacturer is only responsible for filling, and the channel development and operation are all handed over to the dealers, it is difficult for the manufacturer to control the market; secondly, most of Xifeng Liquor's branded products are mid-to-low-end products, with a complex product line, making brand construction difficult, resulting in the company's profitability being at a medium to lower level in the liquor industry.

The prospectus shows that the gross profit margin of Xifeng Liquor from 2015 to 2017 was 50.84%, 53.58%, and 54.94%, respectively, while the average gross profit margin of comparable companies in the liquor industry was between 63% and 68%.

What's more serious is that due to the chaotic management of its dealers and branded liquor, the quality crisis of its products once seriously dragged down the reputation of the main brand of Xifeng Liquor, and the company gradually fell behind in its later development, and exited the ranks of the first-line famous liquors.

Four unsuccessful IPOs were once the same as the four great liquors, and Xifeng Liquor is gradually moving away from Moutai, Luzhou Laojiao, and Fen Liquor.

In 2023, the revenue of Guizhou Moutai exceeded 150 billion yuan, and both Luzhou Laojiao and Shanxi Fen Liquor exceeded 30 billion yuan, while Xifeng Liquor just broke through the 10 billion yuan mark.

At the beginning of the year, at the National Dealers and Suppliers Conference, Xifeng Liquor announced that its revenue last year was 10.34 billion yuan, a year-on-year increase of 23%.

Among them, the sales of the Red Xifeng series of products increased by 102% year-on-year, and the sales of products above 100 yuan increased by 38% year-on-year.

Xifeng Liquor is also the only one among the four great liquors that has not yet gone public, and its capital road is quite bumpy.

It has made four attempts to go public from 2012 to 2018, but all failed.

The reason for the first failure was that it was exposed to have falsified its financial performance in 2010, with an actual loss of 420 million yuan, which did not meet the hard condition of making a profit for three consecutive years in the IPO rules.

In 2016, the company tried to enter the capital market again, and the new prospectus disclosed that its revenue and net profit from 2012 to 2014 showed a downward trend, and the financial executives were exposed to have embezzled bank acceptance bills many times.

After being questioned by the Securities Regulatory Commission, Xifeng Liquor withdrew its IPO application overnight.

The third submission of the prospectus occurred in 2017, but it was forced to stop due to the "corruption storm".

Zhang Suoxiang, the former general manager of Xifeng Liquor, and Gao Bo, the former deputy general manager, were sentenced to prison for corruption and bribery, and dealers Hao Hailu and Ding Jimin were sentenced to prison for obtaining original shares through bribery.

A year later, Xifeng Liquor prepared for the fourth attempt to go public.

This time, there were no problems with performance and executives, but it was exposed that the products were suspected of exceeding the standard for plasticizers.

Four unsuccessful experiences of going public have exposed many internal problems of Xifeng Liquor to the public.

2019 was the beginning of Xifeng Liquor's attempt to turn around.

After the new chairman Zhang Zheng took power, he began to focus on the construction of the main brand of Xifeng Liquor and made reforms to the branding issue.

Zhang Zheng tried to cut off some branded products, promote channel reforms, reduce dependence on large dealers, but the relationship between Xifeng Liquor and branded manufacturers is complex and close, and it is still impossible to completely get rid of such products in the short term.

In 2020, Xifeng Liquor first proposed a development strategy of "high-end and nationalization".

Now the company has officially entered the scale of 10 billion yuan in revenue, which may be a bigger turning point.

Zhang Zheng once said that crossing the 10 billion yuan is only the first step of Xifeng Liquor's long journey, and the goal is to return to the ranks of the first-line famous liquors.

However, the branding issue is difficult to get rid of, and brand construction is difficult, how can the market and consumers equate Xifeng Liquor with the first-line famous liquors?

A month ago, Xifeng Liquor announced the completion of capital increase, with five investors increasing the capital by 489 million yuan, accounting for 4.15% of the shares, making the valuation of Xifeng Liquor reach about 11.8 billion yuan.

The capital increase is for the construction of 100,000 tons of high-quality base liquor and supporting production projects, which is expected to be completed in 2025.

However, the original plan for the capital increase of Xifeng Liquor was up to 2.72 billion yuan, and the actual fundraising was only slightly more than 30% of the plan.