(Yicai) May 10 -- Kweichow Moutai will continue its efforts to promote the coordinated balance of wholesale and direct sales channels, according to the acting general manager of the Chinese liquor giant.

Kweichow Moutai’s sales channels consist of wholesale channels, such as social distribution, e-commerce, and supermarkets, and direct sales channels through self-owned brands and the iMoutai app, Wang Li said at a performance briefing yesterday.

Last year, Kweichow Moutai’s revenue from direct sales and wholesale channels totaled CNY67.2 billion (USD9.3 billion) and CNY80 billion, accounting for 45 percent and 55 percent of the total, respectively.

However, the ratio of revenue from direct sales to the total fell to just over 42 percent in the first quarter of this year. Moreover, the revenue growth rate from direct sales was 8.5 percent, versus 25.8 percent for wholesale channels in the period.

The main reason for the slower revenue growth rate from direct sales channels was the fact that the 20 percent upward adjustment of the ex-factory prices of certain products since last November led to an increase in wholesale revenue but not in direct sales revenue in the first quarter, said Jiang Yan, Kweichow Moutai’s chief financial officer.

Kweichow Moutai achieved an operating revenue of CNY45.8 billion and a net profit of CNY24.1 billion in the three months ended March 31, up 18 percent and 16 percent, respectively, from a year earlier, according to the company’s latest earnings report.

Net profit grew slower than revenue in the first quarter because the reevaluation of the minimum taxable base price for the consumption tax on certain products resulted in a rise in the tax base and expenses, and also because of the increase in sales expenses from intensified market promotion efforts, Wang explained.

Editor: Futura Costaglione