Chinese liquor giantKweichow Moutaihas announced it is shutting down its e-commerce unit, which had failed to solve the problem of distributors hoarding stock to drive up prices, reported Caixin.
Moutai’s board voted unanimously to close the unit, the company saidin a statement to the Shanghai Stock Exchange on Tuesday. No reason was given for the closure. The company’s stock edged down 0.17% in Friday trading.
In 2017, Moutai told all of its distributors that they’d have to sell at least 30% of the products they received through the company’s own e-commerce platform, ensuring Moutai could track their sales. That was increased to 40% last year. Hoarding had long been a problem for the company, with distributors creating scarcity in the market to increase prices.