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RC Passage
Direction for the questions 5 to 8: The passage below is accompanied by a set of four questions. Choose the best answer to each question.
Moutai has been the global booze sensation of the decade. A bottle of its Flying Fairy which sold in the 1980s for the equivalent of a dollar now retails for $400. Moutaiâs listed shares have soared by almost 600% in the past five years, outpacing the likes of Amazon
It does this while disregarding every Western marketing mantra. It is not global, has meager digital sales and does not appeal to millennials. It scores pitifully on environmental, social and governance measures. In the Boy Scout world of Western business it would leave a bad taste, in more ways than one.
Moutai owes its intoxicating success to three factorsânot all of them easy to emulate. First, it profits from Chinese nationalism. Moutai is known as the ânational liquorâ. It was used to raise spirits and disinfect wounds in Maoâs Long March. It was Premier Zhou Enlaiâs favourite tipple, shared with Richard Nixon in 1972. Its centuries-old craftsmanshipâit is distilled eight times and stored for years in earthenware jarsâis a source of national pride. It also claims to be hangover-proof, which would make it an invention to rival gunpowder
Second, it chose to serve Chinaâs super-rich rather than its middle class. Markets are littered with the corpses of firms that could not compete in the cut-throat battle for Chinese middle-class wallets. And the country's premium market is massiveâat 73m-strong, bigger than the population of France, notes Euan McLeish of Bernstein, an investment firm, and still less crowded with prestige brands than advanced economies. Moutai is to these well-heeled drinkers what vintage champagne is to the rest of the world
Third, Moutai looks beyond affluent millennials and digital natives. The elderly and the middle-aged, it found, can be just as lucrative. Its biggest market now is (male) drinkers in their mid-30s. Many have no siblings, thanks to four decades of Chinaâs one-child policyâwhich also means their elderly parents can splash out on weddings and banquets. Moutai is often a guest of honour
Moutai has succeeded thanks to nationalism, elitism and ageism, in other wordsânot in spite of this unholy trinity. But it faces risks. The government is its largest shareholderâand a meddle someone. It appears to want prices to remain stable. Exorbitantly priced booze is at odds with its professed socialist ideals. Yet minority investorsâincluding many foreign fundsâlament that Moutaiâs wholesale price is a third of what it sells for in shops. Raising it could boost the companyâs profits further. Instead, in what some see as a travesty of corporate governance, its majority owner has plans to set up its own sales channel
In the long run, its biggest risk may be millennials. As they grow older, health concerns, work-life balance and the desire for more wholesome pursuits than binge-drinking may curb the âGanbei!â toasting culture [heavy drinking] on which so much of the demand for Moutai rests. For the time being, though, the party goes on.
RC Line-wise Explanation
Paragraph 1
"Moutai has been the global booze sensation of the decade."
Explanation: Moutai has become one of the most talked-about and successful alcoholic drinks in recent years.
"A bottle of its Flying Fairy which sold in the 1980s for the equivalent of a dollar now retails for $400."
Explanation: The price of Moutaiâs Flying Fairy liquor has increased dramaticallyâfrom just $1 in the 1980s to $400 today.
"Moutaiâs listed shares have soared by almost 600% in the past five years, outpacing the likes of Amazon."
Explanation: The value of Moutaiâs stock has risen about sixfold in five years, even outperforming major global companies like Amazon.
Paragraph 2
"It does this while disregarding every Western marketing mantra."
Explanation: Moutaiâs success goes against the typical strategies promoted in Western marketing.
"It is not global, has meager digital sales and does not appeal to millennials."
Explanation: Moutai does not sell widely outside China, has limited online presence, and is not particularly popular among young consumers.
"It scores pitifully on environmental, social and governance measures."
Explanation: According to ESG standards, Moutai performs very poorly.
"In the Boy Scout world of Western business it would leave a bad taste, in more ways than one."
Explanation: In Western corporate circles that value ethics and responsibility, Moutai would not be seen favorably.
Paragraph 3
"Moutai owes its intoxicating success to three factorsânot all of them easy to emulate."
Explanation: There are three main reasons for Moutaiâs exceptional performance, though others may struggle to copy them.
"First, it profits from Chinese nationalism."
Explanation: One key reason is that Moutai benefits from patriotic feelings among Chinese consumers.
"Moutai is known as the ânational liquorâ."
Explanation: It is regarded as Chinaâs official or representative alcoholic drink.
"It was used to raise spirits and disinfect wounds in Maoâs Long March."
Explanation: Moutai was even used in Chinaâs historic communist revolution, adding to its symbolic value.
"It was Premier Zhou Enlaiâs favourite tipple, shared with Richard Nixon in 1972."
Explanation: The drink has a history of being served in high-level diplomatic contexts, like the meeting between Zhou Enlai and U.S. President Nixon.
"Its centuries-old craftsmanshipâit is distilled eight times and stored for years in earthenware jarsâis a source of national pride."
Explanation: The traditional method of making Moutai, involving multiple distillations and long aging, adds to its prestige in China.
"It also claims to be hangover-proof, which would make it an invention to rival gunpowder...."
Explanation: Moutai even markets itself as not causing hangovers, a boast that makes it seem like a groundbreaking Chinese innovation.
Paragraph 4
"Second, it chose to serve Chinaâs super-rich rather than its middle class."
Explanation: Moutai targets wealthy Chinese consumers instead of the broader population.
"Markets are littered with the corpses of firms that could not compete in the cut-throat battle for Chinese middle-class wallets."
Explanation: Many companies fail when they try to win over Chinaâs competitive middle-class market.
"And the country's premium market is massiveâat 73m-strong, bigger than the population of France, notes Euan McLeish of Bernstein, an investment firm, and still less crowded with prestige brands than advanced economies."
Explanation: China has around 73 million affluent consumers, more than Franceâs population, and this segment still has room for premium brands.
"Moutai is to these well-heeled drinkers what vintage champagne is to the rest of the world....."
Explanation: Among Chinaâs rich, Moutai holds the same elite status that champagne has globally.
Paragraph 5
"Third, Moutai looks beyond affluent millennials and digital natives."
Explanation: Moutai doesnât focus just on young, tech-savvy consumers.
"The elderly and the middle-aged, it found, can be just as lucrative."
Explanation: Older people also spend a lot and are valuable customers.
"Its biggest market now is (male) drinkers in their mid-30s."
Explanation: Most of its customers are men in their 30s.
"Many have no siblings, thanks to four decades of Chinaâs one-child policyâwhich also means their elderly parents can splash out on weddings and banquets."
Explanation: Due to the one-child policy, these men often have parents who spend generously on family events, increasing Moutaiâs sales.
"Moutai is often a guest of honour."
Explanation: The drink is frequently featured at important events and celebrations.
Paragraph 6
"Moutai has succeeded thanks to nationalism, elitism and ageism, in other wordsânot in spite of this unholy trinity."
Explanation: Moutaiâs success comes from these three controversial strategiesâplaying to national pride, targeting the elite, and focusing on older consumers.
"But it faces risks."
Explanation: However, the company is not without challenges.
"The government is its largest shareholderâand a meddle someone."
Explanation: The Chinese government owns much of the company and tends to interfere.
"It appears to want prices to remain stable."
Explanation: The government seems to prefer price stability over profit maximization.
"Exorbitantly priced booze is at odds with its professed socialist ideals."
Explanation: Expensive alcohol contradicts the government's socialist values.
"Yet minority investorsâincluding many foreign fundsâlament that Moutaiâs wholesale price is a third of what it sells for in shops."
Explanation: Some investors complain that Moutai sells cheaply to wholesalers, who then make huge profits.
"Raising it could boost the companyâs profits further."
Explanation: If Moutai increased wholesale prices, its own profits would improve.
"Instead, in what some see as a travesty of corporate governance, its majority owner has plans to set up its own sales channel....."
Explanation: Critics argue itâs bad governance for the government to create its own sales route, possibly cutting out other retailers.
Paragraph 7
"In the long run, its biggest risk may be millennials."
Explanation: Younger generations might be Moutaiâs greatest future threat.
"As they grow older, health concerns, work-life balance and the desire for more wholesome pursuits than binge-drinking may curb the âGanbei!â toasting culture [heavy drinking] on which so much of the demand for Moutai rests."
Explanation: Millennials may avoid heavy drinking due to changing lifestyles, reducing demand for Moutai.
"For the time being, though, the party goes on."
Explanation: Currently, despite future risks, Moutaiâs success continues.
RC Paragraph Explanation
Paragraph 1 Summary
Moutai has become a standout in the alcohol industry, with its prices and stock soaring dramaticallyâoutpacing even global giants like Amazon.
Paragraph 2 Summary
Unlike Western firms, Moutai ignores digital trends and ESG concerns but still thrives, challenging modern business conventions.
Paragraph 3 Summary
One reason for Moutai's success is its deep connection to Chinese nationalism and history, making it a symbol of pride and tradition.
Paragraph 4 Summary
By targeting the wealthy elite instead of the competitive middle class, Moutai taps into a premium market with less brand saturation.
Paragraph 5 Summary
Moutai smartly focuses on older and middle-aged consumers, especially single-child families where parents lavishly spend on celebrations.
Paragraph 6 Summary
Though successful, Moutai faces issues like government interference, pricing conflicts, and questionable corporate governance practices.
Paragraph 7 Summary
The long-term threat to Moutai may be changing cultural habits among millennials who are less inclined toward heavy drinking.
RC Quick Table Summary
| Paragraph Number | Main Idea |
|---|---|
| Paragraph 1 | Moutai's prices and shares have skyrocketed, making it a standout success. |
| Paragraph 2 | It thrives despite defying modern business practices like ESG and digital appeal. |
| Paragraph 3 | Nationalist sentiment and historical pride boost Moutaiâs brand. |
| Paragraph 4 | Moutai profits by focusing on Chinaâs wealthy elite rather than the masses. |
| Paragraph 5 | Its success also comes from appealing to older, affluent consumers. |
| Paragraph 6 | The company faces governance challenges and interference from its main ownerâthe state. |
| Paragraph 7 | Changing values among millennials may threaten future demand. |
RC Questions
Ques 5. The phrase âwould make it an invention to rival gunpowderâ has been used in the passage in a sense that is
Detailed explanation by Wordpandit: The phrase âwould make it an invention to rival gunpowderâ is used to highlight the cultural and symbolic significance of Moutaiâs claimed hangover-proof quality. Gunpowder, a historic Chinese invention, represents something with transformative global impact. The author uses this comparison not to state a literal or factual equivalence, but to emphasize how remarkable Moutaiâs claim would be if trueâa product so revolutionary in social terms that it could stand beside gunpowder in symbolic value. This comparison is clearly figurative, expressing the potential importance of the liquor in a humorous and exaggerated way. The intent is to evoke an image, not make a scientific or factual assertion.
Option-wise Analysis
Option A (Literal): The statement is not meant to be taken literally. Moutai is not being presented as an actual invention comparable in function or form to gunpowder.
Option B (Substantive): While the idea of being hangover-proof may sound like a substantial claim, the comparison to gunpowder is not grounded in physical or factual characteristicsâit is symbolic.
Option C (Metaphorical): The phrase is a metaphorical device, using the image of gunpowder to suggest the potential cultural impact of Moutai, should its claims hold true.
Option D (Synonymical): The sentence does not treat Moutai and gunpowder as synonyms or interchangeable terms. It draws a figurative comparison, not an equivalence.
Ques 6.Which one of the following is both a reason for Moutaiâs success as well as a possible threat to that success?
Detailed explanation by Wordpandit: To find the correct answer, we need to identify a factor that is currently contributing to Moutaiâs success, but is also highlighted as a potential long-term risk. The passage makes this duality explicit in its discussion of Moutaiâs appeal to older and middle-aged consumers, particularly male drinkers in their mid-30s and older, whose purchasing power is supported by family structure and cultural traditions. This consumer base has helped establish Moutai as a luxury symbol at weddings, banquets, and traditional gatherings. However, the passage also warns that this age-based advantage may not last. As millennialsâwho are more focused on health, wellness, and work-life balanceâage into the core consumption demographic, their preferences may diverge sharply from the heavy-drinking âGanbei!â culture that currently fuels Moutaiâs sales. This shift in lifestyle could significantly reduce future demand.
Option-wise Analysis
Option A (Chinese love of liquor-filled celebration): This supports Moutaiâs popularity but is not flagged as a risk. The text doesnât suggest that this cultural practice is declining or under threat.
Option B (Government involvement in its business): This is described primarily as a constraint or governance issue, not as something that contributes to success. It's framed as interference, not a dual factor.
Option C (Its appeal to the rich): A major driver of current success, but the passage does not indicate that this elite appeal is under threat or likely to decline, so it doesn't meet both criteria.
Option D (Its appeal to the older age group): Correct. It is clearly described as both a current advantage and a future vulnerability, making it the only option that satisfies both sides of the question.
Ques 7. In the context of the passage, it is most likely that the author refers to Moutaiâs marketing strategy as âthe unholy trinityâ because
Detailed explanation by Wordpandit: The phrase âunholy trinityâ is used in the passage to describe the three unconventional pillars of Moutaiâs success: nationalism, elitism, and ageism. These traits are typically frowned upon in modern Western marketing, which emphasizes inclusivity, youth appeal, global reach, environmental consciousness, and digital innovation. The author deliberately contrasts Moutaiâs approach with these Western ideals, pointing out that it has succeeded despite going against them. By calling it an âunholy trinity,â the author is not suggesting that Moutaiâs strategy is evil, but rather that it violates the norms of the Western business playbook. The tone suggests ironyâthe very things Western marketers avoid are the very things that have made Moutai wildly successful in China.
Option-wise Analysis
Option A: Incorrect. The authorâs critique is not about the morality of liquor marketing in general. The term "unholy" is not used to moralize but to highlight contrast with accepted norms.
Option B: Incorrect. While nationalism is one part of the strategy, the phrase refers to the combination of three elements, not nationalism alone.
Option C: Correct. This directly addresses the contrast the author draws between Moutaiâs success formula and Western marketing conventions. The âunholy trinityâ stands in opposition to what Western marketers typically embrace.
Option D: Incorrect. While long-term risks are mentioned, the phrase âunholy trinityâ refers specifically to the current marketing strategyânot its future consequences.
Ques 8. In the context of the passage we can infer that to succeed in the liquor industry inChina, a marketing firm must consider all of the following factors affecting the Chineseliquor market EXCEPT that
Detailed explanation by Wordpandit: To succeed in the Chinese liquor market, a marketing firm must understand the landscape described in the passage. The author outlines Moutaiâs strategy, which deliberately avoids traditional Western marketing tactics and chooses not to compete for the middle-class segment, considering it too saturated and difficult. Instead, Moutai targets the super-rich, benefits from nationalist sentiment, and focuses on older demographics. These strategies are framed as deliberate and crucial to Moutaiâs success. The passage makes it clear that marketing to the middle class is not recommended due to high competition. It states, âMarkets are littered with the corpses of firms that could not compete in the cut-throat battle for Chinese middle-class wallets.â Therefore, the idea that there's easy money to be made by targeting the middle class is inconsistent with the passageâs argument.
Option-wise Analysis
Option A: Correct. This is the exception. The passage explicitly discourages marketing to the middle class due to high competition, indicating that this strategy is not advisable in the Chinese liquor market.
Option B: Incorrect. The government is described as Moutaiâs largest shareholder and is portrayed as a price-controlling and interventionist force, which makes it a relevant factor for firms to consider.
Option C: Incorrect. The author notes that the premium liquor market in China is still underdeveloped compared to advanced economies, meaning there is less competition and room for growthâa key opportunity for marketers.
Option D: Incorrect. The passage clearly mentions the intense competition in the middle-class segment, making it an important factor to account for when planning any market strategy. â
