BUSINESS

In Depth: China’s Baijiu Giants Rethink Growth as Earnings Pressure Mounts

Published: Apr. 10, 2026 7:01 p.m. GMT+8

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China’s “baijiu” industry is entering a more challenging phase, with slowing demand, falling prices and a shortening sales cycle forcing even top distillers to overhaul their strategies to sustain earnings growth.

The shift was on display in late March at a preview event ahead of the China Food & Drinks Fair in Chengdu, long a key venue for dealmaking between producers, distributors and buyers. This year, however, attendance by major brands was thinner, and those present reported weak footfall and sluggish orders despite steep discounts.

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China's baijiu industry sees slowing shipments, falling prices (Feitian Moutai from 2100 to 1495 yuan), weak trade fair sales.
Moutai reforms: iMoutai direct sales (14M new users Q1), consignment system, price rise to 1539 yuan.
Strategies target youth, instant retail (36B yuan 2024 to 100B by 2027); overseas sales limited to diaspora.

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Explore the story in 3 minutes

1. China's baijiu industry faces a challenging phase marked by slowing demand, falling prices, and a shortening sales cycle, prompting top distillers to overhaul strategies for earnings growth [para. 1].

2. At a late March preview for the China Food & Drinks Fair in Chengdu, major brand attendance was thin, with weak footfall and sluggish orders despite discounts [para. 2].

3. An exhibitor noted poor business attraction and sales, with merchants unable to clear inventory even at reduced prices [para. 3].

4. The subdued event reflects structural shifts: declining role of offline dealmaking due to digital channels and weakening demand outside top-tier baijiu [para. 4].

5. A China Merchants Securities survey showed slowed shipments before Spring Festival, with top firms like Kweichow Moutai (600519.SH) and Wuliangye (000858.SZ) outperforming, but second-tier brands under pressure, indicating sector polarization [para. 5].

6. The sales season has narrowed to about one month around Lunar New Year, down from several months a decade ago [para. 6].

7. Feitian Moutai's wholesale price dropped from ~2,100 yuan ($307) at 2025 start to 1,495 yuan in December, per Jinri Jiujia data [para. 8].

8. Guosen Securities attributes declines to weak high-end demand, reduced investment buying, and a government crackdown on officials' drinking, exposing distributor model flaws [para. 9].

9. Since October, Moutai Chairman Chen Hua implemented reforms: direct iMoutai sales of Feitian Moutai at fixed prices in January [para. 10][para. 11].

10. The iMoutai launch added 14 million users in Q1, addressing dual-track pricing premiums [para. 12].

11. March consignment system for non-standard products eases distributor risk and bundling; late March retail price hike to 1,539 yuan (first in 8 years) could add 2 billion yuan net profit in 2026 [para. 13][para. 14].

12. Reforms aim to restore pricing control amid insufficient demand for traditional premiums [para. 15].

13. Traditional demand from banquets and officials eroded by restrictions and habits; firms target younger drinkers favoring low-alcohol options [para. 19][para. 20][para. 21].

14. Luzhou Laojiao (000568.SZ) promotes low-proof and cocktails; others like Shanxi Fenjiu (600809.SH) and Yanghe (002304.SZ) focus on redesign and youth marketing [para. 22][para. 23].

15. Shift overdue per startup founder Zhao Xiaopu; legacy brands face hurdles, but newcomers have flexibility [para. 24][para. 25].

16. Overseas growth limited: sales mostly to Chinese diaspora via bulk, restaurants [para. 28][para. 29].

17. Baijiu's strong flavor, high alcohol, price hinder appeal vs. whisky, soju; needs adaptations like low-alcohol variants [para. 30][para. 32].

18. Domestically, instant retail push: Wuliangye partners Meituan/JD; Luzhou Laojiao offers 1-hour Douyin delivery; market from 36 billion yuan (2024) to 100 billion by 2027 [para. 34][para. 35][para. 36].

19. Instant retail aids convenience but risks price transparency, conflicts, fakes; platforms like Meituan tighten controls [para. 37][para. 38].

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Who’s Who

China Merchants Securities Co. Ltd.: China Merchants Securities Co. Ltd. surveyed baijiu sales ahead of Spring Festival, finding slowed shipments and reduced targets. They estimated Moutai's Feitian retail price hike (to 1,539 yuan) could add ~2 billion yuan in net profit for 2026.

Kweichow Moutai Co. Ltd.: Kweichow Moutai Co. Ltd. (600519.SH), China's top baijiu maker, saw slowed shipments and Feitian Moutai wholesale prices drop from 2,100 yuan to 1,495 yuan. Chairman Chen Hua's reforms include direct iMoutai sales (14M new users in Q1), consignment for non-standard products, and a 40-yuan price hike to 1,539 yuan retail.

Wuliangye Yibin Co. Ltd.: Wuliangye Yibin Co. Ltd. (000858.SZ), a leading baijiu distiller, continues to outperform smaller rivals amid slowing shipments and demand. In March, it plans to deepen e-commerce ties and build instant delivery via Meituan and JD.com to target younger consumers.

Guosen Securities Co. Ltd.: Guosen Securities Co. Ltd. analysts attribute the decline in Feitian Moutai's wholesale price—from 2,100 yuan to 1,495 yuan—to weakening demand for high-end baijiu (especially investment products) and a government crackdown on officials' drinking, exposing flaws in the traditional distribution model.

Luzhou Laojiao Co. Ltd.: Luzhou Laojiao Co. Ltd. (000568.SZ) is targeting younger consumers with lower-proof baijiu and cocktail-style drinks, showcasing mixed beverages at the Chengdu fair for casual settings. It launched a one-hour delivery service via its Douyin store.

Shanxi Xinghuacun Fen Wine Factory Co. Ltd.: Shanxi Xinghuacun Fen Wine Factory Co. Ltd. (600809.SH) has outlined strategies focused on product redesign, branding, and marketing to target younger consumers, amid baijiu industry's slowing demand and shifting habits.

Jiangsu Yanghe Distillery Co. Ltd.: Jiangsu Yanghe Distillery Co. Ltd. (002304.SZ) has outlined strategies focused on product redesign, branding, and marketing aimed at younger generations to expand its consumer base in the evolving baijiu market.

Meituan: Meituan partners with Wuliangye for instant baijiu delivery. It has stricter merchant sourcing rules and compensation for counterfeits to ensure price discipline and brand integrity in online alcohol sales. (28 words)

JD.com: Wuliangye plans to deepen cooperation with major e-commerce platforms and build instant delivery capabilities through partners such as Meituan and JD.com.

Guotai Haitong Securities Co. Ltd.: **Guotai Haitong Securities Co. Ltd.** reported that China’s instant retail market for alcoholic beverages reached 36 billion yuan in 2024 and is projected to grow to 100 billion yuan by 2027. (28 words)

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