Qin Shuyao, President of the China Alcohol Circulation Association: Distribution companies must be reborn

“The essence of this round of adjustments in the liquor industry is a systematic re-creation centered on consumers. 2026 will be the breakthrough year for the liquor industry to crack the path toward the C side (consumers). However, moving toward the C side does not mean bypassing the B side (distributors) or eliminating the B side. Instead, it means manufacturers working together to go after the C side.” On March 26, Qin Shuyao, president of the China Alcoholic Beverages Circulation Association, said at a 2026 liquor industry innovation think-salon hosted by The Economic Daily News.

The Economic Daily News Media Library, photo by Zhang Jian

At present, amid the interplay of multiple factors such as macroeconomic cycles and industrial divergence, China’s liquor industry is undergoing profound change. As the industry shifts from the previous era of volume-driven growth to structural growth, and from extensive development to refined operations, the core logic behind industry transformation has been thoroughly rebuilt. The arrival of the era of consumer sovereignty has long shifted the old competitive logic of “channels are king” to a “consumer-centered” approach. When “going all-in on the C side” becomes a shared industry consensus, how to connect the “last mile” directly reaching consumers has become a common question for major liquor companies.

So, when the dividends from extensive growth have fully faded, how should the industry build an entirely new growth system and find new growth breakthroughs? How can liquor companies truly implement a comprehensive C-side strategic layout? Will circulation companies be replaced?

Put the focus closer and closer to consumers

Having worked deeply in the industry for many years, this is not the first time Qin Shuyao has experienced an adjustment period in the baijiu industry. Looking back at past adjustment periods in the baijiu industry, Qin Shuyao felt strongly and keenly sensed that the industry’s focus is moving closer and closer to consumers.

“From planned allocation to the market in 1989, the 1998 marketing push downward, the 2012 consumption transformation guided by real demand, and then the consumers-for-king in this round of adjustments—this is the process of going fully toward the C side.” Qin Shuyao told reporters from The Economic Daily News · Jiāng Jìn Jiǔ, that since 2023, with the combined effect of three factors—external economic fluctuations, accumulated contradictions in the early stages of the liquor industry, and iterative consumption changes—only by keeping consumers at the core and completing systematic re-creation and transformation can the industry unleash new momentum and open up new growth.

The leap from “channels are king” to “consumer sovereignty” is something that many liquor companies, distributors, and practitioners within the industry have felt deeply. A series of consumption data and consumer profiles reflected by the market also confirm this trend.

Compared with the previous liquor industry cycle, the current consumer group has undergone significant changes. In terms of age structure, from 2020 to 2024, the number of eligible male drinkers aged 35 to 55 decreased by 28 million. The two hundred million “post-80s” and “post-90s” men have become the main consumer group for liquor, and “post-00s” is also gradually entering the eligible age group for liquor consumption. In terms of gender, the share of women in higher education while studying is 50%; together with the impact this has on their future employment, income, and so on, women may become an even more important force in liquor consumption.

Another side of the change in consumer groups is the explosion of instant retail and more diverse, more personalized, more fun and interesting consumption modes brought by short videos such as “content that drives interest” (seeded recommendations).

Qin Shuyao shared a set of data: In 2025, the market size for instant liquor retail already exceeded 50 billion yuan. It is expected that in the coming years the market will keep expanding at a very high compound growth rate of around 50%; content on liquor on the Xiaohongshu platform has grown at double-digit rates for five consecutive years; on the Bilibili platform there are 80 million broad-interest users in liquor-related topics, and the growth rate of baijiu interest groups is twice that of broad liquor-related interests. Young people are keen on content about baijiu culture and mixology experiences, among others.

All these signs indicate that—China’s liquor industry’s underlying logic is being completely rewritten. “Each time the liquor industry takes a big step toward consumers, it will generate new growth drivers and produce new landmark, leading brands. The closer it gets to consumers, the stronger the development momentum of the liquor industry, and the more pronounced its brand competitive advantages become.” In Qin Shuyao’s view, staying in sync with, positioned alongside, and present with consumers is an inevitable choice for the industry’s future high-quality development.

Facing the new wave of industry adjustment, liquor companies are also trying to make changes so they are not left behind by the times. Since 2025, the liquor industry has shown strong momentum toward the C side, with many moves and significant efforts from liquor companies.

For example, Yanghe released and is strongly promoting “Yanghe Dàqū High-Line High-Transparency Clear-Bottle” (Yanghe Daqü Gao Xian Guang Ping). Shede is increasing the scale of its promotion of T68 for Tuo Pai and expanding the product’s C-side coverage; “Da Jiu Pu” opens up incremental markets in subdivisions, and well-known liquor brands such as Gujinggong, Kouzi Jiu, and Chuan wine group, as well as mainstream provincial-liquor brands, have all entered and stepped up efforts. From the beginning of the year to now, more than 2 million users have successfully purchased liquor through “iMaotai.” Langjiu has achieved a shift through organizational transformation—from “facing distributors” to “directly facing consumers.” Meituan Flash Purchase saw 70% growth in 2025 business, while growth of new customers for alcohol and drinks on the platform reached 20%. Wuliangye, in collaboration with the national popular animation “Tales of Immortal Cultivation of a Mortal World,” and Jìannánchūn, in collaboration with “Sword Comes,” are leveraging cross-industry partnerships to break through industry boundaries.

“Currently, China’s liquor industry is going through a comprehensive breakthrough toward the C side, with full-scale transformations across brands, products, terminals, channels, and more. This trend will continue to expand and deepen in 2026.” Qin Shuyao predicted.

For the liquor industry’s “toward the C side,” high-quality channel partners are even more needed

For a long time, in the liquor industry ecosystem chain, the alcoholic beverages circulation sector is a “touchpoint” that links the liquor industry and reaches consumers. It is connected to more than 12 million circulation entities and involves more than 36 million practitioners. When the liquor industry moves fully toward the C side, where do distributors go from here?

“Can’t be outlasted by just struggling through.” In Qin Shuyao’s view, the transformation and innovation of alcoholic beverages circulation companies is the watershed of this round of adjustments. In previous rounds, industry adjustments mainly relied on liquor companies changing. In this round, alcoholic beverages circulation companies must “be reborn”; otherwise, it will be difficult to influence the C side and impossible to achieve real breakthroughs.

“Moving closer to the C side does not mean bypassing the B side. It’s also not about eliminating the B side. Instead, it is about promoting cooperation between manufacturers and distributors, so they can jointly exert efforts toward the C side.” Qin Shuyao emphasized that today, more than ever, high-quality channel partners are needed. The value of circulation has never been as important and critical as it is today.

Many liquor companies have already started moving. For example, some liquor companies adopt a “direct sales + traditional distributors” “B+C” model. In this process, distributors that do not have consumer operation capabilities or the ability to operate terminal shops will be eliminated. The remaining “B” will be distributors that can work together with the distilleries to jointly serve the C side.

Last year, the “Ten Thousand Merchants Alliance” model launched by Zhenjiu Lidun is another approach: directly operating several small Bs (small terminals). The core of this model is to remove intermediaries, flattening the process directly so that manufacturers supply directly to thousands, even tens of thousands of small terminals. It greatly lowers the stocking threshold for small merchants, enabling many cigarette-and-alcohol shops and small stores to establish direct connections with manufacturers.

Therefore, regardless of which approach, there will still be the participation of distributors and other traditional channel players.

In the liquor industry ecosystem chain, “circulation” is a key link connecting the past and the future. It is a powerful force for connecting and interacting with consumers. “They not only distribute products, but also convey brand propositions, carry out consumer services, reflect market trends, and drive industry development.” Qin Shuyao said. In the current environment of transformation and innovation, the value of liquor industry circulation will not decline; instead, it will become increasingly prominent. Going toward the C side in the liquor industry is not only products going toward the C side—it is value going toward the C side.

The “shop-owner wins without effort” model is gone for good

“If you only know how to do wholesale and can only make money from the margin difference, you will be eliminated.” Qin Shuyao said this plainly when communicating with reporters from The Economic Daily News · Jiāng Jìn Jiǔ. The key to whether one gets eliminated lies in role transformation.

In the past, liquor merchants would guard cigarette-and-alcohol shops and wait for customers to come by for passive sales; terminal merchants and consumers would stock up and store liquor. Brand promotion and communication mainly depended on the liquor companies’ top-tier placements—high-altitude ads and billboards—winning through “volume.” But now, the “shop-owner wins without effort” model of waiting for customers to come is no longer coming back.

Now, facing consumers who can place orders at any time and who buy driven by emotion, liquor merchants need to take the initiative—open their stores online, open them in private domains, and open them within communities. They need to provide instant response and instant services, and do multi-frequency, personalized supply and sales. They must make good use of data, and tell good stories, to create a better and more premium liquor-buying experience for customers.

“Distributors need to deeply bind themselves with distilleries, rather than engaging in a simple game of interests.” To this end, the China Alcoholic Beverages Circulation Association has launched the “Pioneer Program” and the “Future Partner Program,” actively helping liquor distributors’ innovative development.

In Qin Shuyao’s view, in the future, two types of distributors will be more capable of survival. One type is large distributors: they not only need to have C-side operation capabilities themselves, but more importantly must be able to organize, train, and serve many small Bs (such as cigarette-and-alcohol shops), taking on part of the channel management functions that were previously carried out by manufacturers. The other type is valuable small Bs: they face consumers directly and build private-domain traffic through refined services.

“Where consumers are, the liquor industry is; whoever consumers are, the liquor industry is who they are.” When discussing how the liquor industry can connect the “last mile” toward the C side, Qin Shuyao believes that new technologies and new tools represented by AI (artificial intelligence) will inevitably become the core engine for the liquor industry’s transformation and growth—using data as the foundation and intelligence as the means, reconstructing the decision logic and service methods of the circulation link, and upgrading enterprises from traditional trading merchants to modern circulation service providers that are data-driven, service-leading, and optimized for efficiency.

In terms of core thinking, AI is not about showy tech; it is the underlying capability that enables the liquor industry to move from being driven by experience to being driven by data intelligence. This brings a qualitative shift that reduces costs, increases efficiency, enables precision, and provides more tailored, close-to-the-customer service.

For example, by leveraging AI big data analysis, the liquor industry is achieving deep “decoding” of consumers, turning product selection and marketing from “guesswork” into “precise decision-making.” With AI enabling intelligent inventory and dynamic replenishment, it addresses old circulation problems such as channel overstocking, stockouts, and inefficient logistics. At the same time, AI will also become an “amplifier” for content and placements, lowering the threshold for brand communication. With AI enabling 7×24-hour intelligent responses and personalized recommendations, it upgrades service from “passive response” to “active companionship.”

The Economic Daily News