The underlying logic of the alcohol industry rewritten! Only doing wholesale to make a profit margin is doomed to fail? Qin Shuyao, President of the China Alcohol Circulation Association, latest statement: Distribution companies must "rebirth"

By The Daily Economic News reporter | Wen Menghua, Xiong Jianning | Editor of The Daily Economic News | Xiao Ruidong

“The essence of this round of adjustments in the baijiu industry is a systemic remaking centered on ‘consumers.’ 2026 is the year the spirits industry breaks through on the ‘C’ side. But going for C doesn’t mean bypassing B or eliminating B; instead, it means manufacturers and sellers work together to go after C.” On March 26, Qin Shuyao, president of the China Alcoholic Beverages Circulation Association, said at the 2026 Liquor Industry Innovation Think-Share Event hosted by The Daily Economic News.

At present, amid the interplay of multiple factors such as macroeconomic cycles and industrial differentiation, China’s liquor industry is undergoing profound change. As the industry shifts from the past era of volume-driven growth to growth driven by structure, and from extensive development to refined operations, the core logic of industry transformation has been thoroughly rebuilt. With the arrival of an era of consumer sovereignty, the competitive logic that used to be “channels are king” has long shifted to “consumer-centered.” When “comprehensive breakthrough on C” becomes a shared industry consensus, how to connect the “last mile” directly to the C-end becomes a common challenge for major liquor companies.

So, when the dividend from extensive growth has completely faded, how should the industry build a brand-new growth system and find new growth breakthroughs? How can liquor companies truly implement their strategic plans to go fully to C? Will circulation companies be replaced?

After years of deep cultivation in the industry, this is not the first time Qin Shuyao has experienced an adjustment cycle in the baijiu industry. Looking back at previous baijiu industry adjustment periods, Qin Shuyao feels deeply and has敏 sharp insight into the fact that the industry’s “center of gravity” is moving closer and closer to consumers.

“In 1989, it shifted from planning to the market; in 1998, marketing sank; in 2012, consumption transformation oriented toward real demand; and in this latest adjustment, consumers are king, fully going for C.” Qin Shuyao told reporters from The Daily Economic News · Jiang Jin Jiu. Since 2023, the combination of three forces—external economic fluctuations, accumulation of contradictions earlier in the liquor industry, and iterative changes in consumption—means that the liquor industry can only complete systemic remaking and transformation by centering on consumers, so as to ignite new momentum and open up new growth.

The leap from “channels are king” to “consumer sovereignty” is not only something many liquor companies, distributors, and practitioners within the industry are keenly aware of; the consumption data and consumption profiles reflected by the market also confirm this trend.

Compared with the previous stage of the liquor industry cycle, today’s consumer base has undergone significant changes. In terms of age structure, from 2020 to 2024, the number of eligible drinking men aged 35 to 55 decreased by 28 million. Post-80s and post-90s men have become the main force in alcohol consumption, while post-00s have also gradually entered the eligible age group for alcohol consumption. In terms of gender, women currently enrolled in higher education institutions account for 50%. This will affect their future employment and income, and will promote women to become a more important force in alcohol consumption.

Another side of consumer-group innovation is the disruption of more diversified, more personalized, and more fun and interesting ways of consuming, driven by the sudden boom of instant retail and social-media short-video content.

Qin Shuyao shared a set of data: In 2025, the market size of instant retail for alcohol already exceeded 50 billion yuan, and it is expected to keep expanding over the next few years at an ultra-high compound growth rate of around 50%; on the Xiaohongshu platform, alcohol-related content has seen double-digit growth for five consecutive years; on the Bilibili platform, there are 80 million pan-alcohol interest users, and the growth rate of baijiu interest users is 2 times that of pan-alcohol users—young people are especially into content such as baijiu culture and mixology playbooks.

All kinds of signs point to one thing: the underlying logic of China’s liquor industry is being rewritten entirely. “Every time the liquor industry takes a big step closer to consumers, it will generate new growth driving forces and create new, iconic, and leading brands. The closer it is to consumers, the stronger the momentum for industry development, and the more obvious the brand competitive advantages.” In Qin Shuyao’s view, syncing up with consumers in pace, position, and presence is the inevitable choice for the industry’s high-quality future development.

Facing the new wave of industry adjustment, liquor companies also try to make changes, so they won’t be left behind by the industry’s era-moving train. Since 2025, the liquor industry’s momentum toward C has been strong, with liquor companies taking many actions and with substantial efforts.

For example, Yanghe has released and is vigorously promoting “Yanghe Daqu High-Line Light-Bottle,” while Shede expands the promotion力度 for Tuo Pai’s “T68” to broaden product coverage on the C side; “Dajiangpu” is opening up a segmented incremental market, and well-known brands such as Gujing Gong, Kouzi Jiu, and Sichuan Wine Group, as well as major regional liquor brands, have all entered the fray and increased investment; from the beginning of the year to now, more than 2 million users have successfully purchased liquor on iMaotai; Langjiu has achieved a transformation through organizational changes—from “facing distributors” to “directly facing consumers”; Meituan Flash Purchase saw 70% business growth in 2025, and growth of new customers for platform alcohol drinks reached 20%; Wuliangye has co-branded with the national animation “The Legend of Immortal Cultivation” (Fanren Xiu Xian Zhuan) and Jiannanchun has co-branded with “Sword Comes” (Jian Lai), leveraging cross-industry efforts to break boundaries within the industry.

“Currently, China’s liquor industry is undergoing a comprehensive breakthrough toward C, with full-scale changes across areas including brands, products, terminals, and channels. This trend will continue to expand and deepen in 2026.” Qin Shuyao predicted.

For a long time, in the liquor industry ecosystem, liquor circulation is the “touchpoint” that links and reaches consumers. It involves more than 12 million circulation entities and affects more than 36 million practitioners. When the liquor industry goes fully to C, what will happen to distributors?

“It’s not that you can’t last, but you can’t outlast it!” In Qin Shuyao’s view, transformation and innovation by liquor circulation companies is the watershed of this round of adjustment. In previous rounds of industry adjustment, the focus was mainly on liquor companies’ adjustments. In this round, liquor circulation companies must “be reborn,” otherwise it will be difficult to influence the C-end, and it will also be hard to achieve true breakthroughs.

“Going closer to the C-end (consumers) doesn’t mean bypassing the B-end (distributors). It’s also not about eliminating the B-end; instead, it’s about pushing manufacturers and sellers to unite and work together to focus on the C-end.” Qin Shuyao emphasized that today, more than ever, high-quality channel partners are needed, and the value of circulation has never been as important and critical as it is today.

Many liquor companies have already started moving. For instance, some adopt a “direct sales + traditional distributors” “B+C” model. In this process, distributors that lack the ability to operate consumers and run terminal stores will be eliminated. The remaining “B” will be distributors that can work with liquor factories to jointly serve the C-end.

Last year, the “Ten Thousand Merchants Alliance” model launched by Zhenjiu-Liduo is another approach: it directly operates a number of small B (small terminals). The core of this model is to remove intermediaries and make the structure flat directly from manufacturers supplying thousands or even tens of thousands of small terminals. It greatly lowers the procurement threshold for small merchants, enabling many tobacco-and-alcohol stores and small shops to build connections directly with manufacturers.

Therefore, no matter which method is used, traditional channels such as distributors still need to be included.

In the liquor industry ecosystem, “circulation” is the key linking unit—it is a strong force for connection and interaction with consumers. “They don’t just distribute products; they also convey brand propositions, provide consumer services, reflect market trends, and drive industry development.” Qin Shuyao said. In today’s environment of transformation and innovation, the value of liquor circulation will not decline—instead, it will become increasingly prominent. Going to C for the liquor industry isn’t only about products going to C; it’s also about value going to C. In the liquor industry’s move toward C, more than ever, high-quality channel partners are needed. The value of circulation has never been as important and critical as it is today.

“If you only know how to do wholesale and can only earn the spread, you’ll be eliminated.” When talking with reporters from The Daily Economic News · Jiang Jin Jiu, Qin Shuyao of the China Alcoholic Beverages Circulation Association said this judgment directly. The key to whether one gets eliminated lies in role transformation.

In the past, alcohol traders guarded tobacco-and-alcohol stores and waited for customers to come, selling passively. Terminal merchants and consumers would stock up and store alcohol. But now, the “stationary merchant winning” model—where traditional reliance on information asymmetry and waiting for customers to come is enough—no longer exists. Brand promotion and communication mainly rely on the top-level investment of liquor companies: high-altitude advertising and billboard campaigns, winning on “volume.”

Now, facing consumers who place orders anytime and purchase based on emotion, alcohol traders need to take the initiative—open stores online, open them in private domains, and open them within communities. They should do instant response and instant service: multiple-frequency, personalized supply and sales, make good use of data, tell good stories, and create a better alcohol-purchasing experience for customers.

“Distributors need to deeply bind themselves with liquor factories, not just be pure participants in interest games.” To this end, the China Alcoholic Beverages Circulation Association has launched the “Navigator Program” and the “Future Partner Program,” actively helping distributors innovate and develop.

Qin Shuyao believes that going forward, there are two types of distributors with stronger survival ability. One type is large distributors: they not only need to have the ability to operate on the C-end themselves, but more importantly, they must be able to organize, train, and serve numerous small Bs (such as tobacco-and-alcohol stores), taking on part of the channel management functions that used to be handled by manufacturers. Another type is valuable small Bs: they face consumers directly and build private-domain traffic through refined services.

“Wherever consumers are, the liquor industry is there; whoever the consumers are, the liquor industry is them.” When discussing how to connect the “last mile” in the liquor industry’s move toward C, Qin Shuyao believes that new technologies and tools, represented by AI, will inevitably become the core engine for the industry’s transformation and growth—reconstructing decision logic and service methods in the circulation link based on data and using intelligence as the means, pushing enterprises to upgrade from traditional trading firms to modern circulation service providers driven by data, leading in services, and optimized for efficiency.

At the core thinking level, AI is not just flashy tech; it is a fundamental capability for the liquor industry to shift from an experience-driven mode to a data-intelligence-driven mode, bringing a qualitative change that reduces costs, improves efficiency, enables precision, and delivers more close-to-the-customer service.

For example, with AI-enabled big data analytics, the liquor industry is achieving deep “decoding” of consumers—so that product selection and marketing change from “choosing based on hunches” to “precise decision-making.” By empowering intelligent inventory and dynamic replenishment, AI solves old circulation problems such as channel overstocking, out-of-stock situations, and low-efficiency logistics. At the same time, AI will also become an “amplifier” for content and ad placement, lowering the threshold for brand communication. With AI, 7×24-hour intelligent responses and personalized recommendations can be achieved, upgrading service from “passive response” to “active companionship.”

Cover image source: Daily Economic News media resource library

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