China’s alcoholic drinks market softened in the first half of 2025, weighed down by shrinking sales in traditional tobacco-and-liquor outlets and the ongoing slump in wine consumption.
Yet online retail, live-streaming sales, and the rising popularity of lower-alcohol beverages emerged as rare bright spots in an otherwise sluggish environment.
At the 14th China (Guizhou) International Alcoholic Beverages Expo, the China National Association for Liquor and Spirits Circulation unveiled its first Alcoholic Beverages Market Confidence Index (ACI) for January–June 2025. The index came in at 47.14—below the neutral benchmark of 50—signalling market contraction.
Tobacco-and-Liquor Stores Struggle
Standalone tobacco-and-liquor shops, traditionally reliant on sales tied to official banquets and corporate gifting, were hit hardest. Their ACI fell to just 39.19, with more than 60% reporting profit declines. Nearly a third saw earnings fall by more than 10%.
The downturn reflects reduced banqueting, where premium baijiu—especially Moutai and Wuliangye—has long been the prestige choice. Wine, however, continues to lag in this context. As Wu Yonglei, general manager of Fond Wine in Fujian province, explained:
“At business banquets, alcohol is expected to signal value. When a host brings out Moutai or Wuliangye, everyone knows the price and recognises the gesture. Wine lacks benchmark labels that carry the same weight.”
Shrinking margins, rising costs, and slow adaptation to digital retail formats have also strained these outlets. Still, some 24.7% of tobacco-and-liquor shops grew by diversifying into new categories and adopting “instant retail” models, enabling one-hour delivery.
E-Commerce and Livestreaming Lead Growth
E-commerce was the standout performer, posting an ACI of 61.89. Online alcohol sales have surged as brands expand on JD.com, Tmall, and Douyin, where livestreaming sessions hosted by influencers and celebrities attract younger consumers.
Instant delivery services through apps like Meituan and Ele.me are also booming in urban markets. For wine, however, the divide between channels is stark: online it scored 60.46, but offline—especially in banquet-driven tobacco-and-liquor shops—it sank to 31.00.
The Rise of Low-Alcohol Beverages
A key structural shift is the growing demand for lower-alcohol drinks. Beverages over 50% ABV posted the weakest performance with an ACI of 41.26, while drinks under 10% ABV, led by beer, scored highest at 59.22.
Craft beer in particular stood out, achieving a robust 67.80. Drinks in the 20–40% range, such as lighter baijiu and fruit-based spirits, edged into positive territory at 51.20. New-style alcoholic drinks—flavoured, attractively packaged, and usually around 20% ABV—are booming with younger consumers who prefer a “light buzz” to heavy drinking.
Wine’s Challenge and Opportunity
Wine remains the weakest segment overall, with an ACI of 40.38, reflecting a deep slump in both imports and revenues of major listed companies. Yet its online resilience points to opportunities if positioned away from the banquet economy and toward lifestyle consumption.
Industry experts suggest that wine must strengthen brand recognition, simplify consumer education, and connect with younger drinkers. Aligning with China’s growing low-alcohol trend could help wine shed its image as a complicated, status-driven product and reposition it as a casual, enjoyable part of modern life.
Source: Vino-Joy