---
title: "Analysis of Development Trends in China's Baijiu Industry in 2016"
description: "Since 2012, the baijiu industry has entered an adjustment period. Although some enterprises are still in deep adjustment, most have completed adjustments, and the industry as a whole has begun to rebound from the bottom. This implies that mergers and acquisitions among enterprises will accelerate, increasing industry concentration, which will become a development trend in the coming years. Report data shows that in 2015, the year-on-year decline in the national baijiu wholesale price index narrowed month by month, with a cumulative decline of 2% for the year, narrowing by 1.84 percentage points compared to the same period last year, and the difference between monthly highs and lows was only..."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-03-30"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/4miWUKF84m5hOdSowTQAug"
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---

# Analysis of Development Trends in China's Baijiu Industry in 2016

> Since 2012, the baijiu industry has entered an adjustment period. Although some enterprises are still in deep adjustment, most have completed adjustments, and the industry as a whole has begun to rebound from the bottom. This implies that mergers and acquisitions among enterprises will accelerate, increasing industry concentration, which will become a development trend in the coming years. Report data shows that in 2015, the year-on-year decline in the national baijiu wholesale price index narrowed month by month, with a cumulative decline of 2% for the year, narrowing by 1.84 percentage points compared to the same period last year, and the difference between monthly highs and lows was only...

Since 2012, the baijiu industry has entered an adjustment period. Although some enterprises are still in deep adjustment, most have completed adjustments, and the industry as a whole has begun to rebound from the bottom. This implies that mergers and acquisitions among enterprises will accelerate, increasing industry concentration, which will become a development trend in the coming years.

Report data shows that in 2015, the year-on-year decline in the national baijiu wholesale price index narrowed month by month, with a cumulative decline of 2% for the year, narrowing by 1.84 percentage points compared to the same period last year, and the difference between monthly highs and lows was only 2.86 percentage points. The fixed-base index for the annual baijiu wholesale price differed by only 0.42 percentage points, and the month-on-month difference was 0.75 percentage points, indicating that price stability increased throughout the year and overall fluctuations moderated.

In 2015, leading baijiu enterprises took measures to gradually lead the domestic baijiu market out of the "cold winter," with consumption stabilizing and prices showing a good momentum of recovery. In 2016, the baijiu industry still faces multiple challenges, and low-speed growth will be the norm.

In 2015, facing the "new normal" of China's economic development, after nearly three years of deep adjustment, the Chinese baijiu industry has begun a phase of maintaining stability through "price" and rational development. From the current development status, the problems that constrain the industry's development and drive price declines, such as overall overcapacity, low industry concentration, and market price recognition, have not been fundamentally improved.

The first problem in China's baijiu industry is product surplus. Since 2010, due to omni-channel development and continuous introduction of new products, the product surplus in the baijiu industry has been severe, causing many troubles for distributors, but this problem can be solved through centralized purchasing and mergers. Secondly, overcapacity cannot be ignored; the previously large-scale construction of baijiu industrial parks is now facing closure crises. Finally, because the number of baijiu manufacturers and producers exceeds market demand, the industry has an excess of players. It is expected that in the coming years, a batch of small distilleries and liquor merchants may exit the industry.

The Forward Industry Research Institute's "2016-2021 China Baijiu Industry Market Demand and Investment Strategic Planning Analysis Report" points out that in 2016, facing uncertainties in the international economic environment and downward pressure on China's economic growth, the recovery process of the baijiu industry will be uncertain. Coupled with the many factors constraining industry development, low-speed growth should be the norm. In 2016, the conditions for a comprehensive recovery of the baijiu industry are not yet in place, and the future will present a new normal of weak recovery, low growth, and imbalance. In terms of price trends, the overall national baijiu price is expected to continue stabilizing in 2016, but it is still difficult to support a comprehensive rebound. It is expected that price trends for different positioning of baijiu will diverge.

Among them, the rebalancing of the high-end baijiu price system has been completed in stages, and prices are expected to rise steadily; local liquor prices face pressure from above and support from below, with prices expected to decline slightly; base liquor prices face pressure from capacity reduction and inventory destocking, with prices expected to decline slightly.

For the future development of the baijiu industry, supply-side reforms should be vigorously promoted to effectively resolve excess capacity, transforming volume control and price maintenance into reasonable growth in both volume and price. Currently, oversupply in the baijiu industry is mainly due to rapid capacity expansion. Therefore, by taking advantage of the national supply-side reform, resolving excess capacity in the baijiu industry is the only way to put it on a normal development track.

Market consumption guidance should be strengthened, mature tiered consumer groups should be cultivated, and precise efforts should be made to drive an overall recovery in volume and price. Active exploration of transformation through the "Internet" should be encouraged, promoting online-offline integration for baijiu enterprises to achieve win-win development. Currently, "Internet+" has become a major trend, and the baijiu production industry should keep up with the trend by adjusting R&D, production, and sales accordingly.

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