---
title: "How Can the Baijiu Industry Break Through in 2016 Amid Slowing Economic Growth, Weak Consumption, and Restrictions on Official Spending?"
description: "The baijiu industry, once enjoying a golden decade, is now in deep adjustment amid slowing economic growth, weak consumption, and anti-corruption policies. To break through, companies must adapt to the new normal by adjusting prices, clearing inventory, learning from FMCG practices, persisting in strategy, targeting new consumer groups, focusing on consumer experience, innovating products, and using the internet wisely."
author: "朱朝阳"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2015-12-13"
language: "en"
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# How Can the Baijiu Industry Break Through in 2016 Amid Slowing Economic Growth, Weak Consumption, and Restrictions on Official Spending?

> The baijiu industry, once enjoying a golden decade, is now in deep adjustment amid slowing economic growth, weak consumption, and anti-corruption policies. To break through, companies must adapt to the new normal by adjusting prices, clearing inventory, learning from FMCG practices, persisting in strategy, targeting new consumer groups, focusing on consumer experience, innovating products, and using the internet wisely.

The saying "when it rains, it pours" aptly describes the current state of the baijiu industry. After a golden decade, the industry has entered a period of deep adjustment, compounded by slowing economic growth, weak consumption, and intensified anti-corruption efforts, including restrictions on official spending. Under this new normal, how can the industry break through? How can companies find a truly suitable path for their own development and go with the flow?

1. **Product prices are moving downward.** Income determines consumption. In a poor economy, people earn less and find it harder to make money, making them more sensitive to price than to value. Some may object, noting that during Double 11, people's frenzy for foreign products has not diminished. However, baijiu prices had a bubble, and the current downward adjustment is a return to rationality; the era of excessive profits is over.

2. **Inventory destocking remains an ongoing theme and has not yet bottomed out.** There are three types of inventory to consider:
   - **Distributor and developer inventory:** Previously, the market strategy was to attract large distributors and continuously develop new products, focusing on "giving birth" but not "raising" them. This was typical inventory transfer. High profits and no expiration date attracted many, but while some made a fortune, many, especially outsiders, are now stuck with large stocks.
   - **Terminal inventory:** Distributors also transferred factory inventory to terminals, especially in township markets, where even medium-sized circulation and catering outlets have hundreds of cases from previous years, often due to policy incentives or being misled during the golden period.
   - **Consumer inventory:** This is the hardest to solve. Before anti-corruption intensified, corruption, commercial bribery, and political resource exchanges led many core consumers to stockpile large amounts of baijiu at home.

3. **FMCG tactics can be borrowed but not copied outright.** Baijiu marketing shares similarities with beer, beverages, and other FMCG products, but there are significant differences, except for low-end bottled liquor. Baijiu requires personnel with strong social skills, resources, and experience, due to its consumption attributes. Baijiu consumption is more fragmented, scenario-based, and community-driven. Cultivating and controlling opinion leaders and core consumers is crucial for quickly igniting a regional market. FMCG emphasizes "channel is king, terminal wins," and its refined management of personnel and markets is worth learning from.

4. **Survival of the fittest; persistence is key.** The boss's strategic persistence is more important than tactical marketing moves. Companies that haven't operated in the market are now at a critical juncture, forced to grasp at the last straw. However, market development is slow and meticulous; many SMEs start with a bang but end with a whimper, and if they don't see immediate results, they revert to old ways. In the new competitive environment, most companies are struggling and losing money. The industry is entering a period of rapid consolidation, as seen in beer and home appliances. Whether a company can persist depends on the boss's strategic positioning and financial strength.

5. **There is a gap in the new mainstream consumer group.** Previously, the post-60s and post-70s were the core baijiu consumers, but they are aging and consuming less. The new mainstream consumers, post-80s and post-90s, prefer beer, wine, premixed drinks, and fruit wine. There is a possibility of age regression, where they might regain interest in baijiu at a certain age. The entire industry needs to work together to communicate the drinking needs of post-80s and post-90s through advertising, marketing, and scenario consumption. A typical failure is Li Ning, which failed to align with the new generation.

6. **Marketing models centered on consumer experience and product experience become dominant.** The functions of sales terminals and consumption terminals are weakening due to diversified and fragmented shopping channels, such as professional liquor platforms, online, and communities, as well as corporate customization and crowdfunding. Terminals must rely on manufacturer resources to deeply engage core consumers and provide product experiences and interactions; otherwise, they will lose customers. Factory tours, tastings, baijiu knowledge sessions, resource platform building, and WeChat groups for core consumers can increase stickiness and fan effects, turning consumers into buyers, users, and promoters.

   "He who wins consumers wins the world." By working backward from the market, we can fundamentally solve the terminal's biggest problem: slow sales and sluggish movement. "When it flows, there is no pain." Shift channel promotions to consumer cultivation and pull. Terminals care more about product turnover than profit. Consumer cultivation is a long and difficult process, but once achieved, product loyalty and reputation will greatly improve, and the brand's dominance in the region will be more solid.

7. **Essential product innovation and baijiu science popularization.** Product innovation must be revolutionary in essence, not just conceptual. Conceptual innovation is fleeting. Good products speak for themselves, especially those that can be directly experienced through the senses. Truly collect consumer feedback, study their tastes, repeatedly adjust and conduct destructive tests, segment markets, and refine selling points, rather than just paying lip service.

   Popularize baijiu knowledge so consumers truly understand the brewing process, how to identify pure grain liquor, and how to drink healthily. Let consumers understand the inside story of brewing. Hanker Commune is an example.

8. **Don't be obsessed with the internet; for baijiu, it's just a legend.** In actual transactions, from a consumer psychology perspective, the first obstacle to buying baijiu is whether the quality is genuine. Companies that can't solve product experience and brand awareness shouldn't play the games of famous brands. Internet platforms are now just price cutters in a sluggish economy. Use new media for promotion, as Lincoln said: "No matter how long your legs are, they must touch the ground." Lu Xun once said: "There is no road in the world; when many people walk, it becomes a road." Each company's internal and external environment is different, and there is no panacea. Under correct and rational thinking, combined with the company's actual situation, continuously trial and error to find the most suitable path is the best path.

**Statement: This article has been authorized for original publication by the author. For reprinting, please contact the author.**
**-END-**

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