Source | Blue Shark Consumption Yang Shuo
"This cocktail is beautiful and tastes great, perfect for sharing with friends at a gathering." On December 29, at Hema's Beijing Jiugong Vanke Plaza store, a post-2000s consumer, Zhang Qiqi (pseudonym), was buying drinks with friends for a New Year's trip. In fact, not just Hema, but major supermarkets across Beijing had set up promotional zones before New Year's Day. Among them, new alcoholic beverages that combine drink flavors with a light buzz were placed in prominent positions, attracting many young consumers.
In recent years, the low-alcohol drinks category has rapidly captured the young consumer market, achieving significant growth. According to the "Low-Alcohol Trend Report" jointly released by Tmall Innovation Center (TMIC) and Kantar, China's low-alcohol drinks market has grown from 20 billion yuan in 2020 to over 57 billion yuan in 2024. Globally, the market reached 634.17 billion yuan in 2023 and is expected to exceed 740 billion yuan by 2025. As the market expands, new brands and products continue to flood the low-alcohol drinks track. In this competition for young people's tastes and preferences, which brands will ultimately prevail?
New Players Entering the Fray
As early as the 1970s and 1980s, famous liquor companies attempted to launch baijiu with 30 or even 20 degrees of alcohol, but this did not form a low-alcohol trend. However, at that time, the fruit-flavored beer "Pineapple Beer" from South China stood out, becoming a pioneer in low-alcohol innovation. To this day, pineapple beer remains an important category in China's low-alcohol drinks.
Around 2000, foreign liquor giant Bacardi's "Breezer" and domestic brand "RIO" simultaneously entered the cocktail track. Due to Breezer's multi-level distribution system, chaotic management, severe cross-regional selling, and counterfeit products, its sales plummeted. In contrast, RIO quickly captured supermarket and mall channels nationwide by labeling its cocktails as young and fashionable, achieving rapid growth.
Image source: RIO official website
By 2020, star low-alcohol projects like Meijian, Berry Sweet, and Luoyin emerged, significantly boosting category popularity through social media. JD.com reports show that in 2020, social media discussions about low-alcohol drinks tripled. During the same period, "small bars" as a core channel for low-alcohol drinks gained momentum, with chain bar Helens achieving a compound annual growth rate of 100.3% in store numbers from 2018 to 2021.
By 2025, in addition to independent low-alcohol projects, multiple forces have entered the market. On one hand, traditional liquor companies are making moves. For example, Moutai launched "Youmi" blueberry wine; Wuliangye introduced Xianlin plum wine and Bailu pomegranate wine; Luzhou Laojiao established a fruit wine company, launching brands like "Huajianzhuo" and "Taohuazui." On the other hand, retail and restaurant chains are also launching their own low-alcohol products. For instance, Hema, Haidilao, and Guoquan have introduced related products. Earlier this year, a Hema private-label pear rice wine sold out immediately upon launch, and recently, Qixian's cream cheese rice wine also quickly sold out...
Same Goal, Different Approaches
The low-alcohol players entering the market are targeting the shift in baijiu consumption culture. Today, baijiu consumption has moved from "drinking table culture" to "tipsy self-pleasure."
Previously, drinking table culture was often tied to business banquets and social engagements, with the bold drinking style of "deep feelings, down in one gulp" being mainstream. But today's young people prefer "tipsy culture"—drinking not to get drunk, but to relax and enjoy oneself.
Additionally, consumption scenarios are becoming increasingly diverse: solo drinking at home accounts for 50%, camping and picnics grow 56% annually, and girls' gatherings have become one of the three core consumption scenarios. Young users aged 18-35 are the main force of new alcoholic beverages, contributing 68% of sales, with 62% being female consumers.
It's worth noting that health anxiety is a core driver for many Gen Z consumers choosing low-alcohol drinks. As health shifts from concept to necessity, traditional 53-degree spirits have clearly fallen out of favor among young people, becoming what they see as "the preference of the older generation."
And "the preference of the older generation" is struggling through continuous deep adjustment. According to the National Bureau of Statistics, from January to October this year, China's total baijiu production (converted to 65 degrees, commercial volume) was 2.902 million kiloliters, a year-on-year decrease of 11.5%, possibly marking the ninth consecutive year of production decline.
Recently, listed baijiu companies released what industry insiders call their "worst quarterly reports in a decade." The reports show that in the first three quarters of this year, among 20 listed baijiu companies, the vast majority saw significant performance declines, with some net profit drops exceeding 70%.
In recent years, traditional liquor companies like Moutai and Wuliangye have also been exploring low-alcohol options, such as using new technology to extract ethanol from high-proof spirits to reduce alcohol content. Meanwhile, retail channels like Hema and Qixian have taken a different path, integrating local flavors with low-alcohol drinks, such as Zhejiang rice wine and northern Shaanxi rice wine.
Image source: Wuliangye official flagship store
Behind this lies their goal of attracting young consumers. Cai Xuefei, a baijiu industry analyst, pointed out, "Traditional high-proof baijiu is too strong for young people; lowering the alcohol content is the first step to lowering the barrier to trying it." According to his institution's research, among young people trying baijiu for the first time, over 70% choose low-alcohol products below 40 degrees as their "entry-level wine."
Based on research on young consumer groups, various players have launched their own products. A person in charge of Wuliangye's Technology Innovation Center revealed that they have established a "Young Consumer Group Research Team." Through extensive taste tests, they found that young people prefer "soft entry and sweet aftertaste," which contrasts sharply with the "mellow and intense" characteristics traditionally pursued by baijiu.
New retail channels like Hema, on the other hand, leverage massive data to build strong product selection capabilities. Take their hit product, autumn pear rice wine, as an example: as a rice wine, it contains about 76% original rice wine, 7% pear juice, and 2% apple juice, with zero sucrose and a very clean ingredient list, completely free of food additives.
Behind such hit products is the ability of companies like Hema to collaborate with wineries to launch differentiated products while reducing brand premiums and channel layers, ultimately achieving higher gross margins.
Attracting young people and improving gross margins—both "face" and "substance" are achieved.
Besides RIO, What Else Do Young People Remember? "Little Sweet Water"
Today, in addition to emerging brands like Meijian, Horoyoi, and Berry Sweet, baijiu companies such as Moutai, Wuliangye, Yanghe, and Luzhou Laojiao have also entered the market, along with private-label brands from retail channels like Hema and Qixian. The low-alcohol drinks track is becoming increasingly crowded.
A liquor salesperson pointed out that pre-mixed low-alcohol fruit wines, cocktails, and plum wines essentially target the same consumer group and overlap heavily in consumption scenarios. This means it's hard for any low-alcohol brand to break out first. In fact, besides "cocktail king" RIO, many well-known low-alcohol brands have strong backing. For example, Meijian plum wine, born only six years ago, has become the market share leader in the domestic plum wine category, relying on its parent company, Bottle Planet, which also owns Jiangxiaobai.
But RIO has also had a tough time recently. According to the latest financial report of RIO's parent company, Baorun Co., Ltd., in the first three quarters of 2025, the company's main business revenue was 2.27 billion yuan, down 4.89% year-on-year; net profit attributable to shareholders was 549 million yuan, down 4.35% year-on-year.
"RIO hasn't been selling well in the past two years," revealed a physical liquor store owner, who only carries the Xuancai and Qiangshuang series, not the full product line. As for the reason for declining sales, he bluntly said, "The hype has passed, and brand power has weakened."
Image source: RIO official website
A baijiu analyst also noted that new-generation consumers are experiencing aesthetic fatigue with "little sweet water," leading to lower repurchase rates. RIO has failed to break through in health and scenario innovation. Although it continues to innovate in products, new product promotion is slow, and product lifecycles are shortening.
This seems to suggest that the "little sweet water" business of low-alcohol drinks cannot sufficiently make young people "addicted." This might be an important reason why low-alcohol drinks are constantly breaking through original category boundaries, as innovation is needed to bring freshness to young people.
This may also explain why many low-alcohol brands use OEM (original equipment manufacturer) models. To meet rapidly changing consumer demands, products need to iterate quickly, and professional OEM manufacturers, with their flexible supply chains, can efficiently respond to small-batch, multi-variety orders, helping brands test and innovate.
However, the drawbacks of the OEM model are obvious—multiple brands may share the same factory's R&D solutions, leading to similar tastes and appearances, making brand differentiation difficult. Additionally, brand owners have relatively weak control over the production process, and the factory's quality control directly determines the consistency of the final product, which is not conducive to the long-term healthy development of low-alcohol brands.
For now, as a category, low-alcohol drinks have successfully swept the consumer market, but at the brand level, no equally significant "star player" has emerged. The category's popularity has not fully translated into high brand awareness and strong loyalty. Many new players are still groping for direction in homogeneous competition, and truly leading brands that can penetrate traffic and occupy consumer minds remain scarce.
[Moving Forward to C-end] The 11th China FMCG Conference Date: March 16-18, 2026 Location: Chengdu, China