---
title: "The 'FMCG' Mindset of Baijiu"
description: "Initially, baijiu and FMCG were distinct, but later, as some FMCG companies entered the baijiu industry, the two became intertwined. Now, due to the industry's 'people's liquor route' and channel下沉, baijiu seems increasingly like a new FMCG. The article discusses whether baijiu is an FMCG and how adopting FMCG thinking can help baijiu companies succeed."
author: "New Distribution"
publisher: "New Distribution"
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published: "2014-08-03"
language: "en"
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---

# The 'FMCG' Mindset of Baijiu

> Initially, baijiu and FMCG were distinct, but later, as some FMCG companies entered the baijiu industry, the two became intertwined. Now, due to the industry's 'people's liquor route' and channel下沉, baijiu seems increasingly like a new FMCG. The article discusses whether baijiu is an FMCG and how adopting FMCG thinking can help baijiu companies succeed.

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Initially, baijiu and FMCG were clearly distinct, but later, because some FMCG companies entered the baijiu industry, the two became intricately linked. Now, due to the industry's collective pursuit of the "people's liquor route" and the flourishing channel下沉, baijiu seems increasingly to be becoming "a new kind of FMCG."

**FMCG Attributes**
Whether baijiu is truly an FMCG has always been a point of contention in the industry.

Some argue that baijiu's casual consumption and the ubiquity of tobacco and liquor stores and supermarkets as purchase points clearly indicate it is an FMCG. However, baijiu's special product characteristics, such as shelf life and price, also set it apart from typical FMCG products.

Others believe that baijiu was not previously seen as an FMCG mainly because the abnormal prosperity brought by "three public consumptions" masked its essential nature. In the past, the liquor channel overly relied on group buying, which also alienated the essence of liquor. "FMCG should all belong to large-circulation products, but the sales of high-end liquor mainly rely on the group buying channel."

"Baijiu has both FMCG characteristics and partially luxury characteristics; it has both material and spiritual attributes," said Shu Guohua. From this perspective, given consumers' price sensitivity to FMCG, low- and mid-end baijiu can learn from FMCG operational approaches, while consumers of mid- to high-end products are more driven by social needs and are price-insensitive, making them unsuitable for FMCG-style operations.

In fact, in the reporter's view, discussing whether baijiu is an FMCG is of no practical significance. The key issue is whether baijiu can be sold using an "FMCG mindset." Even if baijiu is not an FMCG, if learning from FMCG sales models can promote product sales and optimize distributor inventory under the current difficulties, it is certainly worth trying for the liquor industry!

Qi Junwen, a senior liquor marketing consultant, believes that the news of Wahaha Group attempting to enter the liquor industry attracted attention because of the expectation of whether it can bring its unique FMCG operational model of channel下沉 and deep distribution into the liquor industry.

Although Wahaha's "Lingjiang Guojiu" has not yet formed a good market atmosphere, Jing Liquor, which has been following a "quasi-FMCG" model, should bring some inspiration and reflection to the entire baijiu industry. An important reason behind Jing Liquor's steady growth is its "FMCG-ization" model. This model is characterized by setting a short distribution and delivery cycle to sell products in an "FMCG" manner.

Beer marketing expert Fang Gang said in an interview with reporters that future liquor sales competition will no longer be about the sophistication of tactics, but about basic concepts and foundational skills.

"It's not that the FMCG model is necessarily better than the current liquor sales model, but rather that liquor companies should learn from FMCG companies' flat marketing operations and truly achieve market refinement," Fang Gang said.

**Who Is Using the "FMCG Mindset"**
The most successful company using the "FMCG mindset to sell liquor" should be Jing Liquor.

In 2013, despite the industry downturn, Jing Liquor maintained an 18% sales growth rate, with annual sales exceeding 6 billion yuan.

Similar to FMCG, Jing Liquor's main sales channels are restaurants and supermarkets.

To effectively manage a nationwide channel network spanning urban and rural areas, Jing Liquor established a three-tier marketing management model consisting of provincial marketing managers, prefecture-level marketing managers, and county-level sales representatives, along with a harmonious and win-win cooperation model with distributors. They built a marketing team of up to 8,000 people to help distributors with market development and channel management.

For example, Jing Liquor's "Summer Shelf Placement" campaign starting in July 2013 simultaneously launched marketing activities in twelve key cities nationwide, including Guangzhou, Hangzhou, Changsha, and Wenzhou. Sales personnel from the headquarters, along with local sales representatives and distributor sales staff, visited customers and stocked shelves in batches and by region, primarily targeting local restaurants.

This large-scale human wave tactic, combined with face-to-face terminal intimate service, leaves almost no gap between Jing Liquor and consumers.

"Jing Liquor has always positioned itself as an FMCG in the liquor industry, so in market promotion and channel construction, we have consciously referenced many excellent domestic and international FMCG models," said Wang Nanbo, Vice President of Jing Brand Company. He believes that in dealing with distributors, Jing Liquor has many practices different from traditional baijiu companies.

Thanks to this FMCG mindset, Jing Liquor's distributors often achieve inventory turnover within seven days. Terminal salespeople are required to visit at least 35 outlets daily, collecting accurate sales volume and product display information, and uploading it to the company's data information system via mobile phones and computers.

Another practical example is Anhui's Xuan Liquor, whose "brutal growth" also bears the shadow of FMCG operational models. This regional brand from southern Anhui quickly captured the Hefei market, the provincial capital, within just a few years and gradually became one of the strong Hui liquor brands.

Today, Xuan Liquor, with its many drinkers, deep participation, and lasting influence, has become an important force driving the transformation of Anhui's liquor industry. Their actions—"inspired by the brand, led by small cellars, starting from Xuancheng, relying on cultural accumulation, and advancing region by region"—have demonstrated strong internal drive and growth potential.

On Haiheng Street in the bustling avenue of Hefei Economic Development Zone, there are 16 supermarkets, including Haotian Supermarket, Wanbao Wholesale Department, Dingfa Supermarket, and Fengjie Supermarket, all prominently featuring Xuan Liquor. There are many such streets in Hefei. "Xuan Liquor's door signs, shelf displays, floor stacks, and various product displays and brand expansion methods are all very detailed and strong, coupled with the thoughtful and meticulous service of sales staff, so Xuan Liquor naturally receives everyone's welcome," said a supermarket owner.

In a small local restaurant in Luyang District, Hefei, Xuan Liquor's image displays are everywhere: table nameplates, ashtrays, wall posters, and product displays inside the counter.

According to reporters, Xuan Liquor requires cooperative restaurants to have no fewer than four forms of image communication, aiming to create an atmosphere of "everyone is drinking Xuan Liquor."

The restaurant owner also told reporters that Xuan Liquor's operational model feels no different from beverage or mineral water manufacturers. Salespeople visit almost daily, and daily sales are recorded. "Xuan Liquor is a liquor for ordinary people, with a large consumer market. It's just like FMCG—small profits but quick turnover—yet it can capture a considerable market share."

According to Tao Xiaoqing, Brand Director of Xuan Liquor Group, in recent years, Xuan Liquor has been striving to build a consumer experience system from the production area to the production line to the sales terminal. Allowing consumers to get close to Xuan Liquor's production and understand the small cellar brewing process deepens their understanding of Xuan Liquor's quality and enhances its brand power. "We have always kept our eyes on consumers, carefully honing our products and sincerely communicating with consumers; we have always gone deep into the market, understanding the market and channels, helping distributors, and working with distributors to do well in the market and service, winning recognition from more and more consumers."

**Change Minds, Change Approaches**
A distributor in Shandong who deals with famous liquor brands like Moutai and Wuliangye once complained to reporters that although many companies had been shouting about channel下沉 and terminal front-loading, implementation often went astray.

"To be blunt, before 2013, I could count on one hand the number of times I met the manufacturer's regional manager each year, and each meeting was basically about payment collection. At the end of 2013, when my inventory pressure was greatest, the manufacturer's salespeople couldn't even come up with an effective market activation plan," the distributor said.

Tan Changchun, General Manager of Huaxia Jijian Changchunzi Consulting Center, who has worked in the FMCG industry for nearly 20 years, believes that the baijiu industry's cultural and social demands have some unstable foundations or even hype. "When so-called social demands and self-proclaimed cultural demands fail to gain consumer recognition or when consumers switch, baijiu companies need to learn from well-known FMCG companies' methods to manage target consumers' cultural and social needs."

In Tan Changchun's view, marketing operations closest to the market and consumers are certainly worth learning from and referencing.

"In fact, the history of marketing operations development across industries in China is a history of continuously learning and borrowing from FMCG experiences, tools, and methods. Some are systematic applications, while others may be borrowing specific points. As long as you want to sell your products faster, more, and with less time, effort, and cost, you should learn more about FMCG. That is the essence of learning FMCG marketing operations," Tan Changchun said.

It must be admitted that the liquor industry mostly still uses the old model—customer agency wholesale—while deep distribution and deep co-marketing models are less applied, yet these are precisely the most effective channel models for market activation.

Some industry experts believe that the current situation in the baijiu industry is that first-tier famous liquors have relied mainly on "three public consumptions" and large distributors in regional markets. In contrast, some regional enterprises, based on their emphasis on base markets, often implement deep distribution. Therefore, during the adjustment period, it may be these regional liquor companies that focus on the mid-end liquor market and cultivate a specific region meticulously that will emerge from difficulties first.

Currently, the "people's liquor route" promoted by many famous liquor companies does not conflict with the FMCG model; both require companies to change existing sales channels and market habits, and to rebuild marketing systems and teams to form new market competitiveness. This is by no means a problem that can be solved by a slogan or empty words.

Companies cannot fight hard battles with old ideas and methods. The so-called "FMCG mindset" is merely a new response to the changes in the mass liquor market and consumers. It requires companies and distributors to understand that moving volume can still have good market space and profits, and that competition among baijiu products is a street fight—close combat and turf battles.

Source: "Huaxia Wine News"

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