China’s Baijiu Market in 2025: Strategic Shifts and Advertising Redefined

China’s baijiu industry in 2025 stands at a pivotal moment. The sector is transitioning from rapid expansion to refined consolidation, facing a complex mix of policy tightening, consumption fatigue, and intensifying competition. While top-tier players have weathered the storm with relative stability, the broader ecosystem, particularly regional and mid-market brands, is being forced to rethink its playbook. This article draws on insights from KPMG and Daxiaofei Shichang Diaocha (大消费市场调研, a WeChat-based research publication) to examine key developments and advertising trends shaping the market.

Macroeconomic and Policy Environment: A Market in Transition

In May 2025, revised government guidelines extended alcohol restrictions from high-end liquors to all alcoholic beverages across official functions. Although this was less disruptive than the “Eight Provisions” of 2012, it marked a structural shift in the role of baijiu in state-affiliated consumption. The market’s reaction was immediate, with stocks dipping 2 to 3% before stabilising, highlighting growing maturity within the sector.

Meanwhile, restaurant retail growth remained weak, at just 3% year-on-year, and inventory turnover for listed firms continued to exceed 900 days. These figures underscore the mounting strain on traditional sales channels. Gifting, banquets, and business entertaining, once the pillars of premium baijiu consumption, are losing ground. A shift in consumption dynamics is underway, and agility is now a key competitive advantage.

Supply and Demand: Margin Squeeze and Brand Divergence

Baijiu production has continued to decline, with output down 7.2% year-on-year in the first quarter of 2025. Despite this, listed companies achieved modest growth, with a 1.7% rise in revenue and 2.3% in net profit. This indicates that larger brands are leveraging scale and channel control effectively.

However, cost pressures remain a concern. Nearly 60% of surveyed producers reported reduced profit margins, driven by increased promotional costs and weakening unit prices. In addition, 57.9% experienced lower per-customer spend, and over half reported declining transaction volumes.

Consumers, constrained by broader economic uncertainty, are becoming more value-conscious. Price sensitivity has increased, and mid-tier segments, especially in the 500 to 800 yuan range, are underperforming in both volume and perceived value. Regional brands are responding by leaning into localisation and digital agility.

Digital Commerce: The Rise of the E-Baijiu Era

E-commerce continues to offer a rare area of optimism. Nearly 43% of baijiu producers reported an increase in the proportion of online sales compared to the previous year. Although average unit prices declined due to platform promotions and discounts, overall online volume rose sharply, exceeding 60 million bottles and 30 billion yuan in sales during the first five months of 2025.

Regional and pan-national brands, in particular, recorded strong gains. These results suggest that digital-first strategies executed through platforms such as JD.com, Tmall, and Douyin are yielding real impact. However, the dominance of these platforms brings its own challenges, including margin pressure and increased price transparency. As a result, brands are now weighing short-term sales volume against the long-term benefits of building direct-to-consumer ecosystems.

Consumption Scenarios: Fragmentation and Rationalisation

Traditional peaks in consumption, such as Chinese New Year and Labour Day, fell short of expectations. Only 11.5% of retailers reported an increase in baijiu consumption during the May Day holiday. Over 80% observed a decline in business gifting, and casual scenarios such as friend gatherings and daily drinking also saw year-on-year declines.

Wedding celebrations remain the most stable consumption setting. However, new casual occasions are gaining traction. These include camping, post-work socialising, and informal gatherings. Such changes are influencing not just taste profiles but also product design, with a rise in demand for smaller formats, lighter bottles, and younger-facing packaging.

Branding and Advertising: Rebuilding Value Through Media Precision

Baijiu brands have responded to market shifts by adjusting their advertising strategies. Data from 2023 to 2024 highlights a significant redistribution of media investment across traditional and digital formats.

CCTV Advertising Regains Importance

The number of baijiu advertisers on CCTV increased from 97 to 119, indicating renewed confidence in its national authority and brand credibility. By contrast, the number of advertisers on the five major satellite TV channels fell from 61 to 51, and other satellite channels declined from 123 to 112.

Despite this drop in advertiser count, satellite channels saw an increase in ad duration share. Other satellite TV channels, in particular, grew their time share from 27.93% to 34.94%, while CCTV maintained the majority at 60.51%. This shift suggests that advertisers are consolidating their budgets for more focused impact.

Variety Shows Lose Momentum

Sponsorship in variety entertainment shows appears to be plateauing. Advertiser count for televised variety programmes dropped slightly from 43 to 41, and the number of supported shows decreased from 111 to 98. Online variety formats experienced a similar trend. While still relevant, this channel no longer guarantees strong returns, likely due to rising production costs and diminishing marginal visibility.

Web Dramas Offer Targeted Engagement

Online drama has become one of the most strategically important advertising channels. These platforms offer rich storytelling environments that allow brands to embed themselves in content consumed by younger, digital-savvy viewers.

• iQIYI led in advertiser count in 2023 with 17 baijiu brands, though this figure fell to 12 in 2024.

• Youku topped drama sponsorships in 2023 with 65 titles, though that number dropped significantly to 20 in 2024.

• Tencent Video saw a rise in advertiser count, from 7 to 10, suggesting increasing favourability among major brands.

Conclusion: Rewriting the Baijiu Playbook

The 2025 baijiu market is no longer shaped by gifting rituals or banquet culture. Today’s consumers expect cultural resonance, emotional storytelling, and digital-first engagement. In this new landscape, effective advertising demands precision, not just presence.

For alcohol brands aiming to lead the next decade, now is the time to rethink strategy and invest in smart, localised media planning. Start the conversation today!