China’s broader economic deceleration has cast a shadow over the premium baijiu sector, with industry leader Kweichow Moutai reporting moderated sales expansion in the first quarter. A combination of subdued consumer spending and strategic adjustments contributed to the tempered performance. 

The renowned liquor producer recorded a 10.5% year-on-year revenue increase to 50.6 billion yuan ($6.94 billion), a notable drop from the 18.5% growth seen in the same period last year. Net profit climbed 12% to 26.85 billion yuan, down from a 16% rise in early 2024. The figures align with earlier warnings from the company, which revised its annual revenue growth forecast to approximately 9%—a significant decline from its previous 16% projection. 

Efforts to stabilize wholesale pricing and manage inventory levels were cited as key factors behind the slowdown. Meanwhile, Kweichow Moutai is pivoting its sales strategy to prioritize direct-to-consumer channels and e-commerce platforms. Direct sales accounted for 23.22 billion yuan of total revenue, while wholesale distribution generated 27.36 billion yuan. This shift aims to bolster margins by reducing reliance on traditional intermediaries. 

The challenges extend beyond Kweichow Moutai. Competitors like Wuliangye Yibin and Luzhou Laojiao also faced headwinds, with revenue growth slowing to 6% and 1.8%, respectively, reflecting broader pressures in the high-end spirits market. 

Despite a 12% share price decline in 2024, Kweichow Moutai’s stock has edged up 1.3% year-to-date on the Shanghai exchange, signaling cautious optimism amid ongoing economic uncertainties.